<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1996
-------------
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from ........ to .........
Commission file number: 0-22268
NATIONAL R.V. HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0371079
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3411 N. Perris Blvd.
Perris, California 92571
(909) 943-6007
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
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 _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at November 12, 1996
- ----- ----------------------------
Common stock, par value 5,292,579
$.01 per share
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<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
INDEX
PAGE
----
<S> <C>
PART 1 - FINANCIAL INFORMATION
Item 1. Consolidated Balance Sheet -
September 30, 1996 and December 31, 1995 3
Consolidated Statement of Income -
Three and Nine Months Ended September 30, 1996 and 1995 4
Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 5
Consolidated Statement of Changes in Stockholders' Equity 6
Notes to Consolidated Financial Statements 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
Signature 11
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2
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<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
September 30, December 31,
1996 1995
-------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 2,670 $ 73
Trade receivables, less allowance for
doubtful accounts of $40,000 7,789 6,683
Inventories 14,376 14,347
Deferred income taxes 780 483
Prepaid expenses 569 393
-------- --------
Total current assets 26,184 21,979
Restricted funds 1,749 4,847
Property, plant and equipment, net 10,585 7,482
------- -------
$38,518 $34,308
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Line of credit $ - $ 1,900
Current portion of long-term debt 146 146
Accounts payable 3,301 3,405
Accrued expenses 2,321 1,448
------- -------
Total current liabilities 5,768 6,899
Deferred income taxes 1,738 1,750
Long-term debt 6,925 7,034
Commitments and contingencies
Stockholders' equity:
Preferred stock - $.01 par value; 5,000 shares
authorized, 4,000 issued and outstanding - -
Common stock - $.01 par value; 10,000,000 shares
authorized 59 37
Additional paid-in capital 22,421 21,062
Accumulated earnings 9,555 4,521
Less - cost of treasury stock (7,948) (6,995)
Total stockholders' equity 24,087 18,625
------- -------
$38,518 $34,308
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
3
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<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands except per share data)
(Unaudited)
Three Months Nine Months
------------------ -----------------
Ended September 30, Ended September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $27,139 $22,940 $94,958 $65,814
Cost of goods sold 23,422 19,917 82,183 56,901
------- ------- ------- -------
Gross profit 3,717 3,023 12,775 8,913
Selling expenses 719 651 2,367 1,890
General and administrative expenses 588 438 1,773 1,820
------- ------- ------- -------
Operating income 2,410 1,934 8,635 5,203
Other expense (income):
Interest expense 42 121 237 564
Interest income (48) (172) (184) (604)
Other financing related costs 37 27 114 79
------- ------- ------- -------
Income before income taxes and
extraordinary items 2,379 1,958 8,468 5,164
Provision for income taxes 968 757 3,434 1,993
------- ------- ------- -------
Income before extraordinary items 1,411 1,201 5,034 3,171
Extraordinary loss on investment in
marketable equity securities, no tax
effect (958)
Extraordinary gain on early extinguishment
of debt, net of income taxes of $234,000 342 342
------- ------- ------- -------
Net income $ 1,411 $ 1,543 $ 5,034 $ 2,555
======= ======= ======= =======
Earnings per common share and common equivalent shares:
Income before extraordinary item $ 0.27 $ 0.25 $ 1.00 $ 0.65
Extraordinary item - 0.07 - (0.20)
------- ------- ------- -------
Net income $ 0.27 $ 0.32 $ 1.00 $ 0.45
Earnings per common share - assuming full dilution:
Income before extraordinary item $ 0.27 $ 0.25 $ 0.99 $ 0.65
Extraordinary item - 0.07 - (0.20)
------- ------- ------- -------
Net income $ 0.27 $ 0.32 $ 0.99 $ 0.45
Weighted average number of shares:
Primary 5,247 4,857 5,045 4,878
Fully diluted 5,296 4,862 5,066 4,881
</TABLE>
See Notes to Consolidated Financial Statements
4
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<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months
-----------------
Ended September 30,
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,034 $ 2,555
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense 358 266
Amortization of deferred financial income - (165)
Loss on investment in marketable equity securities - 958
Gain on disposition of equipment - (23)
Gain on early extinguishment of debt - (576)
Increase in trade receivables (1,106) (1,090)
(Increase) decrease in inventories (29) 1,968
(Increase) decrease in prepaid expenses (176) 75
(Decrease) increase in accounts payable (104) 623
Increase in accrued expenses 873 274
(Decrease) increase in deferred income taxes (309) 290
------- -------
Net cash provided by operating activities 4,541 5,155
Cash flows from investing activities:
Proceeds from disposition of equipment - 23
Proceeds from investment in marketable equity securities - 134
Purchases of property, plant and equipment (3,461) (571)
------- -------
Net cash used by investing activities (3,461) (414)
Cash flows from financing activities:
Net payments under line of credit (1,900) (2,800)
Decrease in restricted funds 3,098 -
Principal payments on revenue bonds (109) (117)
Proceeds from issuance of common stock 1,381 54
Purchase of treasury stock (953) (359)
