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: April 30, 2002**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 	 43-0985160 .
(State or other jurisdiction of incorporation)				 (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	 620-663-5551 .
 

 

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 		 				 7,039,829 .
		Class						 Outstanding at June 12, 2002**COLLINS INDUSTRIES, INC. AND SUBSIDIARIES

FORM 10-Q

April 30, 2002

INDEX

PART I.
FINANCIAL INFORMATION
PAGE NO.
 
 
 
Item 1.
Financial Statements:
 
 
 
 
	
Consolidated Condensed Balance Sheets
 
 
April 30, 2002 and October 31, 2001
2
 
 
 
 
Consolidated Condensed Statements of Income
 
 
Three and Six Months Ended April 30, 2002 

and 2001					
3
 
 
 
 
Consolidated Condensed Statements of Cash Flow
 
 
Six Months Ended April 30, 2002 and 2001
4
 
 
 
 
Notes to Consolidated Condensed Financial Statements
5
 
 
 
Item 2.
 
 
 
 
 
 
Management's Discussion and Analysis of Financial
 
 
Condition and Results of Operations
10
 
 
 
Item 3.
 
 
 
 
 
 
Quantitative and Qualitative Disclosures About Market 
 
 
Risk
14
 
 
 
PART II.
OTHER INFORMATION
 
 
 
 
Item 4.
Submission of Matters to a Vote of Security-Holders
15
 
 
 
Item 6.
Exhibits and Reports on Form 8-K
15
 
 
 
SIGNATURES
16
PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

Collins Industries, Inc. and Subsidiaries

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)

 
April 30,
 
October 31,
 
2002 .
 
2001 .
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash
$ 128,501
 
$ 192,615
Receivables, trade & other
5,435,261
 
6,085,501
Inventories, lower of cost (FIFO) or market
38,782,933
 
35,369,300
Prepaid expenses and other current assets
2,042,059
 
3,144,129
Total current assets
46,388,754
 
44,791,545
 
 
 
 
Property and equipment, at cost
47,002,335
 
45,892,963
Less: accumulated depreciation
28,506,917
 
27,384,835
Net property and equipment
18,495,418
 
18,508,128
Other assets
6,379,644
 
6,526,771
Total assets
$71,263,816
 
$69,826,444
 
 
 
 
LIABILITIES & SHAREHOLDERS' INVESTMENT
 
 
 
Current liabilities:
 
 
 
Current maturities of long-term debt & capitalized leases
$ 1,876,551
 
$ 2,044,553
Accounts payable
19,443,058
 
17,530,953
Accrued expenses
5,214,995
 
6,437,099
Total current liabilities
26,534,604
 
26,012,605
 
 
 
 
Long-term debt and capitalized leases
17,791,418
 
15,123,781
 
 
 
 
Deferred income tax
959,688
 
959,688
 
 
 
 
Shareholders' investment:
 
 
 
Common stock
701,729
 
729,175
Paid-in capital
16,614,678
 
17,612,508
Deferred compensation
(596,091)
 
(945,981)
Accumulated other comprehensive income (loss), net
(133,470)
 
- 
Retained earnings
9,391,260
 
10,334,668
Total shareholders' investment
25,978,106
 
27,730,370
Total liabilities & shareholders' investment
$71,263,816
 
$69,826,444
 
 
 
 
 
 
 
 
 
 
 
 
(See accompanying notes)
 
 
 

 

Collins Industries, Inc. and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Unaudited)

 
Three Months Ended
Six Months Ended
 
April 30,
April 30	,
 
2002 .
2001 .
2002 .
2001 .
 
 
 
 
 
Sales
$ 47,375,447
$ 51,073,089
$ 87,149,472
$ 93,517,975
Cost of sales
42,303,910
44,306,915
78,159,517
82,205,690
 
 
 
 
 
Gross profit
5,071,537
6,766,174
8,989,955
11,312,285
 
 
 
 
 
Selling, general and administrative expenses
4,358,283
4,916,711
9,083,292
9,838,320
 
 
 
 
 
Income (loss) from operations
713,254
1,849,463
(93,337)
1,473,965
 
 
 
 
 
Other income (expense):
 
 
 
 
Interest expense
(417,385)
(596,897)
(674,879)
(1,207,042)
Other, net
(9,395)
12,327
(5,770)
20,450
 
 
 
 
 
 
 
 
 
 
Income (loss) before provision (benefit) for income taxes
286,474
1,264,893
(773,986)
287,373
 
 
 
 
 
Provision (benefit) for income taxes
120,000
480,000
(280,000)
110,000
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$ 166,474
$ 784,893
$ (493,986)
$ 177,373
 
 
 
 
 
Earnings (loss) per share:
 
 
 
