SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A (No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 1, 1996
Featherlite Mfg., Inc.
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation)
0-24804 41-1621676
(Commission File Number) (I.R.S. Employer Identification No.)
Highways 63 and 9, Cresco, Iowa 52136
(Address of principal executive offices) (Zip Code)
(319) 547-6000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
(1) Audited Financial Statements of Vantare International, Inc. as of
December 31, 1995 and for the year then ended, consisting of:
(A) Independent Auditors' Report
(B) Balance Sheet
(C) Statement of Operations and Accumulated Deficit
(D) Statement of Cash Flows
(E) Notes to Financial Statements
(2) Unaudited Financial Statements of Vantare International, Inc. as of
June 30, 1996 and for the six month periods ended June 30, 1996 and June
30, 1995, consisting of:
(A) Balance Sheets
(B) Statements of Operations and Accumulated Deficit
(C) Statements of Cash Flows
(D) Notes to Financial Statements
(b) Pro Forma Financial Information
(1) Pro Forma Combined Consolidated Financial Information consisting of:
(A) Pro forma combined consolidated balance sheet as of June 30,
1996.
(B) Pro forma consolidated statements of income for the six month
period ended June 30, 1996 and the year ended December 31, 1995
(C) Notes to Pro forma Consoldidated Financial Statements
(c) Exhibits
See Exhibit Index on page following Signatures
<PAGE>
The Board of Directors
Vantare International, Inc.
Port of Sanford, Florida
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheet of Vantare International,
Inc. (the "Company") as of December 31, 1995, and the related statements of
operations and accumulated deficit and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Vantare
International, Inc. as of December 31, 1995, and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles.
/s/ Graham & Cottrill, P.A.
GRAHAM & COTTRILL, P.A.
June 28, 1996
<PAGE>
VANTARE INTERNATIONAL, INC.
BALANCE SHEET
December 31, 1995
ASSETS
CURRENT ASSETS:
Accounts receivable:
Trade, net $ 31,544
Insurance claim 122,386
Inventories 4,335,715
Prepaid expenses and other 27,578
---------
Total current assets 4,517,223
PROPERTY AND EQUIPMENT, at cost less accumulated depreciation 214,469
DEPOSITS AND OTHER ASSETS 119,185
---------
Total assets $4,850,877
==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Checks issued not yet presented $ 520,847
Line of credit 837,085
Trade accounts payable 1,999,214
Accrued expenses and other liabilities 291,313
Customer deposits 2,104,185
---------
Total current liabilities 5,752,644
NOTE PAYABLE TO STOCKHOLDER 166,099
---------
Total liabilities 5,918,743
STOCKHOLDER'S DEFICIT:
Common stock 500
Additional paid-in capital 384,570
Accumulated deficit (1,452,936)
-----------
Total stockholder's deficit (1,067,866)
-----------
Total liabilities and stockholder's deficit $4,850,877
==========
See The Notes To Financial Statements
1
<PAGE>
VANTARE INTERNATIONAL, INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
For The Year Ended December 31, 1995
NET SALES $19,821,341
COST OF SALES 19,368,551
----------
GROSS PROFIT 452,790
OPERATING EXPENSES 698,678
----------
LOSS FROM OPERATIONS (245,888)
----------
OTHER INCOME (EXPENSE):
Property damage claim 122,386
Miscellaneous income 20,566
Interest expense (50,798)
----------
Total other income (expense), net 92,154
----------
NET LOSS (153,734)
ACCUMULATED DEFICIT - Beginning of year (1,299,202)
----------
ACCUMULATED DEFICIT - End of year $(1,452,936)
==========
See The Notes To Financial Statements
2
<PAGE>
VANTARE INTERNATIONAL, INC.
