UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: July 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ___________
Commission file number 0-12619
Collins Industries, Inc.
(Exact name of registrant as specified in its charter)
Missouri
(State or other jurisdiction of incorporation)
43-0985160
(I.R.S. Employer Identification Number)
421 East 30th Avenue Hutchinson, Kansas 67502-2489
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code 316-663-5551
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:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Common Stock, $.10 par value 7,351,065
Class Outstanding at September 03, 1997
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
JULY 31, 1997
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
July 31, 1997 and October 31, l996 3
Consolidated Condensed Statements of Income -
Three and Nine months Ended July 31, 1997
and 1996 4
Consolidated Condensed Statements of Cash Flow -
Nine months Ended July 31, 1997 and 1996 5
Notes to Consolidated Condensed Financial
Statements 6
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1-6 12
SIGNATURES 14
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
July 31, October 31,
1997 1996
(Unaudited)
ASSETS
Current assets:
Cash $ 226,374 $ 255,405
Receivables, trade and other, net 7,096,930 8,310,009
Inventories, lower of cost or
market (Note 2) 25,855,427 23,615,159
Prepaid expenses and other current assets 484,527 459,275
Total current assets 33,663,258 32,639,848
Property and equipment, at cost: 34,120,273 34,610,370
Less: accumulated depreciation 22,019,502 22,573,220
Net property and equipment 12,100,771 12,037,150
Other assets 823,541 1,067,454
Total assets $46,587,570 $45,744,452
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt and capitalized leases $ 1,106,359 $ 1,125,842
Accounts payable 14,228,707 13,729,044
Accrued expenses 3,433,894 3,580,731
Total current liabilities 18,768,960 18,435,617
Long-term debt, less current maturities 8,916,188 12,827,409
Long-term capitalized leases, less
current maturities 272,351 590,601
Shareholders' investment:
Common stock, $.10 par value 729,979 727,411
Paid-in capital 18,653,018 19,701,491
Retained deficit (752,926) (6,505,077)
18,630,071 13,923,825
Less - Treasury stock, at cost 0 (33,000)
Total shareholders' investment 18,630,071 13,890,825
Total liabilities &
shareholders' investment $46,587,570 $45,744,452
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Nine Months
Ended Ended
July 31, July 31,
1997 1996 1997 1996
Sales $42,202,842 $40,180,332 $118,895,578 $110,226,714
Cost of sales (Note 3) 34,226,943 34,174,297 98,842,817 93,931,834
Gross profit 7,975,899 6,006,035 20,052,761 16,294,880
Selling, general and
administrative expenses 3,842,542 3,605,756 11,327,941 10,728,885
Income from operations 4,133,357 2,400,279 8,724,820 5,565,995
Other income (expense):
Interest expense (378,616) (542,843) (1,290,950) (1,782,648)
Other, net 18,101 107,815 187,533 252,228
(360,515) (435,028) (1,103,417) (1,530,420)
Income before provision
for income taxes 3,772,842 1,965,251 7,621,403 4,035,575
Provision for
income taxes (700,000) 0 (1,500,000) 0
Net income $ 3,072,842 $ 1,965,251 $ 7,621,403 $ 4,035,575
Earnings per share (Note 4):
Net income per common and
common equivalent share $ .39 $ .25 $ .79 $ .53
Dividends per share $.025 $ 0 $ .05 $ 0
Average outstanding
common and common
equivalent shares 7,817,795 7,826,589 7,757,506 7,545,406
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Nine Months Ended
July 31,
1997 1996
Cash flow from operations:
Cash received from customers $120,108,657 $110,132,756
Cash paid to suppliers and
employees (110,286,303 (102,788,210)
Interest paid (1,406,836) (1,930,296)
Income taxes paid (1,645,000) 0
Cash provided by operations 6,770,518 5,414,250
Cash flow from investing activities:
Capital expenditures (1,055,140) (662,864)
Proceeds from sale of equipment 16,500 668,038
Other, net (82,141) (148,618)
Cash used in investing activities (1,120,781) (143,444)
Cash flow from financing activities:
Net reduction in other borrowings (1,032,801) (4,224,736)
Principal payments of long-term debt
and capitalized leases (3,216,153) (1,659,495)
Proceeds from exercise of stock options 118,450 0
Retirement of common stock (260,825) 0
Acquisition of treasury stock (918,188) 0
Payment of dividends (369,251) 0
Cash used in financing activities (5,678,768) (5,884,231)
Net decrease in cash (29,031) (613,425)
Cash at beginning of period 255,405 842,953
Cash at end of period $ 226,374 $ 229,528
Reconciliation of net income to cash provided by operations:
Net income $ 6,121,403 $ 4,035,575
Depreciation and amortization 1,358,014 1,561,665
Common stock issued for benefit
of employees 0 90,000
Decrease (increase) in receivables 1,213,079 (93,958)
Decrease (increase) in inventories (2,240,268) 2,184,327
Increase in prepaid expenses and
other current assets (25,252) (126,738)
Increase (decrease) in accounts
payable and accrued expenses 352,826 (2,200,186)
Gain on sale of equipment (9,284) (36,435)
Cash provided by operations $ 6,770,518 $ 5,414,250
(See accompanying notes)
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
(Unaudited)
(1) General
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from these estimates.
