-----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, LwlpyuEOi9QEmlvIO10xxAr6RcitHRJNdMcqy//N11SpXbMWK3A4Gc1Ync3nLUc0 jqUExEZ9f/apnypx3+IZ2Q== 0000950124-03-002258.txt : 20030723 0000950124-03-002258.hdr.sgml : 20030723 20030702132053 ACCESSION NUMBER: 0000950124-03-002258 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030531 FILED AS OF DATE: 20030702 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: 03770818 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 k78063e10qsb.txt FORM 10QSB FOR QUARTER ENDED MAY 31, 2003 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, 2003 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 48003 (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 $.001, outstanding: 7,175,000. 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 declined 53.7% in the third quarter ending May 31, 2003 of the fiscal year ending August 2003 to $1,212,948 from $2,617,025 a year ago. Sales for the tubing segment in the third quarter decreased by 39.1% to $873,052 from $1,433,001 a year ago. The heavy truck market, served by our tubing segment, is entering the third year of a sharp decline from traditional levels, however the decline in this quarter, compared to a year ago, is the result of business lost to a competitor because of pricing pressures only partially offset by business from new customers. In the third quarter sales in the seat track segment, which serves the Class A motorhome market, declined 71.3% to $339,896 from $1,184,024 a year ago. This is a result of the registrant's major customer switching to a newer, lower cost product from a competitor. The registrant has delivered prototypes of a new seat track design to two major potential customers. This new design could enter production in time for the 2004 model motorhome production which begins in the Fall of this year. For the nine months ending May 31, 2003, combined sales declined 44.7% to $3,972,579 from $7,183,627 in the prior year the same reasons as stated above. The registrant operated at a loss of $68,036 in the third quarter of the 2003 fiscal year ending May 31, 2003 versus a profit of $141,360 in the prior year as a result of the decreased sales revenue. For the nine months ending May 31, 2003, the loss was $110,870 versus a profit of $236,141 in the prior year. Below is summarized segmental data for the third quarters and nine months ending May 31, 2003 and May 31, 2002.
- ----------------------------------------------------------------------------------- TUBING SEAT TRACK TOTAL - ----------------------------------------------------------------------------------- 3RD QTR 2003 2002 2003 2002 2003 2002 - ----------------------------------------------------------------------------------- REVENUE 873,052 1,433,001 339,896 1,184,024 1,212,948 2,617,025 - ----------------------------------------------------------------------------------- PROFIT (84,660) (41,074) 16,624 182,434 (68,036) 141,360 - ----------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------- 9 MTHS - ----------------------------------------------------------------------------------- REVENUE 2,815,366 4,048,504 1,157,213 3,135,123 3,972,579 7,183,627 - ----------------------------------------------------------------------------------- PROFIT (184,329) (243,251) 73,459 479,392 (110,870) 236,141 - -----------------------------------------------------------------------------------
Selling, general and administrative expenses decreased 37.4% in the third quarter ending May 31, 2003 to $181,945 from $290,323 in the prior year as a result of cost reduction actions taken in response to the decreased sales. For the nine months ending May 31, 2003 selling, general and administrative expenses of $576,853 were virtually unchanged from $582,368 in the prior year. LIQUIDITY AND SOURCES OF CAPITAL The Registrant has a $1,250,000 line of credit with Standard Federal Bank, with interest payable monthly at the Bank's Prime Rate plus 1%. This line of credit is evidenced by a note which is secured by a security interest/mortgage on all of the Registrant's assets. This line of credit is due January 1, 2004. As of May 31,2003, the outstanding balance was $244,761 and the applicable interest rate was 5.25%. The Registrant believes that its present cash balances, its cash flow from operations and, to the extent necessary, bank borrowings are sufficient to fund its working capital and other investment needs. CONTINGENT MATTERS There are no contingencies or consequential uncertainties known that will materially affect the financial information as presented. KNUSAGA CORPORATION BALANCE SHEET (UNAUDITED) MAY 31,2003 AND AUGUST 31, 2002
