-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UvtzF3cEAEfaE7ZgFdwYimBdAGYAweWIX9JMyH6vMpnmP2hH2/IOd180KxLuKrAT 9DYDo2/agEFdwCDURW2R9g== 0000950124-02-002318.txt : 20020712 0000950124-02-002318.hdr.sgml : 20020711 20020711170733 ACCESSION NUMBER: 0000950124-02-002318 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020531 FILED AS OF DATE: 20020711 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KNUSAGA CORP CENTRAL INDEX KEY: 0000225544 STANDARD INDUSTRIAL CLASSIFICATION: PUBLIC BUILDING AND RELATED FURNITURE [2531] IRS NUMBER: 621004034 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-07795 FILM NUMBER: 02701263 BUSINESS ADDRESS: STREET 1: 3578 S VAN DYKE HWY CITY: ALMONT STATE: MI ZIP: 48003 BUSINESS PHONE: 8107988567 FORMER COMPANY: FORMER CONFORMED NAME: AMERICANADA LTD DATE OF NAME CHANGE: 19600201 10QSB 1 k70394e10qsb.txt QUARTERLY REPORT FOR QUARTER ENDED 05/31/02 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended May 31, 2002 Commission File Number 0-7795 KNUSAGA CORPORATION (Exact name of Registrant as specified in its charter) NEVADA (State or other jurisdiction of incorporation or organization) 38-3601122 (I.R.S.) Employer Identification Number 3578 S. VAN DYKE ALMONT, MI 48803 (Address of principal executive office and zip code) Registrant's telephone number (include area code): (810) 798-8567 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 twelve months (or 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. X YES NO --- --- Shares of Common Stock Par Value $0.001, outstanding: 7,175,000. -1- RESULTS OF OPERATIONS The Company's operations are classified into two principal reportable segments, tubing and seat tracks, that provide different products or services. Separate management of each segment is required because each business unit is subject to different marketing, production and technology strategies. Combined net sales increased 2.0% in the third quarter ending May 31, 2002 of the fiscal year ending August 2002 to $2,617,025 from $2,566,936 a year ago. This is a result of a strong recovery in the motor home market served by the registrant's seat track business and an increase in prices resulting from the company selling direct rather than through a distributor, although there was an increase in selling expense. For the third quarter, sales for this segment increased 20.5% to $1,184,024 from $982,872 a year ago. The heavy truck market served by our tubing segment is in the second year of a sharp decline. For the third quarter the registrant's tube sales to this segment declined 9.5% to $1,433,001 from $1,584,064 a year ago. For the nine months ending May 31, 2002 sales declined 1.2% to $7,183,627 from $7,272,890 in the year ago period as a result of the weak first quarter of the current fiscal year ending August 31, 2002. The registrant operated at a $141,360 profit in the third quarter of the 2002 fiscal year ending May 31, 2002 versus a profit of $23,400 in the year ago period as a result of the improvement in the seat track business and continuing expense reduction in the tubing business. For the nine months ending May 31, 2002 profit was $236,141 versus a loss of $149,980 in the year ago period. Below is summarized segmental data for the third quarters and nine months ending May 31, 2002 and May 31, 2001.
- --------------------------------------------------------------------------------------------------------------- | TUBING SEAT TRACK TOTAL | - --------------------------------------------------------------------------------------------------------------- | 3RD QTR 2002 2001 2002 2001 2002 2001 | - --------------------------------------------------------------------------------------------------------------- | REVENUE 1,433,001 1,584,064 1,184,024 982,872 2,617,025 2,566,936 | - --------------------------------------------------------------------------------------------------------------- | PROFIT (41,074) (127,679) 182,434 151,079 141,360 23,400 | - --------------------------------------------------------------------------------------------------------------- | | - --------------------------------------------------------------------------------------------------------------- | 9 MTHS | - --------------------------------------------------------------------------------------------------------------- | REVENUE 4,048,504 4,832,517 3,135,123 2,440,373 7,183,627 7,272,890 | - --------------------------------------------------------------------------------------------------------------- | PROFIT (243,251) (442,892) 479,392 293,038 236,141 (149,854) | - ---------------------------------------------------------------------------------------------------------------
