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 October 31, 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 10/31/97
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Common stock, par value 8,145,139 shares
$.10 per share
2
THOR INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(AS RESTATED, SEE NOTE #7)
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ASSETS
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(UNAUDITED)
OCTOBER 31, 1997 JULY 31, 1997
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Current assets:
Cash and cash equivalents $ 19,737,628 $ 12,752,729
Accounts receivable:
Trade 47,980,392 50,837,162
Other 854,333 776,952
Inventories 58,045,138 60,446,826
Prepaid expenses 3,359,756 3,647,131
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Total current assets 129,977,247 128,460,800
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Property:
Land 1,236,287 1,237,784
Buildings and improvements 12,111,557 12,115,879
Machinery and equipment 15,125,188 14,860,030
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Total cost 28,473,032 28,213,693
Accumulated depreciation and amortization 12,553,914 12,159,291
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Property, net 15,919,118 16,054,402
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Investment in joint ventures 3,765,075 3,365,442
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Other assets:
Goodwill 14,379,034 14,538,350
Non compete Agreements 3,718,139 3,953,586
Trademarks 2,452,162 2,533,497
Other 1,748,634 2,062,562
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Total other assets 22,297,969 23,087,995
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TOTAL ASSETS $ 171,959,409 $ 170,968,639
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Accounts payable $ 26,745,374 $ 31,814,320
Accrued liabilities:
Taxes 4,004,274 --
Compensation and related items 6,407,430 8,828,872
Product warranties 7,665,641 7,452,061
Other 304,817 1,206,861
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Total current liabilities 45,127,536 49,302,114
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Other liabilities 1,847,064 1,847,064
Stockholders' equity:
Common stock - authorized 10,000,000 shares;
issued 9,100,897 shares @ 10/31/97 and 9,099,247
shares @ 7/31/97; par value of $.10 per share 910,090 909,925
Additional paid in capital 25,152,545 25,105,120
Foreign currency translation (773,848) (629,546)
Retained earnings 119,119,061 113,810,210
Restricted Stock Plan (46,791) --
Cost of treasury shares 955,758 shares @ 10/31/97
and 7/31/97 (19,376,248) (19,376,248)
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Total stockholders' equity 124,984,809 119,819,461
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 171,959,409 $ 170,968,639
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See notes to consolidated financial statements
3
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
(AS RESTATED, SEE NOTE #7)
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(UNAUDITED)
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THREE MONTHS ENDED OCTOBER 31
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1997 1996
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Net sales $ 165,458,354 $ 150,496,821
Cost of products sold 146,682,083 134,354,231
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Gross profit 18,776,271 16,142,590
Selling, general, and
administrative expenses 10,078,966 8,516,984
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Operating income 8,697,305 7,625,606
Interest income 235,799 236,638
Interest expense (44,865) (211,733)
Other income 446,973 384,962
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Income before income taxes 9,335,212 8,035,473
Provision for income taxes 3,782,056 3,245,426
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Net income $ 5,553,156 $ 4,790,047
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Average common shares outstanding 8,143,703 8,671,591
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Earnings per common share $ .68 $ .55
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Dividends paid per common share $ .03 $ .03
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See notes to consolidated financial statements
4
THOR INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
FOR THE THREE MONTHS ENDED OCTOBER 31, 1997 AND 1996
(AS RESTATED, SEE NOTE #7)
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(UNAUDITED)
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1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,553,156 $ 4,790,047
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation 585,671 579,515
Amortization 476,098 541,374