STATEMENT OF CASH FLOWS
For The Year Ended December 31, 1995
CASH FLOWS USED FOR OPERATING ACTIVITIES:
Net loss $ (153,734)
Adjustments to reconcile net loss to net cash
flows from operating activities:
Depreciation 36,268
Bad debt expense 9,821
Loss on sale of property and equipment 449
Change in accounts receivable (136,302)
Change in inventories (951,799)
Change in prepaid expenses and other (27,067)
Change in other assets 35,000
Change in trade accounts payable 437,848
Change in accrued expenses and other liabilities 127,755
Change in customer deposits (56,364)
--------
Net cash flows used for operating activities (678,125)
--------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Purchases of property and equipment (68,514)
Proceeds from sale of property and equipment 12,233
--------
Net cash flows used for investing activities (56,281)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Checks issued not yet presented 520,847
Borrowings from stockholder 51,021
Repayment of borrowings from stockholder (163,232)
Net borrowings on line of credit 319,343
Repayment of other borrowings (6,436)
--------
Net cash flows from financing activities 721,543
--------
NET CHANGE IN CASH (12,863)
CASH - Beginning of year 12,863
--------
CASH - End of year $ --
--------
SUPPLEMENTAL DISCLOSURE:
Cash paid during the year for:
Interest $ 33,630
========
See The Notes To Financial Statements
3
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Industry: The Company is a manufacturer and servicer of custom
bus-conversion motor coaches which commenced operations in 1991. The
Company primarily sells its product to individuals throughout the United
States and Canada.
Revenue recognition: The Company recognizes revenue, net of all anticipated
discounts, when the title to the motor coach passes, normally upon
completion of production and issuance of an invoice and Manufacturer's
Statement of Origin. Customer deposits consist of cash down payments and
vehicle trade-ins and are recognized as revenue based upon the above
conditions being met.
Inventories: New coach shells and used coaches are stated at the lower of
cost or market on a specific identification basis. Raw material inventories
are stated at the lower of cost or market with costs determined by the
average cost method. New coach shells are obtained subject to consignment
agreements with manufacturers and it is the Company's policy to record them
as part of work in progress inventories and trade accounts payable.
Depreciation: Depreciation is recorded using straight-line methods over the
estimated useful lives of the related assets for financial reporting
purposes.
Income taxes: The Company, with consent of its stockholder, has elected
under Internal Revenue Code Section 1362(a) to be taxed as an S-Corporation
as of January 1, 1992, whereby income or losses are passed through the
Corporation to the individual stockholder. Accordingly, no provision for
income taxes has been presented in the accompanying financial statements.
The primary differences between the basis of items for income tax purposes
and the carrying amounts of such items for financial reporting purposes
relate to accounts receivable, inventory overhead, depreciation expense,
warranty reserve, and accrued vacation pay.
Advertising costs: The Company expenses advertising costs as incurred.
Total advertising costs included in "operating expenses" in the
accompanying financial statements amounted to $84,815 for the year ended
December 31, 1995.
Warranty reserve: A product warranty reserve of $115,000 as of December 31,
1995, which is based on estimates of future costs associated with
fulfilling warranty obligations, is included in "accrued expenses and other
liabilities" in the accompanying financial statements. The estimates are
derived from historical cost experience.
Fair value of financial instruments: The estimated fair value of the
Company's cash equivalents and trade accounts receivable and payable
approximated their carrying value at year-end. It is not practicable to
estimate the fair value of other financial instruments held or owed by the
Company including, but not limited to, other receivables and payables
(including notes payable) due to the lack of readily available information
regarding the marketability of such instruments and the effects of credit
risk on the measurement of fair value for such instruments.
Use of estimates: Management uses estimates and assumptions in preparing
financial statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and reported revenues and expenses. Significant estimates used
in preparing these financial statements include those assumed in computing
the allowance for doubtful accounts, inventory overhead, depreciation
expense, and certain accrued expenses including the warranty reserve. It is
at least reasonably possible that the significant estimates used will
change within the next year.
See The Accompanying Independent Auditors' Report
4
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE B - ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
At December 31, 1995, the Company had a claim with an insurance company for
hail damage to motor coaches in inventory in the amount of $122,386.
A summary of the changes in the allowance for doubtful accounts follows:
Balance - Beginning of year $ (7,500)
Provision charged to net loss (9,821)
Accounts written off 3,587
--------
Balance - End of year $ (13,734)
========
NOTE C - INVENTORIES:
Inventories consist of the following:
Raw materials $ 225,247
Work in progress 2,521,968
Used coaches 1,588,500
---------
Total inventories $4,335,715
=========
NOTE D - PROPERTY AND EQUIPMENT:
Property and equipment consist of the following:
Depreciable
Category Cost Lives
Furniture, fixtures and equipment $ 231,652 5 - 7 years
Vehicle 13,100 5 years
Leasehold improvements 24,660 10 years
Total 269,412
Less: Accumulated depreciation (54,943)
--------
Net property and equipment $ 214,469
========
NOTE E - LINE OF CREDIT:
The Company has available a $1,000,000 line of credit with a brokerage
company, which is collateralized by an investment account belonging to the
Company's sole stockholder. The line of credit bears interest at the prime
rate plus .75% (prime was 8.5% at December 31, 1995) and expires November
31, 1996. As of December 31, 1995, the outstanding balance under the line
of credit agreement was $837,085.