Selling, general and administrative expenses increased 37.4% in the third quarter ending May 31, 2002 to $332,774 from $242,190 in the year ago period as a result of the expenses incurred in direct selling versus using the distributor. Gross income improvement from higher selling prices offset this increased selling expense. For the nine months ending May 31, 2002 these expenses increased 15.2% to $913,907 to $793,222 in the year ago period. -2- LIQUIDITY AND SOURCES OF CAPITAL As of the end of the fiscal third quarter, the registrant was in compliance with its loan covenants. These loan agreements currently mature October 1, 2002. Net cash generated from operating activities was $317,808 in the third quarter ending May 31, 2002 versus $405,659 used for operations in the year ago period. RECENT DEVELOPMENTS The tubing business which primarily serves the heavy truck (automotive) sector of the economy has experienced continuing pricing pressure from its OEM customers. There appears to be little prospect that this situation will change in the future so this segment can return to acceptable profitability, therefore the registrant has decided to eliminate or sharply reduce this business segment by the end of its current fiscal year. The leased facility in St. Thomas, Ontario that was used to sequence exhaust systems into Freightliner's Sterling truck plant was closed during the third quarter when the lease expired. The seat track business has encountered significant price competition in the current fiscal year, which has resulted in the loss of a significant customer. This customer loss will result in substantially reduced sales for the fiscal year starting September 1, 2002. Effective May 19, 2002, the Registrant merged into its wholly-owned Nevada subsidiary. As a part of this merger, outstanding shares of the Registrant's common stock and preferred stock were converted into an equal number of shares of the subsidiary's common stock and the subsidiary's name was changed to "KnuSaga Corporation." Registrant is now a Nevada corporation and the rights of its shareholders are governed by Nevada law. -3- KNUSAGA CORPORATION BALANCE SHEET (UNAUDITED) MAY 31, 2002 AND AUGUST 31, 2001
31-May-02 31-Aug-01 ASSETS CASH 330,214 62,753 ACCOUNTS RECEIVABLE 1,528,066 1,538,348 ACCOUNTS RECEIVABLE-OTHER 6,128 3,598 INVENTORIES 1,031,349 1,010,533 REFUNDABLE TAXES 205,566 PREPAID EXPENSES 110,030 44,600 TOTAL CURRENT ASSETS 3,005,787 2,865,398 NET PROPERTY AND EQUIPMENT 1,846,924 2,053,985 OTHER ASSETS DEPOSITS 7,051 10,579 INVESTMENTS IN JOINT VENTURES 111,285 99,291 GOODWILL, NET OF AMORTIZATION 5,149 6,652 TOTAL OTHER ASSETS 123,485 116,522 TOTAL ASSETS 4,976,196 5,035,905 LIABILITIES ACCOUNTS PAYABLE 368,663 715,712 NOTES PAYABLE 1,352,944 1,667,884 ACCRUED LIABILITIES 1,343,263 863,172 TOTAL CURRENT LIABILITIES 3,064,870 3,246,768 LONG TERM DEBT 584,867 698,819 DEFERRED TAXES 36,500 36,500 TOTAL LIABILITIES 3,686,237 3,982,087 STOCKHOLDER EQUITY STOCK 7,175 70,000 PREFERRED STOCK 0 175,000 ADDITIONAL PAIN IN CAPITAL 604,190 366,365 RETAINED EARNINGS 785,937 549,796 NOTE RECEIVABLE SHAREHOLDER (107,343) (107,343) TOTAL SHAREHOLDER EQUITY 1,289,959 1,053,818 TOTAL LIABILITIES & SHAREHOLDER 4,976,196 5,035,905 EQUITY
The financial statements included in this Report reflect all adjustment, in the opinion of management, which are necessary for fair presentation. These financial statements should be read in connection with the footnotes that are a part of Registrant's audited financial statements contained in its most recently filed annual report on Form 10KSB. -4- KNUSAGA CORPORATION STATEMENT OF INCOME (UNAUDITED) FOR MONTHS ENDED MAY 31, 2002 AND MAY 31, 2001
3 MONTHS ENDED 9 MONTHS ENDED 5/31/02 5/31/01 5/31/02 5/31/01 NET SALES 2,617,025 2,566,936 7,183,627 7,272,890 COST OF GOODS SOLD 2,034,541 2,245,956 5,762,519 6,440,602 GROSS PROFIT 582,484 320,980 1,421,108 832,288 SG&A EXPENSES 332,714 242,190 915,844 793,222 MISC INCOME (EXPENSE) (25,296) (36,127) (85,536) (212,316) INCOME (LOSS) BEFORE 224,474 42,663 419,728 (173,250) TAXES FED INCOME TAXES 83,114 19,263 183,587 (23,396) NET INCOME BEFORE 141,360 23,400 236,141 (149,854) EXTRAORDINARY EXTRAORDINARY ITEMS -- -- -- -- NET INCOME 141,360 23,400 236,141 (149,854) SHARES 7,175,000 7,000,000 7,175,000 7,000,000 EARNINGS PER SHARE 0.020 0.003 0.03 (0.021)
-5- KNUSAGA CORPORATION STATEMENT OF CASH FLOW (UNAUDITED) FOR MONTHS ENDED MAY 31, 2002 AND MAY 31, 2001
3 MONTHS ENDED 9 MONTHS ENDED 5/31/02 5/31/01 5/31/02 5/31/01 NET INCOME 141,360 23,400 236,141 (149,854) DEPRECIATION 55,620 88,805 210,566 270,825 (INCREASE)DECREASE IN ACCTS RECEIVABLE 113,971 (330,311) 7,752 (222,392) INVENTORIES 66,165 (29,024) (20,816) (93,595) REFUNDABLE TAXES 205,566 PREPAID EXPENSES (31,470) 9,597 (65,430) (40,565) OTHER ASSETS (262) 1,034 3,528 2,942 INCREASE(DECREASE) IN ACCOUNTS PAYABLE (183,815) (184,316) (347,049) (394,634) ACCRUED LIABILITIES 156,239 15,156 480,091 467,684 CASH PROVIDE BY (USED FOR) OPERATING ACTIVITIES 317,808 (405,659) 710,349 (159,589) INVESTMENT ACTIVITIES PURCHASE (SALE) OF EQUIPMENT 9,462 7,839 (2,002) (15,244) INVESTMENT IN JOINT VENTURES (1,174) (26,221) (11,994) 7,372 CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES 8,288 (18,382) (13,996) (7,872) FINANCING ACTIVITIES PAYMENT OF NOTES (121,768) 230,639 (428,892) (282,537) CASH USED FOR FINANCING ACTIVITIES (121,768) 230,639 (428,892) (282,537) NET INCREASE(DECREASE) 204,328 (193,402) 267,461 (449,998) BEGINNING CASH 125,893 192,317 62,753 448,913 ENDING CASH 330,221 (1,085) 330,214 (1,085)
-6- Pursuant to the requirements of Section 13 or 15(d) 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. KNUSAGA CORPORATION By: James Musser ------------------------------- President, Duly Authorized Officer and Principal Accounting Officer Dated: July 11, 2002 ------------------------------- -7- -----END PRIVACY-ENHANCED MESSAGE-----