In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring items)
necessary to summarize fairly the Company's financial
position and results of operations for the three and nine
months ended July 31, 1997 and 1996, and the cash flows for
the nine months ended July 31, 1997 and 1996.
The Company suggests that the unaudited Consolidated
Condensed Financial Statements for the three and nine months
ended July 31, 1997 be read in conjunction with the Company's
Annual Report for the year ended October 31, 1996.
(2) Inventories
Inventories, which include material, labor and manufacturing
overhead, are stated at the lower of cost (FIFO) or market.
Major classes of inventories as of July 31, 1997 and October 31,
1996 consisted of the following:
July 31, October 31,
1997 1996
Chassis $ 7,131,404 $ 6,466,570
Raw materials & components 9,341,947 8,867,477
Work in process 3,753,082 3,061,276
Finished goods 5,628,994 5,219,836
$25,855,427 $23,615,159
(3) Cost of Sales
Cost of sales for the three and nine months ended July 31,
1997 have been reduced by the $1.2 million gain from the sale
of the Company's UVL product line which was completed in May,
1997.
(4) Earnings per Share
The computation of earnings per share is based on the
weighted average number of outstanding common shares during
the period plus common stock equivalents consisting of
certain shares subject to stock options.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting (SFAS) No. 128,
"Earnings per Share." The new standard simplifies the
computation of earnings per share (EPS) and increases the
comparability to international standards. Under SFAS No. 128
primary EPS is replaced by "Basic" EPS, which excludes
dilution and is computed by dividing income available to
common shareholders by the weighted-average number of common
shares outstanding for the period. "Diluted" EPS, which is
computed similarly to fully diluted EPS, reflects the
potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted
into common stock.
SFAS No. 128 is effective December 15, 1997 and does not
allow for early adoption. Upon adoption, all prior-period
EPS information (including interim EPS) is required to be
restated. Pro forma EPS, under SFAS No. 128 for each period
presented, are as follows:
Three Months Nine months
Ended Ended
July 31, July 31,
1997 1996 1997 1996
Basic EPS .42 $.27 .83 $.55
Diluted EPS .38 $.25 .78 $.53
(5) Contingencies and Litigation
At July 31, 1997 the Company had contingencies and litigation
pending which arose in the ordinary course of business.
Litigation is subject to many uncertainties and the outcome
of the individual matters is not presently determinable. It
is management's opinion that this litigation would not result
in liabilities that would have a material adverse effect on
the Company's consolidated financial position or results of
operations.
(6) Income Taxes
The primary difference between the Company's effective income
tax rate and provision for income taxes as calculated at the
federal statutory rate is the tax effect of utilizing net
operating loss carryforwards and tax credits.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Net Sales
Sales for the nine months ended July 31, 1997 were $118.9
million compared to $110.2 million for the same period in
fiscal 1996. Sales for the three months ended
July 31, 1997 were $42.2 million compared to $40.2 million
for the same period in fiscal 1996. These increases were
principally due to improved sales of terminal trucks and a
shift in sales mix to ambulance and bus products carrying
higher unit sales prices.
The Company's consolidated sales backlog at July 31, 1997 was
$44.3 million compared to $40.4 million at October 31, 1996
and $50.0 million at July 31, 1996. The July 31, 1996
backlog included a $13.2 million order from the United States
Postal Service which has been completed.