See The Accompanying Independent Auditors' Report
5
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
NOTE F - STOCKHOLDER'S EQUITY:
The Company's common stock has no par value. Twenty shares are authorized,
issued and outstanding at December 31, 1995.
NOTE G - RELATED PARTY TRANSACTIONS:
At December 31, 1995, the Company has a note payable to its sole
stockholder in the amount of $166,099. The note bears interest of 6%
annually and is not evidenced by a written instrument. It is a long term
loan with no set repayment schedule.
NOTE H - CERTAIN CONCENTRATIONS:
The Company currently buys most of its coach shells from one supplier.
Although there are a limited number of manufacturers of the coach shells,
management believes that other suppliers could provide similar coach shells
on similar terms.
NOTE I - COMMITMENT:
The Company has entered into an operating lease agreement for its
facilities. Total lease expense under this lease amounted to $124,596 for
the year ended December 31, 1995. Future minimum lease payments under this
noncancellable operating lease as of December 31, 1995, are as follows:
Year Ending
December 31,
------------
1996 $ 83,064
=========
NOTE J - SUBSEQUENT EVENTS:
The Company plans to enter into an agreement to sell substantially all of
its assets and liabilities to Featherlite Manufacturing, Inc. in a tax-free
reorganization pursuant to Internal Revenue Code Section 368. The sale is
scheduled for closing on July 1, 1996.
See The Accompanying Independent Auditors' Report
6
<PAGE>
VANTARE INTERNATIONAL, INC.
BALANCE SHEETS
(unaudited)
ASSETS
June 30,
1996 1995
CURRENT ASSETS:
Cash $ 36,814 $ 227,858
Investment-debt security 50,512 --
Temporary investment in marketable
equity securities 229,339 --
Accounts receivable:
Trade, net 9,360 9,193
Insurance claim 122,386 --
Inventories 5,628,350 2,798,448
Prepaid expenses and other 5,296 2,983
--------- ---------
Total current assets 6,082,057 3,038,482
PROPERTY AND EQUIPMENT, at cost less
accumulated depreciation 190,495 208,347
DEPOSITS AND OTHER ASSETS 154,185 154,185
--------- ---------
Total assets $6,426,737 $3,401,014
========= =========
LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Checks issued not yet presented $ 776,348 $ --
Line of credit 739,725 666,845
Floor plan notes payable 718,032 --
Trade accounts payable 2,479,045 1,632,145
Accrued expenses and other liabilities 309,728 187,882
Customer deposits 2,581,097 2,308,623
--------- ---------
Total current liabilities 7,603,975 4,795,495
NOTE PAYABLE TO STOCKHOLDER 238,758 245,814
--------- ---------
Total liabilities 7,842,733 5,041,309
--------- ---------
STOCKHOLDER'S DEFICIT:
Common stock 500 500
Additional paid-in capital 384,570 384,570
Accumulated deficit (1,797,873) (2,025,365)
Unrealized loss on investment securities
available-for-sale (3,193) --
--------- ---------
Total stockholder's deficit (1,415,996) (1,640,295)
Total liabilities and
stockholder's deficit $ 6,426,737 $ 3,401,014
========= =========
See The Accompanying Notes To Financial Statements
1
<PAGE>
VANTARE INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(unaudited)
For The Six Months Ended
June 30,
1996 1995
NET SALES $ 12,180,460 $ 10,995,566
COST OF SALES 12,108,054 11,295,309
---------- ----------
GROSS PROFIT 72,406 (299,743)
OPERATING EXPENSES 399,135 415,982
---------- ----------
LOSS FROM OPERATIONS (326,729) (715,725)
---------- ----------
OTHER INCOME (EXPENSE):
Gain on sales of investment securities
available-for-sale 12,068 --
Dividend income 3,062 --
Miscellaneous income 7,351 19,534
Interest expense (40,689) (29,972)
---------- ----------
Total other income (expense), net (18,208) (10,438)
NET LOSS (344,937) (726,163)
ACCUMULATED DEFICIT - Beginning of period (1,452,936) (1,299,202)
---------- ----------
ACCUMULATED DEFICIT - End of period $ (1,797,873) $ (2,025,365)
========== ==========
See The Accompanying Notes To Financial Statements
2
<PAGE>
VANTARE INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
For The Six Months Ended
June 30,
1996 1995
<S> <C> <C>
CASH FLOWS FROM (USED FOR) OPERATING ACTIVITIES:
Net loss $ (344,937) $ (726,163)
Adjustments to reconcile net loss to net cash flows from (used for)
operating activities:
Depreciation 21,846 16,324
