-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, UGyp0uEziNEdYaZgd7TkTWtwDZ3GlcpQIj11b0/hFSWXO2ZcDPriS2ywJc+/zD68 Tg5TeAEPCT9+3EjjAYWfLw== 0000056151-95-000003.txt : 19950608 0000056151-95-000003.hdr.sgml : 19950608 ACCESSION NUMBER: 0000056151-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950607 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: KIT MANUFACTURING CO CENTRAL INDEX KEY: 0000056151 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS TRANSPORTATION EQUIPMENT [3790] IRS NUMBER: 951525261 STATE OF INCORPORATION: CA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06257 FILM NUMBER: 95545442 BUSINESS ADDRESS: STREET 1: 530 E WARDLOW RD STREET 2: P O BOX 848 CITY: LONG BEACH STATE: CA ZIP: 90801 BUSINESS PHONE: 3105957451 MAIL ADDRESS: STREET 1: 530 EAST WARDLOW ROAD CITY: LONG BEACH STATE: CA ZIP: 90801 10-Q 1 FORM 10-Q FOR 2ND QTR 1995 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended April 30, 1995 Commission file number 2-31520 KIT MANUFACTURING COMPANY (Exact name of registrant as specified in its charter) California 95-1525261 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 530 East Wardlow Road, P.O. Box 848, Long Beach, California 90801 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 595-7451 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 close of the period covered by this report. Common Stock (no par value), 1,110,934 shares outstanding as of April 30, 1995. Index to Exhibits - Page 11 1 of 11 Pages - -------------------------------------------------------------------------------- PART I FINANCIAL INFORMATION - 2 - - -------------------------------------------------------------------------------- KIT MANUFACTURING STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended Six Months Ended April 30, April 30, 1995 1994 1995 1994 Sales $26,425 $24,996 $48,276 $40,297 Costs and expenses Cost of sales 23,662 22,071 43,305 35,474 Selling, general and administrative 2,142 2,272 3,935 3,721 ------ ------ ------ ------ 25,804 24,343 47,240 39,195 Operating income 621 653 1,036 1,102 Other income (expense) Proceeds from business interruption claim 501 501 (Note I) Interest income (expense), net 14 (43) 43 (26) ------ ------ ------ ------ Income before income taxes 1,136 610 1,580 1,076 Provision for income taxes (Note A) 462 255 644 446 ------ ------ ------ ------ Net income $674 $355 $936 $630 ====== ====== ====== ====== Weighted average shares outstanding (Note B) 1,110,934 1,110,93 1,110,934 1,245,476 ========= ======== ========= ========= Net income per share (Note B) $0.61 $0.32 $0.84 $0.51 ===== ===== ===== ===== Dividends per share $ - $ - $ - $ - ====== ====== ====== ====== The accompanying notes are an integral part of these financial statements -3-
- -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY BALANCE SHEETS (Dollars in thousands)
April October 1995 1994 ASSETS (Unaudited) Cash and cash $1,000 $4,625 Accounts receivable, net 6,334 5,564 Notes and other receivables 375 577 Inventories: Raw materials 3,629 2,317 Work in process 1,096 1,038 Finished goods 3,956 737 ------ ------ Total inventories 8,681 4,092 Prepaids and deferred income 1,212 1,190 ------ ------ Total current assets 17,602 16,048 Property, plant and equipment 5,848 5,762 Other assets 149 81 ------ ------ Total assets $23,599 $21,891 ====== ====== LIABILITIES AND SHAREHOLDERS' Note payable to bank $1,100 Accounts payable 4,809 $4,486 Accrued payroll and related 1,786 2,005 Accrued marketing programs 140 592 Accrued expenses 1,050 1,185 Income taxes payable 313 158 ------ ------ Total current liabilities 9,198 8,426 Deferred income taxes 1,308 1,308 ------ ------ Total liabilities 10,506 9,734 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, issued and outstanding 1,110,934 shares 1,592 1,592 Retained earnings: Balance at beginning of period 10,565 8,674 Net income for period 936 1,891 ------ ------ Balance at end of period 11,501 10,565 ------ ------ Total shareholders' equity 13,093 12,157 ------ ------ Total liabilities and shareholders' equity $23,599 $21,891 ====== ====== The accompanying notes are an integral part of these financial statements -4-
- -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
For the six months April 30, 1995 1994 Cash flows from operating activities: Cash received from customers $47,708 $37,015 Interest received 59 70 ------ ------ Cash received from operations 47,767 37,085 ------ ------ Cash paid to suppliers and employees 52,040 43,524 Interest paid 16 95 Income taxes paid 487 363 ------ ------ Cash disbursed for operations 52,543 43,982 ------ ------ Net cash used in operating activities (4,776) (6,897) ------ ------ Cash flows from investing activities: Purchase of property, plant and equipment (398) (355) Changes in other current and non-current assets (52) (1,762) ------ ------ Net cash used in investing activities (450) (2,117) ------ ------ Cash flows from financing activities: Funds used to repurchase common stock (3,615) Proceeds from business interruption claim 501 Proceeds from line-of-credit borrowings 2,100 9,500 Principal payments on line-of-credit