SKYLINE CORP
10-Q, 1996-01-12
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                       SECURITIES AND EXCHANGE COMMISSION

                          WASHINGTON,  D.C.      20549

                                   FORM 10-Q

                  Quarterly Report Under Section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

                    For the Quarter Ended November 30, 1995

                           Commission File No. 1-4714




                              SKYLINE CORPORATION
                                                                      
             (Exact name of registrant as specified in its charter)


           INDIANA                             35-1038277     
                                                                      
  (State of Incorporation)          (IRS Employer Identification No.)  


      P. O. Box 743,     2520 By-Pass Road    Elkhart, IN    46515    
                                                                       
           (Address of principal executive offices)          (Zip)    




                      294-6521                   (219)
                                                         
             (Registrant's telephone number)   (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     


     Securities registered pursuant to Section 12 (b) of the Act:
                                          
                                          Shares Outstanding

                Title of Class             January 12, 1996  
                 Common stock                 10,644,344
                 
                 

<PAGE>
                              SKYLINE CORPORATION

                           Form 10-Q Quarterly Report

                                     INDEX

                                                              Page No.

Part I.    Financial Information


           Item 1.  Financial Statements:
                    Consolidated Balance Sheets as
                       of November 30, 1995 and May 31, 1995      2 - 3

                    Consolidated Statements of Earnings and       4
                       Retained Earnings for the three and
                       six-month periods ended November 30,
                       1995 and 1994

                    Consolidated Statements of Cash               5
                       Flows for the six-month periods
                       ended November 30, 1995 and 1994

                    Notes to the Consolidated Financial           6 
                       Statements

                    Report of Independent Accountants             7

          Item 2.   Management's Discussion and Analysis        8 - 9 
                       of Financial Condition and Results 
                       of Operations


Part II.  Other Information

          Item 1.   Legal Proceedings                            10

          Item 6.   Exhibits and Reports on Form 8-K             10

          Signatures                                             10


<PAGE>
Skyline Corporation and Subsidiary Companies
Consolidated Balance Sheets


(Dollars in thousands)
                                        November 30, 1995    May 31, 1995 
                                           (Unaudited)
ASSETS

Current Assets:

Cash and temporary cash investments            $   6,495       $  10,754

Treasury Bills, at cost plus accrued 
interest, which approximates market               52,208          29,157

Accounts receivable, trade, less allowance
for doubtful accounts of $40                      41,161          45,374

Inventories                                                      
  Raw materials                                    6,161           6,751  
  Work in process                                  4,748           4,468
  Finished goods                                     650           3,586
                                                                          
Total Inventories                                 11,559          14,805
                                                                        
Other current assets                               8,748           7,246
                                                                        
TOTAL CURRENT ASSETS                             120,171         107,336
                                                                        
Investment in U.S. Treasury Notes                 59,912          59,917  
                                                                          
Property, Plant and Equipment, at Cost:
  Land                                             5,220           5,278
  Buildings and improvements                      57,546          57,502 
  Machinery and equipment                         22,267          24,391  

                                                  85,033          87,171

Less accumulated depreciation                     40,451          41,915  
                                                                        
  Total Property, Plant and Equipment             44,582          45,256 
                                                                          
Other Assets                                       2,967           2,955
                                                                        
                                               $ 227,632       $ 215,464 
                                                                          
           
The accompanying notes are a part of the consolidated financial 
statements.


<PAGE>
Skyline Corporation and Subsidiary Companies
Consolidated Balance Sheets


(Dollars in thousands except per share data)

LIABILITIES AND SHAREHOLDERS' EQUITY

                                        November 30, 1995    May 31, 1995 
                                           (Unaudited)
Current Liabilities:
 
Accounts payable, trade                    $    13,268        $    9,962

Accrued salaries and wages                       5,816             5,662 

Accrued profit sharing                           1,297             2,408 

Accrued marketing programs                      16,594             8,192 

Other accrued liabilities                        8,524             6,142

Income taxes                                       309               880
                                                                        
   TOTAL CURRENT LIABILITIES                    45,808            33,246  
                                                                        
Other Deferred Liabilities                       2,555             2,486
Commitments and Contingencies                        -                - 