 
Basic
$ .03 
$ .11 
$ (.07)
$ .03 
Diluted
$ .02 
$ .11 
$ (.07)
$ .02 
 
 
 
 
 
Dividends per share
$ .0300 
$ .0250 
$ .0600 
$ .0875 
 
 
 
 
 
Weighted average common 
 
 
 
 
and common equivalent shares 
 
 
 
 
outstanding:
 
 
 
 
Basic
6,534,294 
6,891,566 
6,626,811 
6,951,117 
Diluted
6,921,842 
7,051,354 
6,626,811 
7,126,570 
 
 
 
 
 

(See accompanying notes)

 

Collins Industries, Inc. and Subsidiaries

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW

(Unaudited)

 
Six Months Ended
 
April 30,
 
2002 .
2001 .
Cash flow from operations:
 
 
Cash received from customers
$87,799,712
$95,085,280
Cash paid to suppliers and employees
(86,755,908)
(97,854,190)
Interest paid
(650,598)
(1,239,330)
Income taxes paid
(247,719)
- 
 
 
 
Cash provided by (used in) operations
145,487
(4,008,240)
 
 
 
Cash flow from investing activities:
 
 
Capital expenditures
(1,125,241)
(751,296)
Other, net
(109,295)
(58,616)
 
 
 
Cash used in investing activities
(1,234,536)
(809,912)
 
 
 
Cash flow from financing activities:
 
 
Borrowings of long-term debt
3,783,784
7,652,929
Principal payments of long-term debt 
 
 
and capitalized leases
(1,284,149)
(1,608,460)
Purchase of common stock and other capital transactions
(1,053,122)
(676,280)
Payment of dividends
(421,578)
(612,904)
 
 
 
Cash provided by financing activities
1,024,935
4,755,285
 
 
 
Net decrease in cash
(64,114)
(62,867)
 
 
 
Cash at beginning of period
192,615
204,101
 
 
 
Cash at end of period
$ 128,501
$ 141,234
 
 
 
Reconciliation of net income (loss) to net cash provided by (used in) operations:
 
 
Net income (loss)
$ (493,986)
$ 177,373
Depreciation and amortization
1,744,265
1,782,079
Decrease in receivables
650,240
1,567,305
Increase in inventories
(3,413,633)
(4,907,998)
Decrease in prepaid expenses and other current assets
1,182,070
772,692
Increase (decrease) in accounts payable and accrued expenses
476,531
(3,401,760)
Other
- 
2,069
 
 
 
Cash provided by (used in) operations
$ 145,487
$(4,008,240)
 
 
 
(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 April 30, 2002 and the results of operations for the three and six months ended April 30, 2002 and 2001, and the cash flows for the six months ended April 30, 2002 and 2001.

The Company suggests that the unaudited Consolidated Condensed Financial Statements for the three and six months ended April 30, 2002 be read in conjunction with the Company's Annual Report on Form 10-K for the year ended October 31, 2001.
** 

(2) Goodwill**
Other assets include unamortized goodwill related to acquisitions in prior years of a bus company and certain assets of a road construction product line. These acquisitions were not material and did not require pro forma disclosures of their operating results. Both acquisitions were accounted for as purchases and the results of their operations have been consolidated with those of the Company since the date of acquisition. Accordingly, other assets include unamortized goodwill related to the bus segment of $3.1 and $3.3 million at April 30, 2002 and 2001, respectively. Other assets also include unamortized goodwill related to the terminal trucks/road construction segment of $2.1 and $2.3 million, at April 30, 2002 and 2001, respectively. The excess cost over the fair value of net assets acquired is being amortized on a straight-line basis over 20 years for the bus segment and 15 years for the terminal trucks/road construction segment. Goodwill amortization reflected in the consolidated statements of income, totaled $85,929 and $81,611 for the three months ended April 30, 2002 and 2001, respectively. Goodwill amortization reflected in the consolidated statements of income, totaled $171,858 and $162,387 for the six months ended April 30, 2002 and 2001, respectively. 

 

The Company periodically evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of goodwill may warrant revisions or that the remaining balance of goodwill may not be recoverable. When factors indicate that the goodwill should be evaluated for possible impairment, the Company uses an estimate of undiscounted cash flows over the remaining life of the goodwill in measuring whether the goodwill is recoverable.
**(3) 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 April 30, 2002 and October 31, 2001, consisted of the following:

 
 

April 30, 2002
 

October 31, 2001
Chassis
$ 7,313,940
$ 6,334,882
Raw materials & components
15,009,335
12,163,394
Work-in-process
7,175,836
6,021,652
Finished goods
9,283,822
10,849,372
 