------- -------
Net cash provided (used) by financing activities 1,517 (3,222)
------- -------
Net increase in cash 2,597 1,519
Cash beginning of period 73 301
------- -------
Cash end of period $ 2,670 $ 1,820
======= =======
</TABLE>
See Notes to Consolidated Financial Statements
5
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<TABLE>
<CAPTION>
NATIONAL R.V. HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands except shares)
(Unaudited)
Common Stock
Preferred -------------- Paid-in Retained
Stock Shares Amount Capital Earnings
------- --------- ------ ------- --------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1995 $ - 5,555,162 $ 37 $21,062 $ 4,521
Purchase of Treasury Stock
Common Stock issued upon
exercise of warrants 352,933 3 1,321
Common Stock issued under
option plan 14,398 57
Adjustment for stock split 19 (19)
Net income 5,034
-------- --------- ------ ------- --------
Balance, September 30, 1996 $ - 5,922,493 $ 59 $22,421 $ 9,555
======== ========= ====== ======= ========
</TABLE>
<TABLE>
<CAPTION>
(Continued from above) Treasury Stock
Shares Amount Total
---------- --------- --------
<S> <C> <C> <C>
Balance, December 31, 1995 (1,083,330) $ (6,995) $ 18,625
Purchase of Treasury Stock (95,370) (953) (953)
Common Stock issued upon
exercise of warrants 1,324
Common Stock issued under
option plan 57
Adjustment for stock split -
Net income 5,034
---------- -------- --------
Balance, September 30, 1996 (1,178,700) $ (7,948) $ 24,087
========== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
6
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NATIONAL R.V. HOLDINGS, INC.
PART I, ITEM 1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - GENERAL
- ----------------
In the opinion of National R.V. Holdings, Inc. (collectively, with its
subsidiary National R.V., Inc., referred to herein as the "Company"), the
accompanying unaudited consolidated financial statements contain all adjust-
ments, consisting only of normal recurring adjustments, necessary for the fair
presentation of the financial position, results of operations and cash flows
for all periods presented. Results for the interim periods are not neces-
sarily indicative of the results for an entire year and the financial state-
ments do not include all of the information and footnotes required by
generally accepted accounting principles. These financial statements should
be read in conjunction with the financial statements and notes thereto
contained in the Company's latest annual report on Form 10-K.
NOTE 2 - INVENTORIES
- --------------------
Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
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<S> <C> <C>
Finished goods $ 3,753,000 $ 5,289,000
Work-in-process 3,408,000 3,211,000
Raw materials 5,088,000 5,125,000
Chassis 2,127,000 722,000
----------- -----------
$14,376,000 $14,347,000
=========== ===========
</TABLE>
7
<PAGE>
NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
At September 30, 1996, the Company had working capital of $20.4 million
compared to $15.1 million at December 31, 1995. Net cash provided by operating
activities was $4.5 million for the nine months ended September 30, 1996,
compared to $5.1 million for the same period in 1995. An increase in net income
was offset by unfavorable changes in inventories, accrued expenses and deferred
income taxes.
Cash used in investing activities was $3.5 million compared to $0.4 million
for the comparable period last year. The increase was primarily due to capital
expenditures for the construction of a new 154,000 square foot building which is
expected to be operational by February 1997..
Cash provided by financing activities was $1.5 million compared to cash used
by financing activities of $3.2 million for the comparable period last year.
The change was primarily due to a $3.1 million decrease in restricted funds
related to the building construction and $1.4 million proceeds from the
issuance of common stock offset by a $0.9 million decrease in the line of
credit and the $1.0 million purchase of treasury stock.
The Company has a $10.0 million line of credit agreement which is in effect
through June 15, 1998. All amounts under this line were available at
September 30, 1996. Amounts outstanding bear interest at prime (8.25% at
September 30,1996) and are secured by assets not specifically identified in
other financing obligations. The terms of the agreement require compliance
with certain financial covenants and other covenants. The Company was in
compliance with all covenants at September 30, 1996.
The Company believes that the combination of internally generated funds,
existing capital and funds available from its existing credit facility, will be
sufficient to meet the Company's planned capital and operational requirements
for at least the next 24 months.
Results of Operations
- ---------------------
Net sales for the third quarter of 1996 increased by $4.2 million or 18.3%
from the comparable period last year. For the first nine months of 1996, the
Company reported net sales of $95.0 million, 44.3% higher than net sales of
$65.8 million for the first nine months of last year. This increase resulted
primarily from a shift in product mix to the higher priced Dolphin and
Tropi-Cal motorhomes and a 417 unit increase in the net sales of the Company's
Class A motorhomes, offset by a 77 unit decrease in the net sales of the
Company's fifth-wheel products.
Cost of goods sold of $23.4 million for the third quarter of 1996 resulted
in a gross margin of 13.7% compared to a gross margin of 13.2% for the same
period last year. The higher gross margin was due primarily to a model year
price increase and a favorable product mix shift to our higher priced products.