Shareholders' Equity:
 Common stock, $.0277 par value, 15,000,000
 shares authorized; issued 11,217,144 shares       312               312  
 Additional paid-in capital                      4,928             4,928
 Retained earnings                             183,931           176,187
                                              
 Treasury stock, at cost, 572,800 shares
  at November 30, 1995 and 96,500 shares
  at May 31, 1995                               (9,902)           (1,695)

TOTAL SHAREHOLDERS' EQUITY                     179,269           179,732 
                                                                          
                                           $   227,632        $  215,464
                                                      
                                                                          
The accompanying notes are a part of the consolidated financial
statements.

<PAGE>
Skyline Corporation and Subsidiary Companies
Consolidated Statements of Earnings and Retained Earnings
For the three and six-month periods ended November 30, 1995 and 1994
(Unaudited)

(Dollars in thousands except per share data)


                            Three-months Ended      Six-months Ended
                               November 30,           November 30,       
                             1995       1994        1995       1994

Sales                      $ 172,469  $ 164,475    $ 336,324  $ 319,803

Cost of sales                141,853    138,798      276,699    269,664    
                                                                       
Gross profit                  30,616     25,677       59,625     50,139

Selling and administrative
 expenses                     22,612     20,453       45,409     39,687
                                                                       
Operating earnings             8,004      5,224       14,216     10,452

Interest income                1,576      1,523        3,126      3,011
                                                                       
Earnings before income taxes   9,580      6,747       17,342     13,463
                                                                       
Provision for income taxes:

      Federal                  3,135      2,190        5,685      4,370
      State                      719        510        1,299      1,020
                                                                       
                               3,854      2,700        6,984      5,390
                                                                       
Net earnings                   5,726      4,047       10,358      8,073

Retained earnings,
 beginning of period         179,485    168,883      176,187    166,196
                                                                       
                             185,211    172,930      186,545    174,269

Less, cash dividends paid      1,280      1,339        2,614      2,678
                                                                       
Retained earnings,
 end of period             $ 183,931  $ 171,591    $ 183,931  $ 171,591
                                                                          
Net earnings per share         $ .54      $ .36        $ .96      $ .72    
                                                                       
Cash dividends per share       $ .12      $ .12        $ .24      $ .24
                                                                       
Weighted average common
 shares outstanding       10,655,689 11,157,244   10,828,196 11,157,244    

                                                                           
The accompanying notes are a part of the consolidated financial 
statements.


<PAGE>
Skyline Corporation and Subsidiary Companies
Consolidated Statements of Cash Flows
For the six-month periods ended November 30, 1995 and 1994
Increase (Decrease) in Cash
(Unaudited)

(Dollars in thousands)

                                                     1995          1994
                                                                       
Cash Flows From Operating Activities:
  Net earnings                                  $  10,358     $   8,073 
                                                                       
  Adjustments to reconcile net earnings to
  net cash provided by operating activities:
    Interest income earned on U.S. Treasury 
     Bills and Notes                               (3,006)       (2,867)
    Depreciation                                    1,636         1,569
    Amortization of discount or premium on 
     U.S. Treasury Notes                                5            (5)
    Working capital items:
      Accounts receivable                           4,213         4,233 
      Inventories                                   3,246        (7,910)
      Other current assets                         (1,502)       (1,328)
      Accounts payable, trade                       3,306           (31)   
      Accrued liabilities                           9,827         5,935 
      Income taxes payable                           (571)       (1,923)   
    Other assets                                      (12)          (13) 
    Other deferred liabilities                         69            87
                                                                       
    Total adjustments                              17,211        (2,253)
                                                                       
    Net cash provided by operating activities      27,569         5,820 
                                                                       
Cash Flows From Investing Activities:
  Proceeds from sale or maturity of 
   U.S. Treasury Bills                             84,492        18,879
  Purchase of U.S. Treasury Bills                (106,336)      (18,556)
  Interest received from U.S. Treasury Notes        1,799         2,604
  Proceeds from sale of property, plant
   and equipment                                      555            38
  Purchase of property, plant and equipment        (1,517)       (9,067)
                                                                       
    Net cash used in investing activities         (21,007)       (6,102)   
                                                                       
Cash Flows From Financing Activities:
  Cash dividends paid                              (2,614)       (2,678)
  Purchase of treasury stock                       (8,207)            -    
                                                                       
Net cash used in financing activities             (10,821)       (2,678)
                                                                       
Net decrease in cash                               (4,259)       (2,960)
Cash at beginning of year                          10,754         9,232
                                                                       
Cash at end of quarter                          $   6,495     $   6,272
                                                                           
                                                                           
The accompanying notes are a part of the consolidated financial 
statements.