Changes in non cash assets and liabilities
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Accounts receivable 2,779,388 (2,474,816)
Inventories 2,401,688 (2,740,729)
Prepaid expenses and other 185,978 213,291
Accounts payable (5,068,945) (10,941,698)
Accrued liabilities 894,369 (2,574,204)
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Net cash provided by (used in) operating activities 7,807,403 (12,607,220)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant & equipment (476,456) (534,960)
Disposals of property, plant & equipment 41,759 4,202
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Net cash used in investing activities (434,697) (530,758)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends (244,305) (260,604)
Net proceeds from line of credit -- 7,485,000
Purchase of treasury stock -- (935,000)
Proceeds from issuance of common stock 800 --
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Net cash provided by (used in) financing activities (243,505) 6,289,396
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EFFECT OF EXCHANGE RATE CHANGES ON CASH (144,302) 272,350
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Net increase (decrease) in cash and equivalents 6,984,899 (6,576,232)
Cash and equivalents, beginning of year 12,752,729 12,737,778
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CASH AND EQUIVALENTS, END OF PERIOD $ 19,737,628 $ 6,161,546
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SUPPLEMENTAL CASH FLOW INFORMATION:
Non cash transaction - Issuance of restricted stock $ 46,791
Income taxes paid 250,000 $ 500,000
Interest paid 44,865 211,733
See notes to consolidated financial statements
5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AS RESTATED, SEE NOTE #7)
--------------------------
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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October 31, 1997 July 31, 1997
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Raw materials $38,707,766 $40,938,593
Work in process 13,577,387 14,755,637
Finished goods 9,129,962 7,921,573
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Total 61,415,115 63,615,803
Less excess of FIFO costs
over LIFO costs 3,369,977 3,168,977
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Total inventories $58,045,138 $60,446,826
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3. On September 29, 1997, the Board of Directors approved the Thor
Industries, Inc. Restricted Stock and Select Executive Incentive Plans.
Under the terms of the Restricted Stock Plan, a total of up to 100,000
restricted shares of common stock may be granted to selected executives of
Thor. Restrictions expire 50% after five years following the date of
issue, and the balance after six years. As of October 31, 1997, the
Company issued 1,500 shares of restricted stock under the Plan.
4. Earnings Per Share - The Company calculates earnings per share using
methods prescribed by Accounting Principles Board Opinion APB No. 15,
"Earnings per Share." In February 1997, the Financial Account Standards
Board issued Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per share," which replaces APB No. 15 and requires adoption for
periods ending after December 15, 1997. The statement will require dual
presentation of basic and diluted earnings per share on the face of the
income statement. For the period ended October 31, 1997, the basic and
diluted earnings per share calculated pursuant to SFAS No. 128 would not
be materially different from earnings per share as reported.
5. Comprehensive Income - In June 1997, the FASB issued SFAS No. 130,
"Reporting Comprehensive Income," which will require disclosure in the
financial statements of all the changes in equity during a period from
transactions and other events and circumstances from non-owner sources.
Items included in comprehensive income will include separate
classification of items based upon their nature. The Statement requires
that comparative information for prior years to be restated. SFAS No. 130
is effective for financial statements for fiscal years beginning after
December 15, 1997. The effect on the Company's financial statements has
not yet been determined.
6. Segments - In June 1997, the FASB issued SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information," which will require new
segment information in public companies' annual financial statements.
Additionally, selected information will be required in interim financial
statements. The Statement requires that comparative information for prior
years be restated. SFAS No. 131 is effective for financial statements for
periods beginning after December 15, 1997. The effect on the Company's
financial statements has not yet been determined.
