-----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, GsYIbzMdXKGvy5PdQgt2ke4fruaKbKEIcCmpl1pw6hlCJ/oDxYnob2TY8lHMXKPH AOhgUmV54ue01YSyvqlv8g== 0000950124-99-000748.txt : 19990208 0000950124-99-000748.hdr.sgml : 19990208 ACCESSION NUMBER: 0000950124-99-000748 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19990205 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: 99522170 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 FORM 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 May 31, 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 6% in the third quarter of the fiscal year ending August 1998 compared to the same quarter a year ago. In the tubing sector of the Registrant's business, the Ford Kentucky Truck Plant historically accounted for 75% of sales. At that plant Ford operated two assembly lines which received tubing from the Registrant, one for Medium Trucks and the second for Heavy Trucks. In November of 1997 Ford discontinued production of Medium Trucks at the plant. Ford resumed production of Medium Trucks in Mexico during the current quarter but at reduced rates compared to the former Kentucky truck plant. December of 1997 Ford also discontinued production of Heavy Trucks at the Kentucky plant and sold the Heavy Truck business to Freightliner Corporation. Freightliner resumed production of the former Ford Heavy Duty Truck at their St. Thomas, Ontario Plant during the current quarter but also at substantially lower rates than formerly produced at Ford's Kentucky Plant. As a result shipments of tubing decreased $1,286,753 during the current quarter compared to a year ago. It is not expected that Ford will increase production in Mexico to former levels until the new Medium Truck begins production in March 1999. Freightliner is expected to reach the same production rate as the former Kentucky Truck plant by the end of December 1998. In the month of January 1998, Knusaga Corporation purchased a six-way power seat track line of business from ITT. This new business produced $1,136,337 of sales in the current quarter, largely offsetting the decline in tubing sales. Gross profits from operations decreased to a negative $134,697 due to unabsorbed overhead from the low sales volume in the tubing sector of the registrant's business. In spite of the new seat track activity Selling and Administrative expenses decreased 11% because of expense reductions in the tubing sector. Net income decreased to a negative $87,812 for the quarter as compared to a positive $453,686 for the previous year. The profit in the year ago quarter was inflated by a $350,000 settlement from Chrysler for a discontinued business. LIQUIDITY AND SOURCES OF CAPITAL - -------------------------------- The company's operations consumed $534,412 of cash during the current quarter as a result of losses in the tubing sector and a build up of receivables and inventory in the seat track business. This cash requirement was financed primarily by short term borrowings. 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) MAY 31, 1998
ASSETS May 31, 1998 CASH $ 5,291 ACCOUNTS RECEIVABLE $1,085,992 NOTES RECEIVABLE $ 94,143 INVENTORIES $ 626,241 PREPAID EXPENSE $ 331,820 ---------- TOTAL CURRENT ASSETS $2,136,795 NET PROPERTY, PLANT AND EQUIPMENT $2,389,742 OTHER ASSETS $ 22,861 ---------- TOTAL ASSETS $4,549,398 LIABILITIES ACCOUNTS PAYABLE $ 839,845 NOTES PAYABLE $ 935,728 ACCRUED LIABILITIES $ 68,329 ---------- TOTAL CURRENT LIABILITIES $1,843,902 LONG TERM DEBT $1,535,879 ---------- TOTAL LIABILITIES $3,379,781 STOCKHOLDERS EQUITY (DEFICIENCY) Common Stock, par value $.01 per share authorized $ 70,000 7,000,000 shares issued and outstanding. Preferred stock, par value $.01 per share $ 175,000 authorized 500,000 shares, issued and outstanding 175,000 of Class A $1.00 stated value, 4% non-cumulative, non-voting. ADDITIONAL PAID-IN CAPITAL $ 366,365 RETAINED EARNINGS $ 558,252 ---------- TOTAL STOCKHOLDERS EQUITY $1,169,617 ---------- TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $4,549,398
