UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 17, 2001
(Date of earliest event reported)
HUFFY CORPORATION
(Exact name of Registrant as specified in its Charter)
| Ohio (State or other jurisdiction of incorporation) | 1-5325 (Commission File No.) | 31-0326270 (IRS Employer Identification Number) |
| 225 Byers Road, Miamisburg, Ohio | 45342-3657 |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (937) 866-6251
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
Huffy Corporation issued a press release announcing that net earnings for the second quarter were $0.8 million or $0.07 per common share, versus net earnings of $4.5 million or $0.44 per common share for the second quarter of 2000.
Item 7. Financial Statements and Exhibits
(a) Exhibits
99.1 Press Release dated July 17, 2001.
SIGNATURE
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 hereunto duly authorized.
| Registrant | HUFFY CORPORATION |
| /s/ Robert W. Lafferty | |
| Date: July 17, 2001 | By: Robert W. Lafferty Vice President - Finance Chief Financial Officer and Treasurer |
HUFFY
CORPORATION
Corporate Offices
NEWS RELEASE
Contact: Robert W. Lafferty
V.P.- Finance, CFO & Treasurer
(937) 865-5407
HUFFY CORPORATION ANNOUNCES SECOND QUARTER EARNINGS
SECOND QUARTER HIGHLIGHTS
- SECOND QUARTER EARNINGS IN LINE WITH EXPECTATIONS
- SALES AND EARNINGS IMPACTED BY SOFTNESS IN ECONOMY
- OFFER MADE FOR CYCLING ASSETS OF SCHWINN/GT
MIAMISBURG, OHIO, JULY 17, 2001 - HUFFY CORPORATION (NYSE-HUF) today announced that net earnings for the second quarter were $0.8 million or $0.07 per common share, versus net earnings of $4.5 million or $0.44 per common share for the second quarter of 2000. Net earnings in the second quarter of 2000 included a pre-tax charge for restructuring and refinancing charges of $1.3 million, or $0.08 per common share as well as earnings from discontinued operations of $3.9 million or $0.38 per common share. Earnings from continuing operations for the second quarter of 2001 were $0.8 million or $0.07 per common share, compared to earnings for the same period last year, of $0.6 million or $0.06 per common share.
For the six month period ended June 30, 2001 net earnings were $1.8 million or $0.17 per common share versus earnings of $3.4 million or $0.33 per common share for the same period in 2000. Net earnings in the first half of 2000 included restructuring and refinancing charges of $2.4 million, or $0.24 per common share, earnings from discontinued operations of $4.7 million or $0.46 per common share and an extraordinary charge of $0.8 million or $0.08 per common share. Earnings from continuing operations for the six-month period ended June 30, 2001 were $1.8 million or $0.17 per common share, compared to a loss of $0.5 million or $0.05 per common share for the same period in 2000.
- more -
Net sales from continuing operations for the second quarter of 2001 were $86.9 million compared to sales of $122.0 million for the second quarter of 2000, a decrease of 28.8%. For the first six months of 2001, net sales from continuing operations were $168.1 million compared to sales of $222.1 million for the same period of 2000, a decrease of 24.3%. Gross margins for the second quarter were 13.9%, virtually identical to gross margins reported of 14.0% for the second quarter of 2000. On a year to date basis, corporate wide gross margins from continuing operations were 14.1%, essentially flat when compared to gross margins of 14.3% for the first six months of 2000.
In commenting on results for the second quarter, Don Graber, Chairman, President and CEO said, "We had anticipated that first half of 2001 could be challenging. The overall economy and the retail environment continue to be a challenge. As anticipated, second quarter sales have been well below expectations and last year. In the bicycle business, overall units are down compared to last year and a higher percentage of the bicycles sold are at opening price points. Lower priced bicycles tend to be those with lower margins. As retailers continue to focus on cost controls, sales in the service business are also running behind last year. There have been a few bright spots. The basketball backboard business had a good second quarter with sales running almost 18% ahead of last year."
"While we are disappointed in the slowness of the economic recovery and the weakness of the retail environment, our current business model has clearly helped to mitigate the impact of the softness in the economy. Had Huffy remained a U.S. based manufacturer, we would not have been able to hold margins essentially flat with a 24% drop in revenue. At this point, we do not expect to see the economy recover and a return to normalcy in the retail environment until 2002 and expect continued challenges on the revenue line. With a continuing emphasis on cost control and strong focus on cash generation, our balance sheet remains strong, with cash and short-term investments of $16.9 million."
Graber concluded by saying, "The third quarter could be both challenging and exciting. The focus on exploring a variety of strategic alternatives to enhance earnings and maximize value for our shareholders remains a key priority. We are pleased that the Board of Schwinn/GT Corp has accepted our offer to purchase the assets of the Schwinn/GT cycling business, and we will be following the actions of the Bankruptcy Court in Denver with great interest. The Schwinn/GT cycling business would be an excellent strategic fit within our existing bicycle business model. We will continue to work with our external financial advisors as we evaluate additional alternatives."