Bad debt expense -- 1,320
Gain on sales of investment securities available-for-sale (12,068) --
Change in accounts receivable 22,184 16,936
Change in inventories (1,292,635) 585,468
Change in prepaid expenses and other 22,282 (2,472)
Change in other assets (35,000) --
Change in trade accounts payable 479,831 70,779
Change in accrued expenses and other liabilities 18,415 24,324
Change in customer deposits 476,912 148,074
--------- -------
Net cash flows from (used for) operating activities (643,170) 134,590
--------- -------
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Proceeds from sales of investment securities available-for-sale 141,016 --
Purchases of investment securities available-for-sale (411,992) --
Purchases of property and equipment (461) (38,470)
Proceeds from sale of property and equipment 2,589 8,704
--------- -------
Net cash flows used for investing activities (268,848) (29,766)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Checks issued not yet presented 776,348 --
Borrowings from stockholder 76,775 7,821
Repayment of borrowings from stockholder (4,116) (40,317)
Net borrowings (repayments) on line of credit (97,360) 149,103
Net borrowings on floor plan notes payable 718,032 --
Repayment of other borrowings -- (6,436)
--------- -------
Net cash flows from financing activities 1,469,679 110,171
--------- -------
NET CHANGE IN CASH 557,661 214,995
CASH - Beginning of period (520,847) 12,863
--------- -------
CASH - End of period $ 36,814 $ 227,858
========= =======
SUPPLEMENTAL DISCLOSURE:
Cash paid during the period for:
Interest $ 46,388 $ 16,981
========= =======
</TABLE>
See The Accompanying Notes To Financial Statements
3
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Industry: The Company is a manufacturer and servicer of custom
bus-conversion motor coaches which commenced operations in 1991. The
Company primarily sells its product to individuals throughout the United
States and Canada.
Revenue recognition: The Company recognizes revenue, net of all anticipated
discounts, when the title to the motor coach passes, normally upon
completion of production and issuance of an invoice and Manufacturer's
Statement of Origin. Customer deposits consist of cash down payments and
vehicle trade-ins and are recognized as revenue based upon the above
conditions being met.
Investment securities: Investment equity and debt securities are classified
as available-for-sale and are carried at fair value. Unrealized gains and
losses on securities available-for-sale are recognized as direct increases
or decreases in stockholders' deficit. Gains or losses on disposition are
based on the net proceeds and the adjusted carrying amounts of the
securities sold, using the specific identification method.
Inventories: New coach shells and used coaches are stated at the lower of
cost or market on a specific identification basis. Raw material inventories
are stated at the lower of cost or market with costs determined by the
average cost method. New coach shells are obtained subject to consignment
agreements with manufacturers and it is the Company's policy to record them
as part of work in progress inventories and trade accounts payable.
Depreciation: Depreciation is recorded using straight-line methods over the
estimated useful lives of the related assets for financial reporting
purposes.
Income taxes: The Company, with consent of its sole stockholder, has
elected under Internal Revenue Code Section 1362(a) to be taxed as an
S-Corporation as of January 1, 1992, whereby income or losses are passed
through the Corporation to the individual stockholder. Accordingly, no
provision for income taxes has been presented in the accompanying financial
statements. The primary differences between the bases of items for income
tax purposes and the carrying amounts of such items for financial reporting
purposes relate to accounts receivable, inventory overhead, depreciation
expense, warranty reserve, and accrued vacation pay.
Advertising costs: The Company expenses advertising costs as incurred.
Total advertising costs included in "operating expenses" in the
accompanying financial statements amounted to $57,180 and $71,676 for the
six months ended June 30, 1996 and 1995, respectively.
