1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
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QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED April 30, 1997 COMMISSION FILE NUMBER 1-9235
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THOR INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 93-0768752
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
419 West Pike Street, Jackson Center, OH 45334-0629
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (937) 596-6849
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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
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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 4/30/97
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Common stock, par value 8,143,489 shares
$.10 per share
2
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AS RESTATED, SEE NOTE #4)
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ASSETS
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(UNAUDITED)
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APRIL 30, 1997 JULY 31, 1996
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Current assets:
Cash and cash equivalents $ 9,452,737 $ 12,737,778
Accounts receivable:
Trade 49,629,086 48,147,482
Other 894,955 811,173
Inventories 55,781,237 62,566,455
Prepaid expenses 3,790,487 3,706,461
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Total current assets 119,548,502 127,969,349
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Property:
Land 1,251,045 1,212,024
Buildings and improvements 12,313,276 11,978,857
Machinery and equipment 14,735,127 15,182,013
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Total cost 28,299,448 28,372,894
Accumulated depreciation and amortization 11,838,197 11,167,142
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Property, net 16,461,251 17,205,752
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Other assets:
Goodwill 14,697,547 15,175,617
Non compete 4,190,792 4,912,964
Trademarks 2,614,831 2,858,835
Investment Joint Ventures 3,263,443 3,565,742
Dealer Network 13,578 137,328
Organization Costs 221,669 299,028
Notes Receivable 529,051 553,841
Other 1,366,146 1,139,429
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Total other assets 26,897,057 28,642,784
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TOTAL ASSETS $ 162,906,810 $ 173,817,885
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts payable $ 30,461,205 $ 27,901,604
Line of Credit -- 6,515,000
Accrued liabilities:
Taxes 244,918 --
Compensation and related items 8,068,847 11,704,885
Product warranties 6,622,171 6,345,670
Other 2,095,307 1,739,731
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Total current liabilities 47,492,448 54,206,890
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Other liabilities 1,002,958 1,672,041
Stockholders' equity:
Common stock - authorized 10,000,000 shares;
issued 9,099,247 shares @ 4/30/97 and 9,099,247
shares @ 7/31/96; par value of $.10 per share 909,925 909,925
Additional paid in capital 25,105,120 25,105,120
Foreign currency translation (698,714) (641,856)
Retained earnings 108,471,321 98,380,961
Cost of treasury shares 955,758 shares @ 4/30/97;
412,439 shares @ 7/31/96 (19,376,248) (5,815,196)
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Total stockholders' equity 114,411,404 117,938,954
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 162,906,810 $ 173,817,885
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See notes to consolidated financial statements
3
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED APRIL 30, 1997 AND 1996
(AS RESTATED, SEE NOTE #4)
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THREE MONTHS ENDED APRIL 30 NINE MONTHS ENDED APRIL 30
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1997 1996 1997 1996
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Net sales $169,329,069 $169,174,078 $443,350,957 $440,474,240
Cost of products sold 151,534,423 151,658,953 397,957,672 394,547,809
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Gross profit 17,794,646 17,515,125 45,393,285 45,926,431
Selling, general, and
administrative expenses 9,788,763 10,188,531 25,425,562 27,085,403
Amortization - Intangibles 522,626 716,374 1,592,877 2,149,123
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Operating income 7,483,257 6,610,220 18,374,846 16,691,905
Interest income 173,049 192,097 608,068 688,669
Interest expense (86,170) (171,389) (608,103) (421,480)
Other expense (180,176) (118,182) (10,978) (27,005)
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Income before income taxes 7,389,960 6,512,746 18,363,833 16,932,089
Provision for income taxes 3,032,136 2,685,712 7,524,259 7,001,884
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Net income $4,357,824 $3,827,034 $10,839,574 $9,930,205
============= ============= ============= =============
Average common shares outstanding 8,143,489 8,758,944 8,360,174 8,850,910
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Earnings per common share $.54 $.44 $1.30 $1.12
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Dividends paid per common share $.03 $.03 $.09 $.09
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See notes to consolidated financial statements
4
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 1997 AND 1996
(AS RESTATED, SEE NOTE #4)
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(UNAUDITED)
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1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $10,839,574 $9,930,205
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 1,775,249 1,690,328
Amortization 1,592,877 2,149,123
Changes in non cash assets and liabilities
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Accounts receivable (1,565,386) (9,933,741)
Inventories 6,785,218 1,238,368
Prepaid expenses and other (8,535) (789,322)
Accounts payable 2,559,601 2,667,777
Accrued liabilities (3,428,126) (3,173,137)
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Net cash provided by operating activities 18,550,472 3,779,601
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant & equipment (1,255,188) (3,322,370)
Disposals of property, plant & equipment 301,799 33,632
Investment in leasing joint venture -- (2,300,000)
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Net cash used in investing activities (953,389) (5,588,738)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (749,214) (800,280)
Net proceeds from (payments of) notes payable (6,515,000) 3,300,000
Purchase of treasury stock (13,561,052) (3,890,737)
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Net cash used in financing activities (20,825,266) (1,391,017)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (56,858) 121,616
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Net decrease in cash and equivalents (3,285,041) (3,078,538)
Cash and equivalents, beginning of year 12,737,778 6,820,796
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CASH AND EQUIVALENTS, END OF PERIOD $9,452,737 $3,742,258
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SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $6,830,459 $7,283,250
Interest paid 608,103 421,480
See notes to consolidated financial statements
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AS RESTATED, SEE NOTE #4)
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1. The accompanying consolidated financial statements, which are unaudited,
reflect all adjustments consisting of only normal recurring adjustments,
which are, in the opinion of management, necessary to present fairly the
consolidated operating results for such unaudited periods.
