-----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, JpsyDKpuyyhgBYRPT97W3ZadM/QFeoM/5uZYZWdwRKIGMyCWXofK5oXWNd1jLXjD Z+lPCJRhwCb2+9Q7O1H94A== 0000950124-98-002281.txt : 19980424 0000950124-98-002281.hdr.sgml : 19980424 ACCESSION NUMBER: 0000950124-98-002281 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980422 SROS: NASD 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: SEC FILE NUMBER: 000-07795 FILM NUMBER: 98598815 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 10QSB 1 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 February 28, 1998 Commission File Number 0-7795 KNUSAGA CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE (State or other jurisdiction of incorporation or organization) 62-1004034 (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 $.01, outstanding: 7,000,000. -1- 2 RESULTS OF OPERATIONS Net Sales decreased 54% in the second quarter of fiscal year ending August 1998 to $1,163,433. The majority of this sales decrease is due to our largest customer, Ford Truck Division, Louisville, Kentucky, shutting down the production of their HN-80 lines of heavy-duty trucks at the end of December 1997. Freightliner Corporation purchased the vehicle line from Ford Motor Company. Freightliner's intention is to use the months of January 1998 - March 1998 to transfer necessary equipment from Louisville, Kentucky to their plant in St. Thomas, Ontario, and make all necessary adjustments at that facility in order to produce the new product line. They are forecasting production to begin in the second half of April 1998. All current vendors of the HN-80 line at Ford Truck Division will be retained by Freightliner. In the month of January 1998, Knusaga Corporation purchased a six-way power seat track line of business from ITT for $315,000. The customer base for this product line is mainly the motor home industry serviced by independent distributors. In the first year of operation, we are projecting $3,500,000 of sales. Gross profits from operations decreased to a negative $243,973. This is partially attributable to fixed costs remaining constant with the severe reduction in sales volume. Also, during this period, the plant machine lay-out was drastically changed from a batch and que processing method to a work cell concept at a cost of $130,000. Selling and Administrative expenses increased to 21% of sales during the quarter as compared to 9% for the year earlier period. The increased percentage is attributable to fixed costs remaining constant as compared to the reduced sales volume. Net income decreased to a negative $349,641 for the quarter as compared to a positive $155,108 for the previous year. The significant decrease in net income is the result of lower sales and production volumes due to the purchase of the HN-80 line of trucks by Freightliner from Ford Truck causing the three month delay of shipments for this product line. LIQUIDITY AND SOURCES OF CAPITAL The company's cash flow generated $106,002 from operating activities. The purchase of the seat track product line and other machinery requirements totaling $407,860 was financed from cash flow and bank borrowing of $326,565 resulting in a $7,761 decrease in our cash balance. CONTINGENT MATTERS There are no contingencies or consequential uncertainties known that will materially affect the financial information as presented. -2- 3 KNUSAGA CORPORATION BALANCE SHEET (UNAUDITED) FEBRUARY 28, 1998
ASSETS February 28, 1998 CASH $ 8,473 ACCOUNTS RECEIVABLE $ 699,248 NOTES RECEIVABLE $ 94,143 INVENTORIES $ 662,564 PREPAID EXPENSE $ 181,365 ---------- TOTAL CURRENT ASSETS $1,645,793 NET PROPERTY, PLANT AND EQUIPMENT $2,419,405 OTHER ASSETS $ 23,362 ---------- TOTAL ASSETS $4,088,560 LIABILITIES ACCOUNTS PAYABLE $ 870,012 NOTES PAYABLE $ 413,320 ACCRUED LIABILITIES $ 49,694 ---------- TOTAL CURRENT LIABILITIES $1,333,026 LONG TERM DEBT $1,498,105 ---------- TOTAL LIABILITIES $2,831,131 STOCKHOLDERS EQUITY (DEFICIENCY) Common Stock, par value $.01 per share authorized 7,000,000 shares issued and outstanding. $ 70,000 Preferred stock, par value $.01 per share authorized 500,000 shares, issued and outstanding 175,000 of Class A $1.00 stated value, 4% non-cumulative, non-voting. $ 175,000 ADDITIONAL PAID-IN CAPITAL $ 366,365 RETAINED EARNINGS $ 646,064 ---------- TOTAL STOCKHOLDERS EQUITY $1,257,429 ---------- TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $4,088,560