borrowings (1,000) (4,300) ------ ------ Net cash provided by financing activities 1,601 1,585 ------ ------ Net decrease in cash (3,625) (7,429) Cash at beginning of year 4,625 8,484 ------ ------ Cash at end of period $1,000 $1,055 ====== ====== - ---------------------------------------------------------------------------------- Reconciliation of net income to net cash used in operating activities: Net income $936 $630 Adjustments to reconcile net income to net cash used in operating activities: Proceeds from business interruption claim (501) Depreciation 275 199 Increase in accounts receivable (568) (3,282) Increase in inventories (4,589) (4,843) (Decrease)increase in accounts payable and accrued liabilities (485) 316 Increase in income taxes payable 156 83 ------ ------ Net cash used in operating activities ($4,776) ($6,897) ====== ====== The accompanying notes are an integral part of these financial statements -5-
- -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Note A - The provision or benefit for income taxes is calculated using the Company's estimated annual effective tax rate. Note B - Per share amounts are based on the weighted average number of common shares outstanding. Common stock equivalents have not been included in the computations because their effect would not be dilutive. Note C - During the period reported on, there were no sales of securities. Note D - In the opinion of management, all material adjustments which are necessary for a fair statement of financial position, results of operations and cash flows have been included in these financial statements. Note E - The results of the period are not necessarily indicative of annual results due to seasonality of the business. Note F - Financial information contained herein is unaudited. Note G - The Company is contingently liable to various financial institutions on repurchase agreements in connection with wholesale inventory financing. In general, inventory is repurchased by the Company upon default by a dealer with a financing institution and then resold through normal distribution channels. In addition, the Company is contingently liable to financial institutions for letters of credit which were established to satisfy the self-insured workers' compensation regulations of the states in which the Company conducts manufacturing operations. Management does not expect that losses, if any, from the contingencies described above will be of material importance to the financial condition or earnings of the Company. Note H - During the first quarter of fiscal 1994, the Company repurchased 361,455 shares of common stock for $10.00 per share from the family of one of the founders of KIT who died in 1989. Note I - During the second quarter of fiscal 1995, the Company received $501,000 in insurance proceeds on a business interruption claim relative to the 1992 tornado damage at the McPherson, Kansas manufactured housing facility. - 6 - - -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION -APRIL 30, 1995 COMPARED TO OCTOBER 31, 1994 Under second quarter market conditions, the Company borrowed on its line of credit to increase inventory levels to provide for anticipated second quarter seasonal sales. The Company's working capital increased $458,000 due primarily to an increase in inventories and an increase in accounts receivable due to an increase in sales. The current ratio decreased to 1.8:1 at April 30, 1995 in comparison to 1.9:1 at October 31, 1994. The Company's liquidity position as reflected in the current ratio described above, capital resources, including excess plant capacity, working capital, and line of credit, are considered to be adequate to provide for near term anticipated growth. RESULTS OF OPERATIONS - QUARTER ENDED APRIL 30, 1995 COMPARED TO QUARTER ENDED APRIL 30, 1994 Total sales for the quarter ended April 30, 1995 were $26,425,000, a six percent increase from sales of $24,996,000 for the same quarter of the prior year. The increase consisted of a nine percent decrease in manufactured housing sales and a 11 percent increase in recreational vehicle sales. RV sales saw an increase as a result of demand for the entry-level RV product. However, Western regional RV sales are down due to a general economic slow-down during the normally high volume second quarter selling season. The manufactured housing sales decrease was the result of a general slowing in the housing market in the Northwestern sales region, including site built and manufactured homes, as well as an increase in consumer interest rates which negatively affect sales of high-end homes. Cost of sales increased seven percent from the same quarter of the prior year due primarily to the six percent increase in sales volume, and increased less than two percent as a percent of sales. The decline in gross profit margins is chiefly attributed to production costs at our new manufactured housing production facility and sales of lower margin recreational vehicles. Selling, general and administrative expenses decreased six percent over the same quarter of the prior year and declined one percent as a percent of sales. The