-----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, BTPsluoOeh1nbEWEviY0xqqtMwnpnY6F3wVVY/IyNdCdZHNRbR9Hqif2TkH07gv5 Tzjit1qnD+zhyN20YzwGeA== 0000056151-96-000006.txt : 19960906 0000056151-96-000006.hdr.sgml : 19960906 ACCESSION NUMBER: 0000056151-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960905 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: 96625806 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 July 31, 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 July 31, 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 Nine Months Ended July 31, July 31,
1996 1995 1996 1995 Sales $23,924 $27,537 $70,575 $75,813 Costs and Cost of sales 20,718 25,236 61,965 68,541 Selling, general and administrative 2,413 2,027 6,939 5,965 23,131 27,263 68,904 74,506 Operating income 793 274 1,671 1,307 Other income (expense) Proceeds from business interruption claim 610 200 610 701 (Note I) Interest income (expense), net 12 (7) (15) 36 Income before income taxes 1,415 467 2,266 2,044 Provision for income taxes (Note A) 589 194 929 838 Net income $826 $273 $1,337 $1,206 Weighted average shares (Note B) 1,110,934 1,110,93 1,110,9 1,110,9 Net income per share (Note B) $0.74 $0.25 $1.20 $1.09 Dividends per share $ - $ - $ $ The accompanying notes are an integral part of these financial statements -3-
______________________________________________________________________________ KIT MANUFACTURING COMPANY BALANCE SHEETS (Dollars in thousands) July 31 October
1996 1995 ASSETS (Unaudited) Cash and cash investments $2,924 $2,218 Accounts receivable, net 5,150 7,350 Inventories: Raw 4,118 2,543 Work in process 1,178 1,055 Finished goods 4,496 2,069 Total inventories 9,792 5,667 Prepaids and deferred income 1,039 1,589 Total current assets 18,905 16,824 Property, plant and equipment, net 6,136 6,388 Other assets 258 90 Total assets $25,299 $23,302 LIABILITIES AND SHAREHOLDERS' EQUITY Note payable to bank $1,100 Accounts payable 3,612 $3,954 Accrued payroll and related 1,869 2,203 Accrued marketing programs 648 741 Accrued expenses 1,513 1,309 Income taxes payable 315 190 Total current liabilities 9,057 8,397 Deferred income taxes 1,399 1,399 Total liabilities 10,456 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 period 11,914 10,565 Net income for period 1,337 1,349 Balance at end of period 13,251 11,914 Total shareholders' equity 14,843 13,506 Total liabilities and shareholders' equity $25,299 $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 nine months ended July 31,
1996 1995 Cash flows from operating activities: Cash received from customers $72,974 $74,392 Interest received 28 75 Cash received from operations 73,002 74,467 Cash paid to suppliers and employees 72,977 77,998 Interest paid 43 39 Income taxes paid 802 809 Cash disbursed for operations 73,822 78,846 Net cash used in operating activities (820) (4,379) Cash flows from investing activities: Purchase of property, plant and equipment (252) (764) Changes in other current and non-current assets 68 (374) Net cash used in investing activities (184) (1,138) Cash flows from financing activities: Proceeds from business interruption claim 610 701 Proceeds from line-of-credit borrowings 2,700 2,800 Principal payments on line-of-credit borrowings (1,600) (1,800) Net cash provided by financing activities 1,710 1,701 Net increase (decrease) in cash 706 (3,816) Cash at beginning of year 2,218 4,625 Cash at end of period $2,924 $809 Reconciliation of net income to net cash used in operating activities: Net income $1,337 $1,206 Adjustments to reconcile net income to net cash used in operating activities: Proceeds from business interruption (610) (701) Depreciation 495 431 Decrease (increase) in accounts 2,197 (1,616) Increase in inventories (4,124) (3,163) Decrease in accounts payable and accrued (242) (565) Increase in income taxes payable 127 29 Net cash used in operating activities ($820) ($4,379) 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 third quarter of fiscal 1995 and 1996, the Company received $200,000 and $610,000 in insurance proceeds, respectively, 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 -JULY 31, 1996 COMPARED TO OCTOBER 31, 1995 Under third quarter market conditions, the Company continued to borrow on its line of credit to maintain inventory levels to provide for third quarter sales. The Company's working capital increased $1,421,000 due primarily to an increase in inventories. The current ratio was 2.1:1 at July 31, 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 JULY 31, 1996 COMPARED TO QUARTER ENDED JULY 31, 1995 Total sales for the quarter ended July 31, 1996 were $23,924,000, a 13 percent decrease from sales of $27,537,000 for the same quarter of the prior year. The decrease consisted of a 5 percent decrease in recreational vehicle sales and a decrease of 33 percent in manufactured housing sales. RV sales saw a decrease as a result of a decline in dealer inventories as they adjusted for a moderate slowing in retail demand. Manufactured housing sales are continuing to experience a general slowing in our market territory. Cost of sales decreased 18 percent from the same quarter of the prior year due primarily to the 13 percent decrease in sales volume, but also decreased 5 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 19 percent over the same quarter of the prior year and rose three percent as a percent of sales. The increase was due to an increase in marketing costs. Net interest income as opposed to net interest expense for the current quarter increased nearly three times. This was a consequence of a significant increase in the average net short-term investments. Net income for the three months ended July 31, 1996 was $826,000, or $0.74 per share, compared to $273,000, or $0.25 per share, for the same quarter of the prior year. Net income for the quarter ended July 31, 1996 included an after tax gain on a business interruption claim of $360,000, or $0.32 per share. Net income for the quarter ended July 31, 1995 included an after tax gain on a business interruption claim of $117,000, or $0.11 per share. -7- ______________________________________________________________________________ KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS - NINE MONTHS ENDED JULY 31, 1996 COMPARED TO NINE MONTHS ENDED JULY 31, 1995 Total sales for the nine months ended July 31, 1996 were $70,575,000, a seven percent decrease from sales of $75,813,000 for the same period of the prior year. The decrease consisted of a 35 percent decrease in manufactured housing sales and a four percent increase in recreational vehicle sales. RV sales in the Western region saw an increase as a result of consumer demand for our newest RV product. The manufactured housing sales decrease was chiefly the result of an overall slowing in our market territory. Cost of sales decreased 10 percent from the same period of the prior year due principally to the seven percent decrease in sales volume, and decreased three 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 16 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 142 percent. This was a consequence of a significant increase in the average net short-term borrowing. Net income for the nine months ended July 31, 1996 was $1,337,000, or $1.20 per share, compared to $1,206,000, or $1.09 per share, for the same period of the prior year. Net income for the nine months ended July 31, 1996 included an after-tax gain from a business interruption claim of $360,000, or $0.32 per share. Net income for the nine months ended July 31, 1995 included an after-tax gain from a business interruption claim of $414,000, or $0.37 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 July 31, 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 September 4, 1996 /s/ Dan Pocapalia Dan Pocapalia Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) DATE September 4, 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. 9-MOS OCT-31-1996 JUL-31-1996 2,924,000 0 5,186,000 36,000 9,792,000 18,905,000 11,534,000 5,398,000 25,299,000 9,057,000 0 0 0 1,592,000 0 25,299,000 70,575,000 70,575,000 61,965,000 68,309,000 0 0 43,000 2,266,000 929,000 1,337,000 0 0 0 1,337,000 1.20 1.20
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