<PAGE>
Skyline Corporation and Subsidiary Companies
Notes to the Consolidated Financial Statements 
For the three and six-month periods ended November 30, 1995 and 1994
                                                                      
The accompanying unaudited interim consolidated financial statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the consolidated financial position as of
November 30, 1995 and the consolidated results of operations and changes
in cash for the three and six-month periods ended November 30, 1995 and
1994.

The unaudited interim consolidated financial statements included herein
have been prepared pursuant to the rules and regulations for reporting on
Form 10-Q.  Accordingly, certain information and footnote disclosures
normally accompanying the annual consolidated financial statements have
been omitted.  The interim consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes
thereto included in the Corporation's latest annual report on Form 10-K.

The financial data included herein has been subjected to a limited review
by Price Waterhouse LLP, the registrant's independent accountants, whose
report is included on page 7 of this filing.

Inventories are stated at cost, determined under the first-in, first-out
method, which is not in excess of market.  Physical inventory counts are
taken at the end of each reporting quarter.  

The Corporation and its subsidiaries were contingently liable at 
November 30, 1995 under agreements to purchase repossessed units on floor
plan financing made by financial institutions to its customers.  Losses,
if any, would be the difference between repossession cost and the resale
value of the units.  There have been no material losses in past years
under these agreements, and none are anticipated in the future.

The Corporation is a party to various pending legal proceedings in the
normal course of business.  Management believes that any losses resulting
from such proceedings would not have a material adverse effect on the
Corporation's results of operations or financial position.<PAGE>

                                                                           
                        Report of Independent Accountants


December 15, 1995

To The Board of Directors and
Shareholders of Skyline Corporation

We have reviewed the accompanying consolidated balance sheet as of
November 30, 1995 and the related consolidated statements of earnings 
and retained earnings for the three-month and six-month periods ended 
November 30, 1995 and 1994 and the consolidated statements of cash flows
for the   six-month periods ended November 30, 1995 and 1994 of Skyline
Corporation and Subsidiary Companies.  This financial information is the
responsibility of the company's management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants.  A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquires of persons responsible
for financial and accounting matters.  It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.  Accordingly, we do
not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial information for it to be in
conformity with generally accepted accounting principles.


PRICE WATERHOUSE LLP
Chicago, Illinois                                                          
  
     
<PAGE>
Skyline Corporation and Subsidiary Companies
Management's Discussion and Analysis of Financial Condition and Results 
of Operations
                                                                       
 
Liquidity and Capital Resources

At November 30, 1995 cash and investments in U.S. Treasury Bills totaled
$58,703,000, an increase of $18,792,000 from $39,911,000 at May 31, 1995.
Current assets exclusive of cash and investments in U.S. Treasury Bills
totaled $61,468,000 at November 30, 1995, a decrease of $5,957,000 from
the balance at May 31, 1995 of $67,425,000. Reductions in trade accounts
receivable ($4,213,000) and finished goods inventories ($2,936,000)
contributed to this decrease.   Current liabilities increased $12,562,000
from May 31, 1995 to $45,808,000 at November 30, 1995.  This increase in
current liabilities can mainly be attributed to increased trade accounts
payable due to increased production ($3,306,000) and increased marketing
program accruals ($8,402,000).  Working capital at November 30, 1995
amounted to $74,363,000 compared to $74,090,000 at May 31, 1995.  Capital
expenditures totaled $1,517,000 in 1995 compared to $9,067,000 in the
first half of the prior year.  Capital expenditures during the current
fiscal year were made primarily to increase manufacturing capacity, adopt
new manufacturing processes and increase manufacturing efficiencies.  Cash
was also used to purchase $8,207,000 of Company stock in fiscal 1996.  The
cash provided by operating activities in fiscal 1996 is expected to be
adequate to fund any capital expenditures and treasury stock purchases
which may be deemed necessary during the year.  Historically, the
Corporation's financing needs have been met through funds generated
internally.