31-May-03 31-Aug-02 ASSETS CASH 78,277 330,214 ACCOUNTS RECEIVABLE 534,688 1,528,066 ACCOUNTS RECEIVABLE-OTHER 289,972 6,128 INVENTORIES 708,348 1,031,349 REFUNDABLE TAXES PREPAID EXPENSES 103,514 110,030 TOTAL CURRENT ASSETS 1,714,799 3,005,787 NET PROPERTY AND EQUIPMENT 1,699,589 1,846,924 OTHER ASSETS DEPOSITS 7,150 7,051 INVESTMENTS IN JOINT VENTURES 126,066 111,285 GOODWILL, NET OF AMORTIZATION 4,648 5,149 TOTAL OTHER ASSETS 137,648 123,485 TOTAL ASSETS 3,552,252 4,976,196 LIABILITIES ACCOUNTS PAYABLE 341,153 368,663 NOTES PAYABLE 847,123 1,352,944 ACCRUED LIABILITIES 781,292 1,343,263 TOTAL CURRENT LIABILITIES 1,969,568 3,064,870 LONG TERM DEBT 344,891 584,867 DEFERRED TAXES 36,500 TOTAL LIABILITIES 2,371,759 3,686,237 STOCKHOLDER EQUITY STOCK 7,175 70,000 PREFERRED STOCK 175,000 ADDITIONAL PAID IN CAPITAL 604,190 366,365 RETAINED EARNINGS 569,128 785,937 NOTE RECEIVABLE SHARE HOLDER (107,343) TOTAL SHAREHOLDER EQUITY 1,180,493 1,289,959 TOTAL LIABILITIES & SHAREHOLDER 3,552,252 4,976,196 EQUITY
KNUSAGA CORPORATION STATEMENT OF INCOME (UNAUDITED) FOR MONTHS ENDED MAY 31, 2003 AND MAY 31, 2002 3 MONTHS ENDED 9 MONTHS ENDED 5/31/03 5/31/02 5/31/03 5/31/02
NET SALES 1,212,948 2,617,025 3,972,579 7,183,627 COST OF GOODS SOLD 1,129,669 2,034,541 3,601,869 5,762,519 GROSS PROFIT 83,279 582,484 370,710 1,421,108 SELLIN, GENERAL & 181,945 332,714 576,846 915,844 ADMINISTRATIVE EXPENSES MISC INCOME (EXPENSE) 19,823 (25,296) 38,465 (85,536) INCOME (LOSS) BEFORE (78,843) 224,474 (167,671) 419,728 TAXES FED INCOME TAXES (10,807) 83,114 (56,801) 183,587 NET INCOME BEFORE (68,036) 141,360 (110,870) 236,141 EXTRAORDINARY ITEMS - - NET INCOME (68,036) 141,360 (110,870) 236,141 AVERAGE SHARES 7,175,000 7,000,000 7,175,000 7,000,000 OUTSTANDING EARNINGS PER SHARE (0.009) 0.020 (0.015) 0.034
The Financial Statements included in this report reflect all the adjustments, which, in the opinion of Registrant's management, are necessary for fair presentation. The Financial Statements should be read in conjunction with the footnotes which are a part of Registrant's Audited Financial Statements contained in Registrant's most recently Filed Annual Report on Form 10KSB. KNUSAGA CORPORATION STATEMENT OF CASH FLOW (UNAUDITED) FOR MONTHS ENDED MAY 31, 2003 AND MAY 31, 2002
3 MONTHS ENDED 9 MONTHS ENDED 5/31/03 5/31/02 5/31/03 5/31/02 NET INCOME (110,870) 141,360 (110,870) 236,141 DEPRECIATION 84,457 55,620 207,622 210,566 GAIN ON SALE OF ASSETS (76,398) (INCREASE)DECREASE IN ACCTS RECEIVABLE 488,114 113,971 488,114 7,752 INVENTORIES (8,026) 66,165 (8,026) (20,816) REFUNDABLE TAXES 205,566 PREPAID EXPENSES (46,115) (31,470) (46,115) (65,430) OTHER ASSETS (100) (262) (100) 3,528 INCREASE(DECREASE) IN ACCOUNTS PAYABLE (72,646) (183,815) (72,646) (347,049) ACCRUED LIABILITIES 136,091) 156,239 (136,091) 480,091 CASH PROVIDED BY (USED FOR) 198,723 317,808 245,490 710,349 OPERATING ACTIVITIES INVESTMENT ACTIVITIES PURCHASE OF EQUIP'T 94,767 9,462 (42,258) (2,002) SALE OF EQUIPMENT 90,258 INVESTMENT IN JOINT (120) (1,174) (120) (11,994) VENTURES CASH PROVIDED BY 94,647 8,288 47,880 (13,996) (USED FOR) INVESTING ACTIVITIES FINANCING ACTIVITIES PAYMENT OF NOTES (350,621) (121,768) (350,621) (428,892) CASH USED FOR (350,621) (121,768) (350,621) (428,892) FINANCINB ACTIVITIES NET INCREASE (57251) 204,328 (57,251) 267,461 (DECREASE) BEGINNING CASH 135,528 125,893 135,528 62,753 ENDING CASH 78,277 330,221 78,277 330,214
