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: January 31, 1998
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 of other jurisdiction of incorporation)
43-0985160
(I.R.S. Employer Identification Number)
15 Compound Drive
Hutchinson, Kansas 67502-4349
(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 7,582,181
Class Outstanding at February 25, 1998
COLLINS INDUSTRIES, INC. AND SUBSIDIARIES
FORM 10-Q
JANUARY 31, 1998
INDEX
PART I. FINANCIAL INFORMATION PAGE NO
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets
January 31, 1998 and October 31, l997 3
Consolidated Condensed Statements of Income -
Three Months Ended January 31, 1998 and 1997 4
Consolidated Condensed Statements of Cash Flow -
Three Months Ended January 31, 1998 and 1997 5
Notes to Consolidated Condensed Financial Statements 6
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
January,31 October,31
1998 1997
(Unaudited)
ASSETS
Current Assets:
Cash $ 511,839 $ 189,152
Receivables, trade & other, net 8,247,787 6,745,973
Inventories, lower of cost (FIFO) 24,303,230 25,686,022
Prepaid expenses and other current 773,265 1,380,998
assets
Total current assets 33,836,121 34,002,145
Property and equipment, at cost 33,820,586 32,232,490
Less: accumulated depreciation 20,121,283 19,800,671
Net property and equipment 13,699,303 12,431,819
Other assets 954,447 729,166
Total assets $48,489,871 $47,163,130
LIABILITIES & SHAREHOLDERS' INVESTMENT
Current liabilities:
Current maturities of long-term
debt & capitalized leases $1,040,819 $1,094,948
Accounts payable 11,788,600 14,200,975
Accrued expenses 3,043,942 3,663,382
Total current liabilities 15,873,361 18,959,305
Long-term debt and capitalized lease 13,388,645 8,361,887
Shareholders' investment:
Common stock 757,138 738,568
Paid-in capital 18,857,962 18,918,903
Retained earnings (deficit) (387,235) 184,467
Total shareholders' investment 19,227,865 19,841,938
Total liabilities & shareholder's $48,489,871 $47,163,130
investment
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
January 31,
1998 1997
Sales $38,480,622 $35,280,611
Cost of sales 33,435,940 30,214,276
Gross profit 5,044,682 5,066,335
Selling, general and administrative
expenses 3,820,458 3,705,519
Income from operations 1,224,224 1,360,816
Other income (expense):
Interest, net (386,629) (464,300)
Other, net 80,229 116,392
(306,400) (347,908)
Income before income taxes 917,824 1,012,908
Provision for income taxes 320,000 0
Net income $ 597,824 $ 1,012,908
Earnings per share:
Basic $ .08 $ 0.14
Diluted $ .08 $ 0.13
Weighted average common and common
equivalent shares outstanding
Basic 7,452,847 7,303,657
Diluted 7,903,702 7,769,171
(See accompanying notes)
Collins Industries, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(Unaudited)
Three Months Ended
January 31,
1998 1997
Cash flow from operations:
Cash received from customers $36,978,808 $37,210,954
Cash paid to suppliers and employees (38,164,207) (37,114,198)
Interest paid (347,935) (600,058)
Cash used in operations (1,533,334) (503,302)
Cash flow from investing activities:
Capital expenditures (1,588,096) (313,578)
Other,net (316,616) (3,458)
Cash used in investing activities (1,904,712) (317,036)
Cash flow from financing activities:
Net increase in other borrowings 5,261,678 1,579,831
Principal payments of long-term debt
and capitalized leases (289,049) (294,402)
Proceeds from exercise of stock options 65,629 60,325
Acquisition and retirement of
treasury stock (108,000) (538,200)
Payment of dividends (1,169,525) 0
Cash provided by financing activities 3,760,733 807,554
Net increase (decrease) in cash 322,687 (12,784)
Cash at beginning of period 189,152 255,405
Cash at end of period $ 511,839 $ 242,621
Reconciliation of net income to net cash
used in operations:
Net income $ 597,824 $ 1,012,908
Depreciation and amortization 411,946 427,954
Decrease (increase) in receivables (1,501,814) 1,930,343
Decrease (increase) in inventories 1,382,792 (1,343,083)
Decrease (increase) in prepaid expenses
and other current asset 607,733 (299,446)
Decrease in accounts payable and
accrued expenses (3,031,815) (2,231,978)
Cash used in operations $(1,533,334) $ (503,302)
(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 those 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 at January
31, 1998 and October 31, 1997 and results of its operations and
its cash flows for the three months ended January 31, 1998 and
1997.
The Company suggests that the unaudited Consolidated Condensed
Financial Statements for the three months ended January 31, 1998
be read in conjunction with the Company's Annual Report for the
year ended October 31, 1997.