Cost of Sales
Cost of sales for the nine months ended July 31, 1997 was
83.1% of sales compared to 85.2% of sales for the same period
in fiscal 1996. Cost of sales for the three months ended
July 31, 1997 was 81.1% of sales compared to 85.1% for the
same period in fiscal 1996. These percentage decreases were
principally due to better operating results from ambulance
and terminal truck products and a $1.2 million pretax gain
from the sale of the UVL product line.
Selling, General & Administrative Expenses
Selling, general and administrative expenses were $11.3
million or 9.5% of sales for the nine months ended July 31,
1997 compared to $10.7 million or 9.7% of sales for the nine
months ended July 31, 1996. The dollar increase was
principally due to an expansion of the sales force for
ambulance products and costs associated with a new corporate
telemarketing center.
Other Income (Expense)
Interest expense for the nine months ended July 31, 1997 was
$1.3 million compared to $1.8 million for the same period in
fiscal 1996. Interest expense for the three months ended July 31,
1997 was $.4 million compared to $.5 million for the same
period in fiscal 1996. These declines resulted from
reductions in the Company's interest-bearing debt.
Income Taxes
The Company recorded a provision for income taxes of $.7
million, for the three and $1.5 for the nine months ended
July 31, 1997. The primary difference between the Company's
effective income tax rate and the provision for income taxes
calculated at the federal statutory rate is due to the
utilization of net operating losses and tax credits. The
Company's net operating loss and general business tax credit
carryforwards at October 31, 1996 were approximately $1.8
million and $.3 million, respectively.
Net Earnings
The Company's net income was $6.1 million ($.79 per share)
for the nine months ended July 31, 1997 compared to $4.0
million ($.53 per share) for the same period in fiscal 1996.
This improvement was principally due to the improved
operating results in the Company's ambulance and terminal
truck product lines, the $1.2 million pretax gain from the
sale of the UVL product line and decreases in interest
expense associated with reduced borrowings. These
improvements in net income were partially offset by a
provision for income taxes of $1.5 million ($.09 per share)
discussed in the immediately preceding paragraph.
The Company's net income for the quarter ended July 31, 1997
was $3.1 million ($.39 per share) compared to $2.0 million
($.25 per share) for the same period in fiscal 1996. The net
income change is principally due to the same reasons
discussed in the immediately preceding paragraph.
LIQUIDITY AND CAPITAL RESOURCES:
The Company used existing credit lines, internally generated
funds and supplier financing to fund its operations and
capital expenditures for the quarter ended July 31, 1997.
Cash provided by operations was $6.8 million for the nine
months ended July 31, 1997 compared to $5.4 million for the
nine months ended July 31, 1996. Cash provided by operations
principally resulted from the Company's net income ($6.1
million), depreciation ($1.4 million) and a decrease in
accounts receivable ($1.2 million) and was partially offset
by increases in inventories ($2.2 million) during the nine
months ended July 31, 1997 and lower proceeds from the sale
of equipment.
Cash used in investing activities was $1.1 million for the
nine months ended July 31, 1997 compared to $.1 million for
the nine months ended July 31, 1996. The increased use of
cash was principally due to higher capital expenditures and
lower proceeds from the sale of equipment for the nine months
ended July 31, 1997.
Cash used in financing activities was $5.7 million for the
nine months ended July 31, 1997 compared to $5.9 million
for the nine months ended July 31, 1996. The cash used was
for reduction of debt ($4.2 million), the acquisition of
treasury stock ($.9 million), the retirement of common stock
($.3 million) and the payment of dividends ($.4 million) in
the nine months ended July 31, 1997.
The Company paid a quarterly dividend of a $.025 per share on
June 13, 1997. The Company intends to pay regular quarterly
dividends in the future subject to results of operations,
limitations imposed by the Company's loan agreements and
applicable law.
The Company believes that its cash flow from operations and
bank credit lines will be sufficient to satisfy its working
capital and capital expenditure requirements in the immediate
future.
At July 31, 1997 there were no significant or unusual
contractual commitments or capital expenditure commitments.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Not Applicable
Item 2 - Changes in Securities
Not Applicable
Item 3 - Defaults on Senior Securities
Not Applicable
Item 4 - Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5 - Other Information
Not Applicable
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits:
27.0 - EDGAR Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed Forms 8-K, all of which reported
information under Item 5 of Form 8-K, on the following dates:
May 29, 1997
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 thereunto duly
authorized.
COLLINS INDUSTRIES, INC.
(REGISTRANT)
DATE September 9, 1997 /s/Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING OFFICER)