FORWARD LOOKING STATEMENTS Certain sections of this quarterly report contain statements reflecting the Registrant's views about its future performance and constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of terminology such as "will," anticipate," "estimate," "expect," intends," or similar words. These views involve risks and uncertainties that are difficult to predict and, accordingly, the Registrant's actual results may differ materially from the results discussed in such forward-looking statements. Readers should consider that various factors in the United States and abroad, including changes in general economic conditions, competitive market conditions and pricing pressures, relationships with key customers, industry consolidation of vehicle and truck suppliers, shifts in distribution, currency exchange rates and other factors discussed in the Registrant's other filings with the Securities and Exchange Commission, may affect the Registrant's performance. The Registrant undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events or otherwise. Supplemental Item. Controls and Procedures Based on their most recent evaluation, which was completed within 90 days of the filing of this Form 10-QSB, the registrant's Chief Executive Officer and Chief Financial Officer believe the registrant's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) are effective to ensure that information required to be disclosed by the registrant in this report is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. There were no significant changes in these controls subsequent to the date of their evaluation and there were no corrective actions with regard to significant deficiencies and material weaknesses. 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 KNUSAGA CORPORATION By: James G. Musser By: Jerry Luptak -------------------------------------------- ----------------------------------------------- Director/President Vice President and Principal Financial Officer (Principal Executive Officer and Controller) Dated: July 2, 2003 Dated: July 2, 2003 -------------------------------------------- -----------------------------------------------
KNUSAGA CORPORATION CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION --------------- I, James G. Musser, certify that: 1) I have received this quarterly report on Form 10-QSB of KnuSaga Corporation; 2) Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3) Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4) The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5) The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6) The registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 2, 2003 /s/ James G. Musser - ------------------------- James G. Musser Chief Executive Officer KNUSAGA CORPORATION CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATION ----------------- I, Jerry Luptak, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of KnuSaga Corporation; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. Designed such disclosure controls and procedures to ensure that material information relating to the registrant is made known to us, particularly during the period in which this quarterly report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c. Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying office and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 2, 2003 /s/ Jerry Luptak - --------------------- Jerry Luptak Chief Financial Officer 10-Q EXHIBIT INDEX EXHIBIT NO. DESCRIPTION EX-99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Ex-99.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 EX-99.1 3 k78063exv99w1.txt SEC. 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 of THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of KnuSaga Corporation ("KnuSaga") on Form 10-QSB for the period ending May 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James G. Musser, President, Chief Executive Officer of KnuSaga and a member of the Board of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) of 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company. /s/ James G. Musser - -------------------------- James G. Musser Chief Executive Officer July 2, 2003 EX-99.2 4 k78063exv99w2.txt SEC. 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 of THE SARBANES-OXLEY ACT OF 2002 In connection with the quarterly report of KnuSaga Corporation ("KnuSaga") on Form 10-QSB for the period ending May 31, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Jerry Luptak, Vice President, Finance, General Counsel, and Chief Financial Officer of KnuSaga, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) of 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly represents, the financial condition and result of operations of the Company. /s/ Jerry Luptak - -------------------------- Jerry Luptak Chief Financial Officer July 2, 2003 -----END PRIVACY-ENHANCED MESSAGE-----