Results of Operations for the Quarter and Six-months Ended November 30,
1995

Sales in the quarter ended November 30, 1995 amounted to $172,469,000, a  
4.9 percent increase from $164,475,000 in the comparable quarter of the
prior year.  Manufactured housing sales increased 13.6 percent to 
$150,079,000 in 1995 compared to $132,113,000 in 1994.  Manufactured
housing unit sales increased to 5,657 compared to 5,323 in 1994. 
Recreational vehicle sales decreased 30.8 percent to $22,390,000 in the
second quarter of fiscal 1996 compared to $32,362,000 in fiscal 1995. 
Recreational vehicle unit sales decreased to 1,776 compared to 2,544 in
fiscal 1995.<PAGE>

Sales during the first half of fiscal 1996 amounted to $336,324,000 
a 5.2 percent increase from $319,803,000 in the comparable period of the
prior year.  Manufactured housing sales increased 14.1 percent to 
$291,377,000 in 1995 compared to $255,408,000 in 1994.  Manufactured
housing unit sales increased to 11,027 compared to 10,398 in 1994.
Recreational vehicle sales decreased 30.2 percent to $44,947,000 in the
first half of fiscal 1996 compared to $64,395,000 in fiscal 1995. 
Recreational vehicle unit sales decreased to 3,637 compared to 5,307 in
1994.  Sales for the second quarter and the first half of fiscal 1996
reflect continuing strong demand for manufactured housing in most sections
of the country and an overall industry slowdown in the RV marketplace.

Cost of sales in the second quarter decreased to 82.2 percent of sales
compared with 84.4 percent in 1994, while the cost of sales for the first
half of the year was very comparable to the quarter (82.3 percent in
fiscal 1996 vs 84.3 percent in fiscal 1995).  The decrease in costs is due
to efficiencies gained by increased sales volume, higher product selling
prices in the manufactured housing segment, and continued cost containment
efforts.

Selling and administrative expenses for the second quarter of fiscal 1996
increased as a percentage of sales to 13.1 percent from 12.4 percent last
year.  Selling and administrative expenses for the first half of the
fiscal year also increased as a percentage of sales to 13.5 percent from
12.4 percent. Both increases were due primarily to the costs of increased
marketing efforts.

Interest income amounted to $1,576,000 in the second quarter of fiscal
1996 compared to $1,523,000 one year earlier.  Interest income is directly
related to the amount available for investment and the prevailing yields
of U.S. Government securities.  The increase in interest income was due to
slightly higher investment levels and yields during the period.


Income Taxes

The provision for federal income tax approximates the statutory rate and
for state income taxes reflects current state rates effective for the
period based upon activities within the taxable entities.<PAGE>
  


                                 PART II     



Item 1.  Legal Proceedings
Information with respect to this Item for the period covered by this Form
10-Q has been previously reported in Item 3, entitled "Legal Proceedings"
of the Form 10-K for the fiscal year ended May 31, 1995, heretofore filed
by the registrant with the Commission.

Item 6.  Exhibits and Reports on Form 8-K
No reports on Form 8K were filed during the second quarter of fiscal 1996.

The Exhibit filed as part of this report is listed below.

    Exhibit No.     Description            
       27           Financial Data Schedule

                                                                

                                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.

                                               SKYLINE CORPORATION    





DATE:      January 12, 1996                 /S/ Joseph B. Fanchi        
                                                Joseph B. Fanchi
                                           V.P. Finance & Treasurer, 
                                            Chief Financial Officer




DATE:      January 12, 1996                 /S/ James R. Weigand        
                                                James R. Weigand 
                                              Corporate Controller

 


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<CIK> 0000090896
<NAME> SKYLINE CORPORATION
<MULTIPLIER> 1000
       
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