-3- 4 KNUSAGA CORPORATION STATEMENT OF INCOME (UNAUDITED) THREE MONTHS ENDED MAY 31, 1998 AND MAY 31, 1997
(UNAUDITED) (UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED MAY 31, 1998 MAY 31, 1997 MAY 31, 1998 MAY 31, 1997 NET SALES $2,338,038 $2,488,274 $6,490,276 $6,999,126 COST OF GOODS SOLD $2,171,239 $1,828,113 $5,787,284 $5,563,302 ---------- ---------- ---------- ---------- GROSS PROFIT $ 166,799 $ 660,161 $ 702,992 $1,435,824 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $ 254,685 $ 287,162 $ 743,255 $ 697,995 MISC. INCOME (EXPENSE) ($ 46,817) $ 320,522 ($ 120,539) $ 205,156 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE TAXES ($ 134,697) $ 693,521 ($ 160,802) $ 942,985 PROVISION FOR FEDERAL INCOME TAXES ($ 46,885) $ 239,835 ($ 50,810) $ 320,535 ---------- ---------- ---------- ---------- NET INCOME BEFORE EXTRAORDINARY ITEMS ($ 87,812) $ 453,686 ($ 109,992) $ 622,450 EXTRAORDINARY ITEMS: WRITE OFF R S HUGHES IND. TAX BENEFIT OF OPERATING LOSS CARRYFORWARD __________ __________ __________ __________ NET INCOME ($ 87,812) $ 453,686 ($ 109,992) $ 622,450 PAR SHARE OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: NET INCOME (LOSS) FROM OPERATIONS PER SHARE (0.01) 0.07 (0.02) 0.09 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) THREE MONTHS ENDED MAY 31, 1997 AND MAY 31, 1998
(UNAUDITED) THREE MONTHS ENDED MAY 31, 1998 MAY 31, 1997 CASH PROVIDED BY (USED FOR) OPERATIONS NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS, NON-CASH ($ 87,812) $622,448 EXPENSE INCLUDED IN NET INCOME DEPRECIATION $ 82,686 $155,287 (INCREASE) DECREASE IN: ACCOUNTS RECEIVABLE ($386,744) ($329,258) INVENTORIES $ 42,941 $ 953 PREPAID EXPENSES ($ 69,362) $ 41,790 OTHER ASSETS $ 61,010 INCREASE (DECREASE) IN: ACCOUNTS PAYABLE ($ 85,222) $ 58,927 ACCRUED LIABILITIES $ 21,621 $141,256 -------- -------- NET CASH PROVIDED BY (USED FOR) ($481,390) $752,413 OPERATING ACTIVITIES CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES PURCHASES OF EQUIPMENT $ 53,023 ($125,442) -------- NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES CASH PROVIDED BY (USED FOR) BEFORE ($534,412) $626,971 FINANCING ACTIVITIES CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES DEBT INCREASE (DECREASE) SHORT-TERM $505,579 ($420,000) LONG-TERM $ 25,579 ($202,750) -------- -------- NET CASH PROVIDED BY (USED FOR) $531,158 ($622,750) FINANCING ACTIVITIES INCREASE (DECREASE) IN CASH ($ 3,254) $ 4,221 BALANCE AT BEGINNING OF PERIOD $ 8,473 $ 34,020 BALANCE AT END OF PERIOD $ 5,219 $ 38,241
-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: December 23, 1998 BY: /s/ James G. Musser ------------------- James G. Musser President 7 INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ------- --- ----------- Ex-27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS AUG-31-1998 MAR-01-1998 MAY-31-1998 5,291 0 1,085,992 0 629,622 2,136,795 3,630,722 1,240,981 4,549,398 1,843,902 868,814 0 175,000 70,000 924,617 4,549,398 6,490,276 6,490,276 5,787,284 6,530,539 1,964 0 48,775 (160,802) (50,810) (109,992) 0 0 0 (109,992) .00 .00
-----END PRIVACY-ENHANCED MESSAGE-----