7. 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 October 31, 1997 and July
31, 1997 and for the three months ended October 31, 1997 and October 31,
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.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(AS RESTATED, SEE NOTE #7)
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The effects of the restatement are as follows:
Three Months Ended October 31, 1997 Three Months Ended October 31, 1996
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As Previously As As Previously As
Reported Restated Reported Restated
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Net Sales $165,458,354 $165,458,354 $150,496,821 $150,496,821
Cost of Products Sold 145,924,675 146,682,083 133,806,911 134,354,231
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Gross Profit 19,533,679 18,776,271 16,689,910 16,142,590
Selling General and
Administrative Exp. 10,078,966 10,078,966 8,516,984 8,516,984
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Operating Income 9,454,713 8,697,305 8,172,926 7,625,606
Other Income(Expense) 637,907 637,907 409,867 409,867
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Income before Tax 10,092,620 9,335,212 8,582,793 8,035,473
Provision for Taxes 4,081,232 3,782,056 3,467,638 3,245,426
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Net Income $6,011,388 $5,553,156 $5,115,155 $4,790,047
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Earnings Per
Common Share $.74 $.68 $.59 $.55
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October 31, 1997 July 31, 1997
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As Previously As As Previously As
Reported Restated Reported Restated
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Cash & Cash Equivalents $20,378,253 $19,737,628 $13,380,357 $12,752,729
Accounts Receivable 50,297,727 48,980,392 52,714,496 50,837,162
Other Receivables 854,333 854,333 776,952 776,952
Inventories 60,283,662 58,045,138 62,380,940 60,446,826
Prepaid Exp. & Other 3,359,756 3,359,756 3,647,131 3,647,131
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Total Current Assets 135,173,731 130,977,247 132,899,876 128,460,800
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Property, Plant & Eq.(Net) 15,919,118 15,919,118 16,054,402 16,054,402
Investment in Joint Venture 3,765,075 3,765,075 3,365,442 3,365,442
Other Assets 22,297,969 22,297,969 23,087,995 23,087,995
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Total Assets 177,155,893 172,959,409 175,407,715 170,968,639
=========== =========== =========== ===========
Accounts Payable 26,745,374 26,745,374 31,814,320 31,814,320
Line of Credit 0 0 0 0
Accrued Liabilities 20,491,869 18,777,162 19,298,325 17,487,794
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Total Current Liabilities 47,237,243 45,522,536 51,112,645 49,302,114
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Other liabilities 1,847,064 1,847,064 1,847,064 1,847,064
Total stockholders' equity 128,071,586 125,589,809 122,448,006 119,819,461
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Total Liabilities & Equity $177,155,893 $172,959,409 $175,407,715 $170,968,639
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7
MANAGEMENT DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(AS RESTATED, SEE NOTE #7)
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Quarter Ended October 31, 1997 vs.
Quarter Ended October 31, 1996
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Net sales for the first quarter totaled $165,458,354, up 10% from $150,496,821
in the same period last year. Income before income taxes was $9,335,212 compared
to $8,035,473 in the same period last year. This increase was primarily due to
increased sales volume, improved labor efficiency and lower warranty costs.
Recreation vehicle selling prices were adjusted in the first quarter to coincide
with the introduction of new product offerings. Recreation vehicle revenues of
$125,660,481 were 7% higher than last year and were 76% of total company
revenues compared to 78% last year. Bus revenues of $39,797,873 were 21% higher
than last year and were 24% of total company revenues compared to 22% last year.
Manufacturing gross profit increased to 11.3% compared to 10.7% last year.
Operating income totaled $8,697,305, up 14% from $7,625,606 in the same period
last year. Selling, general and administrative expenses increased to
$10,078,966, 6.1% of sales, from $8,516,984, 5.7% of sales, primarily due to an
adjustment of $669,000 to deferred compensation in Fiscal 1997. Interest income
remained relatively constant and interest expense decreased by $166,868. This
decrease in interest expense was due to pay down of the line of credit.
The combined income tax rate was 40.5% in the current year, compared to 40.4% in
the prior year.
Financial Condition and Liquidity
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As of October 31, 1997, Thor had $19,737,628 in cash and cash equivalents,
compared to $12,752,729 on July 31, 1997. Working capital at October 31, 1997
was $84,849,711 compared to $79,158,686 at July 31, 1997. Inventory valued at
current cost at October 31, 1997 exceeded the LIFO inventory by $3,369,977
At October 31, 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 October
31, 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 October
31, 1997. Amortization of intangibles decreased from $541,374 for the period
ended October 31, 1996, to $476,098 for the period ended October 31, 1997 due to
certain intangibles being fully amortized.
On September 29, 1997, the Board of Directors approved the Thor Industries, Inc.
Restricted Stock and Select Executive Incentive Plans. Under the terms of the
Restricted Stock Plan a total of up to 100,000 restricted shares of stock may be
granted to selected executives of Thor within a 10 year period. The effect on
shares outstanding for the quarter was not material. The Company is in the
process of filing a form S-8 for both plans.
The Company believes that 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 1998.
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)