Cost of goods sold of $82.2 million for the first nine months of 1996 resulted
in a gross margin of 13.5% which was the same for the comparable period last
year.
8
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NATIONAL R.V. HOLDINGS, INC.
PART 1, ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Selling expense for the third quarter of 1996 was $0.7 million or 2.6% of
net sales, compared to $0.7 million or 2.8% of net sales for the same period
last year. Selling expense for the first nine months of 1996 increased to $2.4
million or 2.5% of net sales, compared to $1.9 million or 2.9% of net sales for
the same period last year.
General and administrative expense for the third quarter of 1996 increased
to $0.6 million or 2.2% of net sales, compared to $0.4 million or 1.9% of net
sales for the same period last year. General and administrative expense for
the first nine months of 1996 was $1.8 million or 1.9% of net sales, compared
to $1.8 million or 2.8% of net sales for the same period last year.
As a result of the foregoing, operating income for the third quarter of
1996 increased 24.6% to $2.4 million or 8.9% of net sales, compared to $1.9
million or 8.4% of net sales for the same period last year. Operating income
for the first nine months of 1996 increased 66.0% to $8.6 million or 9.1% of
net sales, compared to $5.2 million or 7.9% of net sales for the same period
last year.
Net interest expense and other financing related costs for the first nine
months of 1996 increased $128,000 due principally to a net interest gain last
year related to obligations to previous owners that were paid in September 1995.
As a result of the foregoing, income before income taxes and extraordinary
items for the third quarter of 1996 increased to $2.4 million or 8.8% of net
sales, compared to $2.0 million or 8.5% of net sales for the same period last
year. Income before income taxes and extraordinary items for the first nine
months of 1996 increased to $8.5 million or 8.9% of net sales, compared to $5.2
million or 7.8% of net sales for the same period last year.
Provision for income taxes for the third quarter of fiscal 1996 was $1.0
million compared to $0.8 million for the same period last year. Provision for
income taxes for the first nine months of 1996 was $3.4 million compared to
$2.0 million for the same period last year. The effective tax rate for the
first nine months of 1996 was 40.6% compared to 38.6% for the same period
last year.
As a result of the foregoing, income before extraordinary items for the
third quarter of 1996 increased to $1.4 million or 5.2% of net sales,
compared to $1.2 million or 5.2% of net sales for the same period last year.
Income before extraordinary items for the first nine months of 1996 increased
to $5.0 million or 5.3% of net sales, compared to $3.2 million or 4.8% of
net sales for the same period last year.
The Company realized a $342,000 gain on the early extinguishment of debt
owed to previous owners, net of income taxes of $234,000 in the third quarter
of 1995.
As a result of the foregoing, net income for the first nine months of 1996
increased to $5.0 million or 5.3% of net sales, compared to $2.6 million, or
3.9% of net sales for the same period last year.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
- ------------
Exhibit 99 - Forward Looking Statements
B. Form 8-K
- ------------
None
10
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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.
NATIONAL R.V. HOLDINGS, INC.
----------------------------
(Registrant)
Date: November 12, 1996 By /s/ WAYNE M. MERTES
Wayne M. Mertes
(President and Chief Executive Officer)
Date: November 12, 1996 By /s/ KENNETH W. ASHLEY
Kenneth W. Ashley
(Chief Financial Officer and Treasurer)
11
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Exhibit 99
- ----------
Forward Looking Statements
The reports of National R.V. Holdings, Inc., a Delaware corporation (the
"Registrant"), under the Securities Exchange Act of 1934 contain forward-looking
statements which involve risks and uncertainties. The Companys actual results
may differ significantly from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, the following considerations: (i) the cyclical nature of the
recreational vehicle industry, seasonality and potential fluctuations in the
Registrants operating results; (ii) the registrants dependence on chassis
suppliers; (iii) the integration by the Registrant of acquired businesses and
the management of growth; (iv) potential liabilities under repurchase
agreements; (v) competition; (vi) government regulation; (vii) product
liability; (viii) dependence on key personnel; (ix) dependence on certain
dealers and concentration of dealers in certain regions; (x) expansion of
manufacturing facilities; (xi) control by affiliates; and (xii) antitakeover
provisions.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,670
<SECURITIES> 0
<RECEIVABLES> 7,829
<ALLOWANCES> 40
<INVENTORY> 14,376
<CURRENT-ASSETS> 26,184
<PP&E> 13,287
<DEPRECIATION> 2,702
<TOTAL-ASSETS> 38,518
<CURRENT-LIABILITIES> 5,768
<BONDS> 6,925
0
0
<COMMON> 59
<OTHER-SE> 24,087
<TOTAL-LIABILITY-AND-EQUITY> 38,518
<SALES> 94,958
<TOTAL-REVENUES> 94,958
<CGS> 82,183
<TOTAL-COSTS> 82,183
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 237
<INCOME-PRETAX> 8,468
<INCOME-TAX> 3,434
<INCOME-CONTINUING> 5,034
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,034
<EPS-PRIMARY> 1.00
<EPS-DILUTED> .99
</TABLE>