$38,782,933
$35,369,300**(4) Earnings per Share

Dilutive securities, consisting of options to purchase the Company's common stock and restricted stock awards, included in the calculation of diluted weighted average common shares were 387,548 and 159,788 for the three months ended April 30, 2002 and 2001, respectively. Due to a net loss, there were no dilutive securities for the six month period ended April 30, 2002. The effect of dilutive stock options and restricted stock awards on weighted average shares outstanding was an increase of 175,452 shares for the six months ended April 30, 2001.
**(5) Contingencies and Litigation**
At April 30, 2002, the Company had contingencies and pending litigation 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.
**(6) Segment Information**
Collins Industries, Inc. has three reportable segments: Ambulances, buses and terminal trucks/road construction equipment. The ambulance segment produces modular and van type ambulances for sale to hospitals, ambulance services, fire departments and other governmental agencies. The bus segment produces small school buses, commercial buses and shuttle buses for sale to schools, hotel shuttle services, airports, and other governmental agencies. Terminal truck and road construction equipment products were initially disclosed as separate segments. In the second quarter of fiscal 2001, terminal truck and road construction equipment segments were combined. This combination resulted from consolidation of many of their operations and common management. The terminal trucks/road construction equipment segment produces off-road trucks designed to move trailers and containers for warehouses, truck terminals, rail yards, rail terminals and shipping ports and produces a line of road construction equipment
 
Three Months Ended
Six Months Ended
(In Thousands)
April 30,
April 30,
 
2002 .
2001 .
2002 .
2001 .**Revenues from external customers: 
 
 
 
 
Ambulance
$ 23,355
$ 24,786
$ 40,978
$ 44,338
Buses
15,458
13,267
28,812
24,979
Terminal Trucks / Road 

Construction Equipment
 

8,562 
 

13,020 
 

17,359
 

24,201
Consolidated Total
$ 47,375
$ 51,073
$ 87,149
$ 93,518
 
 
 
 
 **Segment pretax profit (loss):
 
 
 
 
Ambulance
$ 1,244
$ 1,616
$ 1,630
$ 1,163
Buses
(161)
(159)
(453)
(270)
Terminal Trucks / Road 

Construction Equipment
 

84
 

600
 

279
 

1,048
Other
(881)
(792)
(2,230)
(1,654)
Consolidated Total
$ 286
$ 1,265
$ (774)
$ 287
 
 
 
 
  
As of
 
April 30,
October 31,
 
2002 .
2001 .**Segment assets:
 
 
Ambulance
$26,933
$26,411
Buses
24,385
22,125
Terminal Trucks / Road 

Construction Equipment
16,820
16,767
Other
3,126
4,523
Consolidated Total
$71,264
$69,826
 
 
 
 
** 

(7)**Comprehensive Income**
Comprehensive income consists of net income and other gains and losses affecting shareholders' investments that, under generally accepted accounting principles, are excluded from net income. Accumulated other comprehensive income (loss) as of April 30, 2002, includes unrealized losses on interest rate swaps of $213,470, reduced by $80,000 of deferred tax benefit. Comprehensive income (loss) for the three and six months ended April 30, 2002, was $187,035 and ($627,456), respectively. 
**(8) New Accounting Standards**
In June 2001, the Financial Accounting Standards Board finalized FASB Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method of accounting and prohibits the use of the pooling-of-interests method of accounting for business combinations initiated after June 30, 2001. SFAS 141 also requires that the Company recognize acquired intangible assets apart from goodwill if the acquired intangible assets meet certain criteria. SFAS 141 applies to all business combinations initiated after June 30, 2001 and for purchase business combinations completed on or after July 1, 2001.

SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. SFAS 142 is required to be applied in fiscal years beginning after December 15, 2001 to all goodwill and other intangible assets recognized at that date, regardless of when those assets were initially recognized. SFAS 142 requires the Company to complete a transitional goodwill impairment test six months from the date of adoption. 

The Company's previous business combinations were accounted for using the purchase method. As of April 30, 2002, the net carrying amount of goodwill was $5.2 million. Amortization expense during the three and six month periods ended April 30, 2002 was $0.1 and $0.2 million respectively. The Company has adopted SFAS 141 and will adopt SFAS 142 beginning in fiscal year 2003. Management does not anticipate the adoption of SFAS 142 will have a material impact on its financial position or results of operations.
** 

(9) Subsequent Event**
On May 17, 2002 the Company entered into an agreement with Fleet Capital Corporation to replace its existing credit facility with Bank of America. The new agreement provides a $38.2 million senior secured credit facility. The facility will be used to refinance existing debt, finance new capital expenditures, and provide ongoing working capital. The agreement provides for a revolving credit facility of $25.0 million and long-term facilities of $13.2 million. The credit facilities bear interest based on a combination of Eurodollar (LIBOR plus 1.75%) and the prime rate.The other terms contained in the new agreement with Fleet Capital Corporation are similar to those in the agreement existing with Bank of America at April 30, 2002.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of****************