Warranty reserve: A product warranty reserve of $137,000 and $89,000 as of
June 30, 1996 and 1995, respectively, which is based on estimates of future
costs associated with fulfilling warranty obligations, is included in
"accrued expenses and other liabilities" in the accompanying financial
statements. The estimates are derived from historical cost experience.
Cash and cash equivalents: The Company's policy is to include in cash and
cash equivalents all highly liquid investments with original maturities of
three months or less.
Fair value of financial instruments: The estimated fair value of the
Company's cash equivalents and trade accounts receivable and payable
approximated their carrying value at year-end. The fair value of investment
securities held is disclosed in Notes C and D. It is not practicable to
estimate the fair value of other financial instruments held or owed by the
Company including, but not limited to, other receivables and payables
(including notes payable) due to the lack of readily available information
regarding the marketability of such instruments and the effects of credit
risk on the measurement of fair value for such instruments.
4
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Use of estimates: Management uses estimates and assumptions in preparing
financial statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities, and reported revenues and expenses. Significant estimates used
in preparing these financial statements include those assumed in computing
the allowance for doubtful accounts, inventory overhead, depreciation
expense, and certain accrued expenses including the warranty reserve. It is
at least reasonably possible that the significant estimates used will
change within the next year.
NOTE B - CONCENTRATION OF CREDIT RISK:
The Company maintains its cash in bank accounts which, at times, may exceed
federally insured limits. The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk
on cash and cash equivalents.
NOTE C - INVESTMENT-DEBT SECURITY:
Investment in debt security consisted of the following:
<TABLE>
<CAPTION>
Gross
Amortized Unrealized Fair Market
Cost Gains (Losses) Value
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury security $ 50,287 $ -- $ 225 $ -- $50,512 $ --
</TABLE>
No gains or losses were recognized on the debt security during the six months
ended June 30, 1996 or 1995.
The amortized cost and fair market value of the debt security at June 30, 1996
and 1995, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Fair Market
Cost Value
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Due in one year or less $ -- $ -- $ -- $ --
Due after one year through five years 50,287 -- 50,512 --
------- ---- ------ -----
Total $ 50,287 $ -- $50,512 $ --
======= ==== ====== =====
</TABLE>
At June 30, 1996, the U.S. Treasury security, which had a $230,000 par
value, was pledged as collateral for a certain deposit account and line of
credit.
5
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE D - TEMPORARY INVESTMENT IN MARKETABLE EQUITY SECURITIES:
Temporary investment in marketable equity securities consisted of the
following:
<TABLE>
<CAPTION>
Gross
Unrealized Fair Market
Cost Gains (Losses) Value
June 30, June 30, June 30,
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Common stocks $ 232,757 $ -- $ (3,418) $ -- $ 229,339 $ --
======== ===== ======== ==== ======== =====
</TABLE>
Gains in the amount of $12,068 were recognized on equity securities during
the six months ended June 30, 1996.
NOTE E - ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
At June 30, 1996, the Company had a claim with an insurance company for
hail damage to motor coaches in inventory in the amount of $122,386.
A summary of the changes in the allowance for doubtful accounts follows:
June 30,
1996 1995
Balance - Beginning of period $(13,734) $ (7,500)
Provision charged to net loss -- (1,320)
Accounts written off 6,234 1,320
------- ------
Balance - End of period $ (7,500) $ (7,500)
======= ======
NOTE F - INVENTORIES:
Inventories consisted of the following:
June 30,
1996 1995
Raw materials $ 325,792 $ 208,431
Work in progress 3,114,733 1,393,749
Used coaches 2,048,000 1,165,000
Accessory vehicles 139,825 31,268
--------- ---------
Total inventories $ 5,628,350 $ 2,798,448
========= =========
6
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE G - PROPERTY AND EQUIPMENT:
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
June 30, Depreciable
Category 1996 1995 Lives
<S> <C> <C> <C>
Furniture, fixtures and equipment $ 229,524 $ 220,166 5 - 7 years
Vehicle 13,100 -- 5 years
Leasehold improvements 24,660 24,660 10 years
------- -------
Total 267,284 244,826
Less: Accumulated depreciation (76,789) (36,479)
------- -------
Net property and equipment $ 190,495 $ 208,347
======= =======
</TABLE>
NOTE H - LINE OF CREDIT:
The Company has available a $1,000,000 and $650,000 line of credit at June
30, 1996 and 1995, respectively, with a brokerage company, which is
collateralized by an investment account belonging to the Company's sole
stockholder. The line of credit bears interest at the prime rate plus .75%
and expires November 31, 1996. As of June 30, 1996 and 1995, the
outstanding balances under the line of credit agreement were $739,725 and
$666,845, respectively.