2. Major classifications of inventories as restated are:
(Unaudited)
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April 30, 1997 July 31, 1996
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Raw materials $36,811,772 $46,254,841
Work in process 12,069,629 12,400,652
Finished goods 10,121,038 6,529,164
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Total 59,002,439 65,184,657
Less excess of FIFO costs
over LIFO costs 3,221,202 2,618,202
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Total inventories $55,781,237 $62,566,455
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3. In February 1997, the FASB issued SFAS No. 128 "Earnings per Share". This
Statement modifies the standards for computing earnings per share and
replaces the presentation of primary earnings per share (EPS) with a
presentation of basic EPS. The Statement is effective for financial
statements issued after December 15, 1997. The Corporation has not adopted
SFAS 128 in its April 30, 1997 consolidated financial statements and has
not yet determined what effect its adoption will have on subsequently
filed consolidated financial statements.
4. During April 1998, the Company's management determined that the accounting
records at the General Coach - Brown City location were incorrectly stated
for all periods subsequent to July 31, 1995. The balances specifically
affected were cash, accounts receivable, inventory, other accrued
liabilities, cost of products sold and the provision for taxes. As a
result, the Company's financial statements as of April 30, 1997 and July
31, 1996 and for the three and nine months ended April 30, 1997 and April
30, 1996 have been restated from the amounts previously reported to
correct the cash, accounts receivable, inventory, other accrued
liabilities, and its related effect on earnings.
The effects of the restatement are as follows:
Three Months Ended April 30, 1997 Three Months Ended April 30, 1996
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As Previously As As Previously As
Reported Restated Reported Restated
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Net Sales $169,329,069 $169,329,069 $169,174,078 $169,174,078
Cost of Products Sold 151,109,882 151,534,423 151,361,505 151,658,953
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Gross Profit 18,219,187 17,794,646 17,812,573 17,515,125
Selling General and
Administrative Exp. 10,311,389 10,311,389 10,904,905 10,904,905
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Operating Income 7,907,798 7,483,257 6,907,668 6,610,220
Other Income(Expense) (93,297) (93,297) (97,474) (97,474)
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Income before Tax 7,814,501 7,389,960 6,810,194 6,512,746
Provision for Taxes 3,204,500 3,032,136 2,807,666 2,685,712
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Net Income $4,610,001 $4,357,824 $4,002,528 $3,827,034
============= ============= ============= =============
Earnings Per
Common Share $.57 $.54 $.46 $.44
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6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AS RESTATED, SEE NOTE #4)
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The effects of the restatement are as follows (Continued):
Nine Months Ended April 30, 1997 Nine Months Ended April 30, 1996
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As Previously As As Previously As
Reported Restated Reported Restated
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Net Sales $443,350,957 $443,350,957 $440,474,240 $440,474,240
Cost of Product Sold 396,434,570 397,957,672 393,786,759 394,547,809
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Gross Profit 46,916,387 45,393,285 46,687,481 45,926,431
Selling General and
Administrative Exp 27,018,439 27,018,439 29,234,526 29,234,526
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Operating Income 19,897,948 18,374,846 17,452,955 16,691,905
Other Income(Expense) (11,013) (11,013) 240,184 240,184
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Income before Tax 19,886,935 18,363,833 17,693,139 16,932,089
Provision for Taxes 8,142,638 7,524,259 7,313,915 7,001,884
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Net Income $11,744,297 $10,839,574 $10,379,224 $9,930,205
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Earnings Per
Common Share $1.40 $1.30 $1.17 $1.12
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April 30, 1997 July 31, 1996
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As Previously As As Previously As
Reported Restated Reported Restated
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Cash & Cash Equivalents $10,187,923 $9,452,737 $13,061,981 $12,737,778
Accounts Receivable 50,906,526 49,629,086 48,962,786 48,147,482
Other Receivables 894,955 894,955 811,173 811,173
Inventories 57,358,289 55,781,237 63,493,523 62,566,455
Prepaid Exp. & Other 3,790,487 3,790,487 3,706,461 3,706,461
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Total Current Assets 123,138,180 119,548,502 130,035,924 127,969,349
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Property, Plant & Eq.(Net) 16,461,251 16,461,251 17,205,752 17,205,752
Other Assets 26,897,057 26,897,057 28,642,784 28,642,784
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Total Assets 166,496,488 162,906,810 175,884,460 173,817,885
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Accounts Payable 30,461,205 30,461,205 27,901,604 27,901,604
