-----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, ETSy+gXgpx3qzevsxz/sIObb7veWK1/iZH8y8UmVBg1GFD5EHpd/iRjOO5PDYO5s h5ab9oFag5aBcfVXAN2+9w== 0000056151-96-000004.txt : 19960613 0000056151-96-000004.hdr.sgml : 19960613 ACCESSION NUMBER: 0000056151-96-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960430 FILED AS OF DATE: 19960610 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: 96578774 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 10Q 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, 1996 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, 1996. 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, 1996 1995 1996 1995
Sales $28,679 $26,425 $46,650 $48,276 Costs and Cost of sales 25,229 23,662 41,246 43,305 Selling, general and administrative 2,585 2,142 4,527 3,935 27,814 25,804 45,773 47,240 Operating income 865 621 877 1,036 Other income Proceeds from business 501 501 (Note Interest income (26) 14 (26) 43 Income before income taxes 839 1,136 851 1,580 Provision for income taxes 336 462 340 644 Net income $503 $674 $511 $936 (Note A) Weighted average shares 1,110,934 1,110,93 1,110,9 1,110,9 (Note B) Net income per share $0.45 $0.61 $0.46 $0.84 (Note B) 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 1996 1995 (Unaudited) ASSETS Cash and cash investments $2,802 $2,218 Accounts receivable, net 7,851 7,350 Inventories: Raw Material 3,303 2,543 Work in Process 1,127 1,055 Finished goods 3,185 2,069 Total inventories 7,615 5,667 Prepaids and deferred income taxes 1,161 1,589 Total current assets 19,429 16,824 Property, plant and 6,182 6,388 Other assets 236 90 Total assets $25,847 $23,302 LIABILITIES AND SHAREHOLDERS' Note payable to bank $1,000 Accounts payable 5,655 $3,954 Accrued payroll and related 1,881 2,203 Accrued marketing programs 368 741 Accrued expenses 1,254 1,309 Income taxes payable 273 190 Total current liabilities 10,431 8,397 Deferred income taxes 1,399 1,399 Total liabilities 11,830 9,796 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 11,914 10,565 Net income for period 511 1,349 Balance at end of period 12,425 11,914 Total shareholders' 14,017 13,506 Total liabilities and shareholders' equity $25,847 $23,302 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, 1996 1995 Cash flows from operating activities: Cash received from customers $46,14 $47,708 Interest received 14 59 Cash received from operations 46,163 47,767 Cash paid to suppliers and employees 46,114 52,038 Interest paid 41 16 Income taxes paid 317 489 Cash disbursed for operations 46,472 52,543 Net cash used in operating activities (309) (4,776) Net cash used in operating activities Cash flows from investing activities: Purchase of property, plant and equipment (135) (398) Changes in other current and non-current assets 28 (52) Net cash used in investing activities (107) (450) Cash flows from financing activities: Proceeds from business interruption claim 0 501 Proceeds from line-of-credit borrowings 1,400 2,100 Principal payments on line-of-credit borrowings (400) (1,000) Net cash provided by financing activities 1,000 1,601 Net increase (decrease) in cash 584 (3,625) Net increase (decrease) in cash Cash at beginning of year 2,218 4,625 Cash at end of period $2,802 $1,000 Cash at end of period Reconciliation of net income to net cash used in Net income $511 $936 Adustments to reconcile net income to net cash used in operating activities: Proceeds from business interruption claim (501) Depreciation 332 275 Increase in accounts receivable (502) (568) Increase in inventories (1,948) (4,589) (Decrease) increase in accounts payable and 1,275 (485) Increase in income taxes payable 23 156 Net cash used in operating activities ($309) ($4,776) Net cash used in operating activities 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 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, 1996 COMPARED TO OCTOBER 31, 1995 Under second quarter market conditions, the Company continued to borrow on its line of credit to maintain inventory levels to provide for the second quarter increase in sales. The Company's working capital increased $571,000 due primarily to an increase in accounts receivable due to an increase in sales. The current ratio was 1.9:1 at April 30, 1996 and 2.0:1 at October 31, 1995. 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, 1996 COMPARED TO QUARTER ENDED APRIL 30, 1995 Total sales for the quarter ended April 30, 1996 were $28,679,000, a nine percent increase from sales of $26,425,000 for the same quarter of the prior year. The increase consisted of a 16 percent increase in recreational vehicle sales and a decrease of 18 percent in manufactured housing sales. RV sales saw an increase as a result of continued demand for the entry-level product as well as a significant contribution in sales of KIT s newest product line. Manufactured housing sales are continuing to experience a general slowing in our market territory. Cost of sales increased seven percent from the same quarter of the prior year due primarily to the nine percent increase in sales volume, but decreased two percent as a percent of sales. The increase in gross profit margins is chiefly attributed to lower overall production costs at our new recreational vehicle production facility and at our consolidated manufactured housing plant, both in Caldwell, Idaho. Selling, general and administrative expenses increased 21 percent over the same quarter of the prior year and rose one percent as a percent of sales. The increase was due to an increase in marketing costs. Net interest expense as opposed to net interest income for the current quarter increased nearly three times. This was a consequence of a significant increase in the average net short-term borrowing. Net income from operations for the three months ended April 30, 1996 was $503,000, or $0.45 per share, compared to $373,000, or $0.34 per 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- ________________________________________________________________________________ KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 1996 COMPARED TO SIX MONTHS ENDED APRIL 30, 1995 Total sales for the six months ended April 30, 1996 were $46,650,000, a three percent decrease from sales of $48,276,000 for the same quarter of the prior year. The decrease consisted of a 36 percent decrease in manufactured housing sales and a nine percent increase in recreational vehicle sales. RV sales in the Midwestern region saw an increase as a result of continued consumer demand for our entry-level RV product. The Western region recreational vehicle sales are up due to an increase in sales of our newest product line. The manufactured housing sales decrease was chiefly the result of an overall slowing in our market territory. Cost of sales decreased five percent from the same period of the prior year due principally to the three percent decrease in sales volume, and decreased one percent as a percent of sales. The rise in gross profit margins is chiefly attributed to reduced production costs at the new consolidated manufactured homes plant in Caldwell, Idaho. Selling, general and administrative expenses increased 15 percent over the same period of the prior year and rose two percent as a percent of sales. The increase was primarily due to increases in marketing costs. Net interest expense as opposed to net interest income in the same period of the prior year, increased 160 percent. This was a consequence of a significant increase in the average net short-term borrowing. Net income from operations for the six months ended April 30, 1996 was $511,000, or $.46 per share, compared to $635,000, or $0.57 per 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, 1996. - 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 10, 1996 /s/DAN POCAPALIA______ Dan Pocapalia Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) DATE JUNE 10, 1996 /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. 6-MOS OCT-31-1996 APR-30-1996 2,802,000 0 7,895,000 44,000 7,615,000 19,429,000 11,440,682 5,258,251 25,847,979 11,831,386 0 0 0 1,591,656 0 25,847,979 46,650,366 46,650,366 40,971,376 45,799,451 0 0 26,431 850,915 340,366 510,549 0 0 0 510,549 .46 .46
-----END PRIVACY-ENHANCED MESSAGE-----