-3- 4 KNUSAGA CORPORATION STATEMENT OF INCOME (UNAUDITED) THREE MONTHS ENDED FEBRUARY 28, 1998 AND FEBRUARY 28, 1997
(UNAUDITED) (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED FEB. 28, 1998 FEB. 28, 1997 FEB. 28, 1998 FEB. 28, 1997 NET SALES $1,163,433 $2,539,739 $4,152,237 $4,510,852 COST OF GOODS SOLD $1,407,406 $2,018,725 $3,616,044 $3,735,189 ------------- ------------------ ------------- ------------- GROSS PROFIT ($ 243,973) $ 521,014 $ 536,193 $ 775,663 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $ 250,366 $ 222,706 $ 488,570 $ 410,833 MISC. INCOME (EXPENSE) ($ 29,422) ($ 65,000) ($ 73,728) ($ 115,366) ------------- ------------------ ------------- ------------- INCOME (LOSS) BEFORE TAXES ($ 523,761) $ 233,308 ($ 26,105) $ 249,464 PROVISION FOR FEDERAL INCOME TAXES ($ 174,120) $ 78,200 ($ 3,925) $ 80,700 ------------- ------------------ ------------- ------------- NET INCOME BEFORE EXTRAORDINARY ITEMS ($ 349,641) $ 155,108 ($ 22,180) $ 168,764 EXTRAORDINARY ITEMS: WRITE OFF R S HUGHES IND. TAX BENEFIT OF OPERATING LOSS CARRYFORWARD ------------- ------------------ ------------- ------------- NET INCOME ($ 349,641) $ 155,108 ($ 22,180) $ 168,764 PAR SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: NET INCOME (LOSS) FROM OPERATIONS PER SHARE 0.00 0.03 0.00 0.03 CASH DIVIDENDS NONE NONE NONE NONE AVERAGE OUTSTANDING SHARES 7,000,000 7,000,000 7,000,000 7,000,000
THE FINANCIAL STATEMENTS INCLUDED IN THIS REPORT REFLECT ALL ADJUSTMENTS, WHICH, IN THE OPINION OF MANAGEMENT, ARE NECESSARY FOR FAIR PRESENTATION. -4- 5 KNUSAGA CORPORATION STATEMENT OF CASH FLOW (UNAUDITED) SIX MONTHS ENDED FEBRUARY 28, 1997 AND FEBRUARY 28, 1998
(UNAUDITED) THREE MONTHS ENDED FEBRUARY 28, 1998 FEBRUARY 28, 1997 CASH PROVIDED BY (USED FOR) OPERATIONS NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS, NON-CASH EXPENSE INCLUDED IN NET INCOME ($349,641) $168,762 DEPRECIATION $ 78,187 $103,525 (INCREASE) DECREASE IN: ACCOUNTS RECEIVABLE $655,381 ($417,310) INVENTORIES ($189,220) ($ 306) PREPAID EXPENSES ($ 87,053) $113,412 OTHER ASSETS ($ 20,716) ($ 3,001) INCREASE (DECREASE) IN: ACCOUNTS PAYABLE $299,784 $129,292 ACCRUED LIABILITIES ($280,720) $ 83,632 ------------ ------------- NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES $106,002 $178,006 CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES PURCHASES OF EQUIPMENT ($407,860) ($106,751) ------------- NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES ($407,860) ($106,751) ------------ CASH PROVIDED BY (USED FOR) BEFORE FINANCING ACTIVITIES $301,858 $ 71,255 CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES DEBT INCREASE (DECREASE) SHORT-TERM $ 70,000 $ 85,000 LONG-TERM $256,565 ($161,495) ------------ ------------- NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES $326,565 ($ 76,495) INCREASE (DECREASE) IN CASH $ 24,707 ($ 5,240) BALANCE AT BEGINNING OF PERIOD $ 16,234 $ 34,020 BALANCE AT END OF PERIOD $ 8,473 $ 28,780
-5- 6 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. KNUSAGA CORPORATION Dated: April 22, 1998 BY: /s/ Gerald Warzynski -------------------- Gerald Warzynski Chief Financial Officer 7 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ------------ ----------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS AUG-31-1998 SEP-01-1997 FEB-28-1998 8,473 0 793,391 0 662,564 1,645,793 3,577,700 1,158,295 4,088,560 1,333,026 868,814 0 175,000 70,000 1,012,429 4,088,560 4,152,237 4,154,172 3,616,044 4,104,614 1,208 0 74,935 (26,105) (3,925) (22,180) 0 0 0 (22,180) .00 .00
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