Huffy Corporation (NYSE-HUF) is a leading provider of consumer and retail services and the leading supplier of bicycles and home basketball equipment.
# # #
The discussion in this press release contains forward-looking statements and is qualified by the cautionary statements contained in the Company's report on Form 10-K, dated March 6, 2001.
- Table to follow -
| HUFFY CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (Dollars in thousands, except per share data) | ||||||||
| Quarter Ended | Six Months Ended | |||||||
| June 30, | June 30, | |||||||
| 2001 | 2000 | 2001 | 2000 | |||||
| Net sales | $86,864 | $122,029 | $168,107 | $222,097 | ||||
| Gross profit | 12,077 | 17,064 | 23,712 | 31,826 | ||||
| % to net sales | 13.9% | 14.0% | 14.1% | 14.3% | ||||
| Selling, general and administrative expenses | 11,089 | 11,601 | 21,132 | 24,496 | ||||
| Plant closure & manufacturing reconfiguration | -- | 1,610 | -- | 3,328 | ||||
| Operating income | 988 | 3,853 | 2,580 | 4,002 | ||||
| Other expense | ||||||||
| Interest expense, net | 86 | 2,538 | 492 | 4,507 | ||||
| Other | (337) | (124) | (754) | (136) | ||||
| (251) | 2,414 | (262) | 4,371 | |||||
| Earnings (loss) before income taxes | 1,239 | 1,439 | 2,842 | (369) | ||||
| Income tax expense (benefit) | 471 | 803 | 1,080 | 116 | ||||
| Net earnings(loss) from continuing operations | 768 | 636 | 1,762 | (485) | ||||
| Discontinued operations: | ||||||||
| Income (loss) from discontinued operations, net of income tax expense of $1,962 and $2,470. | -- | 3,875 | -- | 4,704 | ||||
| Net earnings (loss) before extraordinary item | $768 | $4,511 | $1,762 | $4,219 | ||||
| Extraordinary earnings (loss), net of income tax benefit ($519) | -- | -- | -- | (848) | ||||
| Net earnings (loss) | $768 | $4,511 | $1,762 | $3,371 | ||||
| Earnings per common share: | ||||||||
| Weighted average number of common shares | 10,502,865 | 10,265,031 | 10,491,116 | 10,253,238 | |||
| DILUTED: | |||||||
| Earnings (loss) from operations | $0.07 | $0.14 | $0.17 | $0.19 | |||
| Earnings (loss) from reorganization and refinancing | -- | ($0.08) | -- | ($0.24) | |||
| Earnings (loss) from continuing operations | $0.07 | $0.06 | $0.17 | ($0.05) | |||
| Earnings (loss) from discontinued operations | -- | $0.38 | -- | $0.46 | |||
| Earnings (loss) from extraordinary charges | -- | -- | -- | ($0.08) | |||
| Net earnings (loss) per common share | $0.07 | $0.44 | $0.17 | $0.33 | |||
| BALANCE SHEET HIGHLIGHTS (Dollars in thousands, except per share data) | |||||||
| June 30, | December 31, | June 30, | |||||
| 2001 | 2000 | 2000 | |||||
| Cash and cash equivalents | $ 16,948 | $ 4,334 | $ 1,887 | ||||
| Receivables, net | 47,273 | 79,811 | 78,083 | ||||
| Inventories | 35,654 | 43,324 | 30,498 | ||||
| Prepaid expenses and other expenses | 27,607 | 28,344 | 33,431 | ||||
| Net assets of discontinued operations | -- | -- | 43,360 | ||||
| Total current assets | 127,482 | 155,813 | 187,259 | ||||
| Property, plant and equipment, net | 11,846 | 12,680 | 18,210 | ||||
| Intangibles and others | 13,199 | 12,000 | 28,633 | ||||
| Total assets | $152,527 | $180,493 | $234,102 | ||||
| Notes payable and current portion | |||||||
| of long-term debt | $ -- | $17,656 | $94,683 | ||||
| Accounts payable and accruals | 54,125 | 63,736 | 67,397 | ||||
| Income taxes and other | 6,410 | 8,278 | 9,322 | ||||
| Total current liabilities | 60,535 | 89,670 | 171,402 | ||||
| Long-term debt | -- | -- | -- | ||||
| Other liabilities | 17,142 | 17,692 | 21,624 | ||||
| Shareholders' equity | 74,850 | 73,131 | 41,076 | ||||
| Total liabilities and shareholders' equity | $152,527 | $180,493 | $234,102 | ||||
| Equity per common share outstanding | $7.28 | $7.15 | $4.03 | ||||
| Working capital ratio | 2.1 | 1.7 | 1.1 | ||||