decrease was due in large part to cost saving measures instituted by the Company in the areas of marketing and administrative expenses. Net interest income for the current quarter as opposed to net interest expense in the same quarter of the prior year, increased 132 percent. This was a consequence of a significant decrease in the average net short-term borrowings. In the first quarter of 1994, the Company used its available cash to expand its plant facilities and repurchase its common stock thereby increasing its average short-term borrowings. Net income for the three months ended April 30, 1995 was $674,000, or $0.61 per share, compared to net income of $355,000, or $0.32 per weighted average share, for the same quarter of the prior year. Net income for the quarter ended April 30, 1995 included an after tax gain on a business interruption claim of $301,000, or $0.27 per share. -7- - -------------------------------------------------------------------------------- RESULTS OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 1995 COMPARED TO SIX MONTHS ENDED APRIL 30, 1994 Total sales for the six months ended April 30, 1995 were $48,276,000, a 20 percent increase from sales of $40,297,000 for the same quarter of the prior year. The increase consisted of a 17 percent increase in manufactured housing sales and a 21 percent increase in recreational vehicle sales. RV sales in the Midwestern region saw an increase as a result of consumer demand for our entry-level RV product. The Western region recreational vehicle sales are up for the six months due to increased demand in both the low-end and mid-price point markets. However, the Western sales region has experienced a decline in sales during the normally high volume second quarter selling season primarily due to a general slowdown in economic conditions which has curbed retail buying. The manufactured housing sales increase was chiefly the result of an increase in manufacturing capacity from the new production facility in Caldwell, Idaho. However, during the latter half of the six month period, sales of manufactured homes have declined due to a general slowing in the housing market, including site built and manufactured homes. In addition, increases in consumer interest rates, negatively affected sales of high-end homes. Cost of sales increased 22 percent from the same period of the prior year due principally to the 20 percent increase in sales volume, and increased less than two percent as a percent of sales. The decline in gross profit margins is chiefly attributed to production costs at the new manufactured housing production facility not offset by an increase in sales and increased sales of lower margin recreational vehicles. Selling, general and administrative expenses increased six percent over the same period of the prior year due to the increase in unit sales but declined one percent as a percent of sales. The decrease was due in large part to cost saving measures instituted by the Company in the areas of marketing and administrative expenses. Net interest income for the current quarter as opposed to net interest expense in the same period of the prior year, increased 265 percent. This was a consequence of a significant decrease in the average net short-term borrowings. In the first six months of 1994, the Company used its available cash to expand its plant facilities and repurchase its common stock thereby increasing its average short-term borrowings. Net income for the six months ended April 30, 1995 was $936,000, or $0.84 per share, compared to net income of $630,000, or $0.51 per weighted average share, for the same period of the prior year. Net income for the six months ended April 30, 1995 included an after-tax gain from a business interruption claim of $301,000, or $0.27 per share. -8- - -------------------------------------------------------------------------------- PART II OTHER INFORMATION Item 6 (a). See Index to Exhibits on page 11. Item 6 (b). Form 8-K was not required to be filed during the quarter ended April 30, 1995. - 9 - - -------------------------------------------------------------------------------- Pursuant to the requirements 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. KIT MANUFACTURING COMPANY (Registrant) DATE June 6, 1995 /s/ Dan Pocapalia ------------ ------------------------------------- Dan Pocapalia Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) DATE June 6, 1995 /s/ Dale J. Gonzalez ------------ -------------------------------------- Dale J. Gonzalez Senior Vice President and Treasurer (Principal Financial and Accounting Officer -10- - -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY INDEX TO EXHIBITS Item: (27) Financial Data Schedule -11- - -------------------------------------------------------------------------------- EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from SEC Form 10Q and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS OCT-31-1995 APR-30-1995 1000 0 6753 44 8681 17602 10496 4648 23599 9522 0 1592 0 0 11501 23599 26425 26425 23662 23662 1619 0 8 1136 462 674 0 0 0 674 .61 0
-----END PRIVACY-ENHANCED MESSAGE-----