NOTE I - FLOOR PLAN NOTES PAYABLE:
Floor plan notes payable consisted
of the following:
June 30,
1996 1995
Floor plan notes payable, secured by
substantially all assets, due as the used
coaches are sold, interest payable monthly
at 2.35% over prime, guaranteed by
the Company's sole stockholder $ 718,032 $ --
======= ======
Total interest expense on the above notes amounted to $25,164 and $0 for
the six months ended June 30, 1996 and 1995, respectively.
NOTE J - STOCKHOLDER'S EQUITY:
The Company's common stock has no par value. Twenty shares are authorized,
issued and outstanding at June 30, 1996 and 1995, respectively.
7
<PAGE>
VANTARE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE K - RELATED PARTY TRANSACTIONS:
At June 30, 1996 and 1995, the Company has a note payable to its sole
stockholder in the amount of $238,758 and $245,814, respectively. The note
bears interest at 6% annually and is not evidenced by a written instrument.
It is a long-term loan with no set repayment schedule.
NOTE L - CERTAIN CONCENTRATIONS:
The Company currently buys most of its coach shells from one supplier.
Although there are a limited number of manufacturers of the coach shells,
management believes that other suppliers could provide similar coach shells
on similar terms.
NOTE M - COMMITMENT:
The Company has entered into an operating lease agreement for its
facilities. Total lease expense under this lease amounted to $62,298 for
the six months ended June 30, 1996 and 1995. Future minimum lease payments
under this noncancellable operating lease as of June 30, 1996 are as
follows:
Year Ending
June 30,
1997 $ 20,766
=======
NOTE N - SUBSEQUENT EVENT:
The Company sold substantially all of its assets and liabilities to
Featherlite Manufacturing, Inc. on July 1, 1996.
8
<PAGE>
FEATHERLITE MFG. INC
Unaudited Pro Forma Consolidated Financial Statements
The following unaudited pro forma financial statements are based on the
historical financial statements of Featherlite Mfg., Inc. These statements also
show the unaudited pro forma information to give effect to the acquisition of
the assets of Vantare International, Inc. which was acquired as of July 1, 1996.
This aquisition was accounted for as a purchase. The accompanying unaudited
combined consolidated balance sheet reflects this acquisition as if it had
occurred at June 30, 1996. The unaudited pro forma consolidated statement of
operations for the six month period ended June 30, 1996 and for the year ended
December 31, 1995 reflect the acquisition as if it occurred as of January 1,
1995. The unaudited pro forma financial statements are not necessarily
indicative of the results of future operations
FEATHERLITE MFG., INC.
Unaudited Pro Forma Combined Consolidated Balance Sheet
June 30, 1996
(dollars in thousands)
<TABLE>
<CAPTION>
--------------Pro Forma ---------------
-----------------------------------------------
ASSETS Featherlite Vantare Adjustments Combined
<S> <C> <C> <C> <C>
Current Assets
Cash and short term investments 831 317 1,148
Accounts receivable 6,108 132 6,240
Inventories 17,796 5,628 23,424
Other current assets 974 5 979
------------ ------------ -------------
Total current assets 25,709 6,082 31,791
Property and equipment, net 12,344 190 77 (2) 12,611
Intangibles and other assets 6,320 154 3,740 (1)(2) 10,214
============ ============ =============== =============
44,373 6,426 3,817 54,616
============ ============ =============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities long term debt 911 911
Other notes payable 166 1,458 1,624
Accounts payable 6,542 3,255 9,797
Other accrued liabilities 2,529 2,891 5,420
------------ ------------ -------------
Total current liabilities 10,148 7,604 17,752
Long term debt 15,389 239 15,628
Other long-term liabilities 818 818
Stockholders' equity
Common stock 12,420 2,400 (1) 14,820
Additional paid-in capital 4,062 384 (384) (1) 4,062
Retained earnings (deficit) 1,536 (1,801) 1,801 (1) 1,536
------------ ------------ --------------- -------------
Total stockholders' equity 18,018 (1,417) 3,817 20,418
------------ ------------ --------------- -------------
44,373 6,426 3,817 54,616
============ ============ =============== =============
</TABLE>
See notes to Pro Forma Financial Statments
<PAGE>
FEATHERLITE MFG., INC.