Line of Credit 0 0 6,515,000 6,515,000
Accrued Liabilities 18,496,919 17,031,243 20,637,582 19,790,286
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Total Current Liabilities 48,958,124 47,492,448 55,054,186 54,206,890
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Other liabilities 1,002,958 1,002,958 1,672,041 1,672,041
Total stockholders' equity 116,535,406 114,411,404 119,158,233 117,938,954
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Total Liabilities & Equity $166,496,488 $162,906,810 $175,884,460 $173,817,885
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7
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(AS RESTATED, SEE NOTE #4)
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Quarter Ended April 30, 1997 vs. Quarter Ended April 30, 1996
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Net sales for the third quarter totaled $169,329,069 versus $169,174,078 in the
same period last year. Income before income taxes was $7,389,960 compared to
$6,512,746 in the same period last year. This increase was primarily due to
reduction in selling, general and administrative expenses, and amortization of
intangibles. In general, the Company did not adjust its sales prices during the
third quarter of fiscal 1997. Recreation vehicle revenues of $136,070,277 were
4.9% lower than last year and were 80.4% of total company revenues compared to
84.6% last year. Bus revenues of $33,258,792 were 27.7% higher than last year
and were 19.6% of total company revenues compared to 15.4% last year.
Manufacturing gross profit was 10.5% of sales compared to 10.4% last year.
Operating income totaled $7,483,257 up 13.2% from $6,610,220 in the same period
last year. Selling, general and administrative expenses and amortization of
intangibles decreased to $10,311,389, 6.1% of sales, from $10,904,905, 6.4% of
sales. Interest income decreased by $19,048 and interest expense decreased by
$85,219. The combined income tax rate was 41.0% compared to 41.2% last year.
Nine Months Ended April 30, 1997 vs. Nine Months Ended April 30, 1996
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Net sales for the nine months totaled $443,350,957, up .7% from $440,474,240 in
the same period last year. Income before income taxes was $18,363,833 compared
to $16,932,089 in the same period last year. This increase was due primarily to
reduction in selling, general and administrative expenses and amortization of
intangibles. Recreation vehicle revenues of $342,462,345 were 5.8% lower than
last year and were 77.2% of total company revenues compared to 82.6% last year.
Bus revenues of $100,888,612 were 31.4% higher than last year and were 22.8% of
total company revenues compared to 17.4% last year. Manufacturing gross profit
was 10.2% of sales compared to 10.4% last year.
Operating income totaled $18,374,846, up 10.1% from $16,691,905 in the same
period last year. Selling, general and administrative expenses and amortization
of intangibles decreased to $27,018,439, 6.1% of sales, from $29,234,526, 6.6%
of sales. An adjustment to deferred compensation in the first quarter of fiscal
1997 accounted for $669,000 reduction in administrative expense. Interest income
decreased by $80,601 and interest expense increased by $186,623. This increase
in interest expense was due primarily to additional borrowings for the purchase
of 543,319 shares of treasury stock. The combined income tax rate was 41.0%
compared to 41.4% last year.
Financial Condition and Liquidity
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As of April 30, 1997, Thor had $9,452,737 in cash and cash equivalents, compared
to $12,737,778 on July 31, 1996. Working capital at April 30, 1997 was
$72,056,054 compared to $73,762,459 at July 31, 1996. Inventory valued at
current cost at April 30, 1997 exceeded the LIFO inventory by $3,221,202.
On April 30, 1997, the Company had a $30,000,000 revolving line of credit with
Harris Trust and Savings Bank and Bank One. There were no borrowings at April
30, 1997. The loan agreement contains certain covenants, including restrictions
on additional indebtedness, and the Company must maintain certain financial
ratios. The line of credit bears interest at negotiated rates below prime and
expires on November 30, 1997. The Company had no long term debt as of April 30,
1997. Amortization of intangibles decreased from $2,149,123 through April 30,
1996 to $1,592,877 through April 30, 1997 due to certain intangibles being fully
amortized.
During the nine months of fiscal 1997, Thor purchased 543,319 shares of its
common stock, increasing treasury stock by $13,561,052.
The Company believes internally generated funds and the revolving credit
agreement already in place will be sufficient to meet current operating needs
and anticipated capital requirements. The Company does not anticipate
significant capital expenditures for fiscal 1997.
8
PART II
No Reports
SIGNATURES
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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.
THOR INDUSTRIES, INC.
(Registrant)
DATE June 9, 1998 /s/ Wade F. B. Thompson
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Wade F. B. Thompson
Chairman of the Board, President
and Chief Executive Officer
DATE June 9, 1998 /s/ Walter L. Bennett
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Walter L. Bennett
Senior Vice President
Secretary (Chief Accounting Officer)