(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 January 31, 1998 and October
31, 1997, consisted of the following:
January 31, October 31,
1998 1997
Chassis $ 6,692,530 $ 7,675,115
Raw materials & components 9,742,770 8,673,308
Work in process 3,652,821 4,173,173
Finished goods 4,215,109 5,164,426
$24,303,230 $25,686,022
(3) 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.
(4) Contingencies and Litigation
At January 31, 1998 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.
(5) Income Taxes
The provision for income taxes for three months ended January 31,
1998 is calculated at statutory rates. The Company had no income
tax expense for the three months ended January 31, 1997 due to
the utilization of net operating loss carryforwards and general
business tax credits.
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS:
Net Sales
Sales for the quarter ended January 31, 1998 were $38.5 million
or 9% higher than the $35.3 million in net sales for the quarter
ended January 31, 1997. This increase was principally due to
higher sales of bus products.
The Company's consolidated sales backlog at January 31, 1998 was
$44.4 million compared to $45.5 million at October 31, 1997 and
$43.3 at January 31, 1997.
Cost of Sales
The Company's cost of sales for the quarter ended January 31,
1998 was $33.4 million or 86.9% of sales compared to $30.2
million or 85.6% of sales for the quarter ended January 31, 1997.
The percentage increase was principally due to higher sales
incentives on closing out 1997 models in the first quarter of
fiscal 1998 over that of the same period last year.
Selling, General & Administrative Expenses
Changes in selling, general & administrative expenses between the
quarters ended January 31, 1998 and 1997 were not material.
Other Income (Expense)
Interest expense decreased principally as a result of the
Company's overall reduction of its outstanding interest-bearing
debt.
Income Taxes
The Company's income tax expense of $.3 million ($.04 per share)
for the quarter ended January 31, 1998 is calculated based on
statutory income tax rates. The Company had no income tax
expense for the quarter ended January 31, 1997 due to the
utilization of net operating loss carryforwards and general
business tax credits. All carryforwards of net operating losses
and tax credits were utilized in the fiscal year ended October
31, 1997. Accordingly, the Company expects future income tax
provisions to be based on statutory income tax rates.
Net Earnings
The Company's net earnings were $.6 million ($.08 per share) for
the quarter ended January 31, 1998 compared to $1.0 million
($.14 per share) for the quarter ended January 31, 1997. The
decrease in the Company's net earnings was principally attributable
to income tax expense for the quarter ended January 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES:
The Company used existing credit lines, internally generated
funds and supplier financing and financing from issuance of
Industrial Revenue Bonds to fund its operations and capital
expenditures for the quarter ended January 31, 1998.
Cash used in operations was $1.5 million for the quarter ended
January 31, 1998 compared to $.5 million for quarter ended
January 31, 1997. Cash used in operations principally resulted
from the Company's reductions of accounts payable and accrued
expenses during the quarter ended January 31, 1998.
Cash used in investing activities was $1.9 million for the
quarter ended January 31, 1998 compared to $.3 million for the
quarter ended January 31, 1997. The increase was principally due
to higher capital expenditures for the expansion of the Company's
bus manufacturing facilities.
Cash flow provided by financing activities was $3.8 million for
the quarter ended January 31, 1998 compared to $.8 million for
the quarter ended January 31, 1997. This change principally
resulted from increases in borrowings in the quarter ended
January 31, 1998. This increase was partially offset by the
payments of two cash dividends totaling $1.2 million. The
Company paid a regular quarterly cash dividend of $.025 per share
in December, 1997 and paid a special cash dividend of $.13 per
share in January, 1998.
The Company believes that its cash flows from operations and bank
credit lines will be sufficient to satisfy its future working
capital and capital expenditure requirements.
In December, 1997 the Company entered into a capitalized lease
agreement with the City of South Hutchinson, Kansas for the
issuance of $3.5 million of 1997 Industrial Revenue Bonds. The
Bonds bear interest at rates ranging from 4.75% to 5.80% and
mature serially over a period of ten years. The proceeds of the
Bonds will be used to construct and equip an addition to the
Company's bus manufacturing facilities. As of January 31, 1998,
unused net proceeds from the Bonds were $2.5 million. Except as
previously noted, at January 31, 1998 there were no other
significant or unusual contractual commitments or capital
expenditure commitments.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Except for the historical information contained herein, certain
matters discussed in this Form 10-Q are forward-looking
statements which involve risks and uncertainties, including but
not limited to economic, competitive, governmental and
technological factors affecting the Company's operations,
markets, products, services, prices and other factors.
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 - No reports on Form 8-K were filed
during the quarter ended January 31, 1998.
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 March 5, 1998 /s/ Larry W. Sayre
LARRY W. SAYRE
VICE PRESIDENT - FINANCE AND
CHIEF FINANCIAL OFFICER
(Principal Accounting Officer)