Unaudited Pro Forma Combined Consolidated Statement of Operations
(dollars in thousands)
<TABLE>
<CAPTION>
For the Six Months Ended June 30, 1996
----------Pro Forma -----------
-----------------------------------
Featherlite Vantare Adjustments Combined
------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
Net Sales 21,169 12,180 33,349
Costs and expenses
Cost of Sales 18,465 12,108 30,573
Selling, general and administrative 2,619 399 88 (3) 3,106
Interest expense 326 41 367
Other (income) expense (263) (23) (286)
------------ ------------ --------------- -------------
Income before taxes 22 (345) (88) (411)
Provision for income taxes 8 (157) (4) (149)
============ ============ =============== =============
Net income 14 (345) 70 (261)
============ ============ =============== =============
Net income per share 0.00 (0.04)
------------ -------------
Common Shares Outstanding (000's) 5955 400 (1) 6355
============ =============== =============
</TABLE>
<TABLE>
<CAPTION>
For the Year Ended December 31, 1995
----------Pro Forma -----------
-----------------------------------
Featherlite Vantare Adjustments Combined
------------ ------------ --------------- -------------
<S> <C> <C> <C> <C>
Net Sales 69,159 19,821 88,980
Costs and expenses
Cost of Sales 58,673 19,368 78,041
Selling, general and administrative 9,993 699 187 (3) 10,879
Interest expense 799 51 850
Other (income) expense (1,478) (143) (1,621)
------------ ------------ --------------- -------------
Income before taxes 1,172 (154) (187) 831
Provision for income taxes 471 (137) (4) 334
============ ============ =============== =============
Net income 701 (154) (50) 497
============ ============ =============== =============
Net income per share 0.12 0.08
------------ -------------
Common Shares Outstanding (000's) 5,955 400 (1) 6,355
============ =============== =============
</TABLE>
See notes to Pro Forma Financial Statments
<PAGE>
FEATHERLITE MFG, INC.
Notes to Pro Forma Consolidated Financial Statements
(1) To reflect the purchase of the assets of Vantare International, Inc. based
on the assumption that the transaction was completed as of July 1, 1996. The
acquisition has been accounted for as purchase and accordingly, the purchase
price of 400,000 restricted shares of the Company's common stock (including
100,000 shares held in escrow pending the attainment of defined earnings by
Vantare for 1996) with a value of approximately $2.4 million was allocated to
the assets acquired and the liabilities assumed based on their fair values. The
excess of the purchase price above the fair value of the net assets acquired of
approximately $3.7 million ( which can be reduced by up to $600,000 if all the
shares in escrow are not issued due to not attaining required defined earnings)
has been assigned to intangible assets and is being amortized over twenty years.
(2) To reflect the restatement of fixed assets to fair value as a result of the
acquisition.
(3) To record amortization of the portion of the purchase price allocated to
intangible assets over 20 years .
(4) To adjust income taxes as a result of the effect of the pro forma
adjustments on income before taxes and to adjust for the change in tax status of
Vantare earnings from being filed as a Subchapter S corporation to filing as
part of a consolidated Subchapter C corporation.
<PAGE>
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 hereto duly authorized
FEATHERLITE MFG., INC.
Registrant
Date: September 13, 1996
By \s\ Conrad Clement
Conrad Clement
President and Chief Executive Officer
By \s\ Jeffery A. Mason
Jeffery A. Mason
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Featherlite Mfg., Inc.
Form 8-K/A (No. 1)
Exhibit No. Description
(2) Agreement and Plan of Reorganization, dated
July 1, 1996, by and among Featherlite Mfg.,
Inc., Vantare International, Inc. and
Michael Guth. Pursuant to Item 601(b)(2) of
Regulation S-K, upon the request of the
Commission, the Registrant undertakes to
furnish supplementally to the Commission a
copy of any schedules to the Agreement and
Plan of Reorganization which are listed in
such agreement--Previously Filed.
(10) Employment Agreement, dated July 1, 1996,
between Featherlite Mfg., Inc.
and Michael Guth--Previously Filed.
