-----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, B18OUW59aOXDGxZ9VZwzWqj0Dtvdnb7rheNfTIZFh/ACvVE6t9y7C2i8npknsfNZ lypaxlNquFe4JnGslnKwBQ== 0000056151-97-000001.txt : 19970131 0000056151-97-000001.hdr.sgml : 19970131 ACCESSION NUMBER: 0000056151-97-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19970130 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06257 FILM NUMBER: 97513822 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-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended October 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to . 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, Long Beach, California 90807 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (310) 595-7451 Securities registered pursuant to Section 12(b) of the Act: Title of class: Common Stock, no par value Name of each exchange on which registered: American Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The approximate aggregate market value of voting stock held by non-affiliates of Registrant was $7,062,208 as of January 10, 1997. 1,110,934 (Number of shares of Common Stock outstanding as of January 10, 1997) Certain information called for by Parts I, II and IV is incorporated by reference to the registrant's Annual Report to shareholders for the fiscal year ended October 31, 1996 and the information called for by Part III is incorporated by reference to the registrant's definitive proxy statement to be filed with the Commission within 120 days after October 31, 1996. The Index to Exhibits appears on page 16. 33 pages in total. 1 PART I Item 1. Business General General KIT Manufacturing Company ("Registrant") was incorporated in California in 1947, as the successor to a business founded in 1945. A description of Registrant's business during the last fiscal year appears on page 2 of Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, which is incorporated herein by reference. Principal Products Produced and Industry Segments Registrant designs, manufactures and sells manufactured housing (mobile homes) which are relocatable, factory-built dwellings of single and double unit design. Constructed on wheel undercarriages, they are towed by truck to locations where they are set up and connected to utilities. Registrant also produces recreational vehicles designed as short-period accommodations for vacationers and travelers. These products are travel trailers designed to be towed behind passenger vehicles and fifth wheel travel trailers designed to be towed behind and attached to special couplers in the beds of pickup trucks. Set forth below are the percentages of revenues contributed by each class of similar products for the last three fiscal years: Products Class Fiscal Year Manufactured Recreational Ended October 31, Housing Vehicles 1994 30% 70% 1995 27% 73% 1996 22% 78% Certain information regarding industry segments is set forth on page 10 of Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, which is incorporated herein by reference. Method of Product Distribution Registrant sells its products to approximately 372 dealers in 34 states, 41 dealers in Canada and 1 dealer in Japan. Exclusive dealerships are not the pattern of the industry, and virtually all dealers also sell competing products. Registrant generally produces manufactured housing products only against orders received from dealers. Recreational vehicles are built for inventory particularly during the winter months in anticipation of greater demand during the spring months. (See "Seasonal Considerations" below.) Transportation charges are an important 2 Item 1. Continued factor in the cost of Registrant's products; therefore, distribution is generally a function of distance to the various markets and competitive conditions within these markets. (See Item 2, "Properties," for the locations of Registrant's principal plants.) Registrant is not dependent upon a single customer or a few customers and no dealer or group of dealers accounts for a substantial amount of Registrant's total sales. Competitive Conditions The recreational vehicle and manufactured housing industries are highly competitive. Registrant believes that the principal methods of competition in these industries are based upon quality, price, styling, warranty and service of products being offered. Registrant also believes that it competes favorably with respect to these factors in the recreational vehicle group and has recently taken action with respect to the manufactured housing product line to ensure it remains competitive in the marketplace. There are a large number of firms manufacturing and marketing products similar to those of Registrant within the geographical area in which Registrant's products are marketed. Several of the manufacturers within these industries are larger than Registrant in terms of total revenue and resources. Backlog Registrant does not consider the existence and level of backlog at any given date to be a significant factor affecting its business, except in establishing its production schedules. This is primarily due to the fact that orders may be cancelled up until the time the dealer takes delivery, although such cancellations have not been significant to date. The dollar amount of backlog, subject to the above described cancellation provision, was $8,247,330 and $7,705,796 at October 31, 1996 and 1995, respectively. All of the backlog existing at October 31, 1996 is expected to be filled within the current fiscal year. Sources and Availability of Raw Materials Registrant purchases raw materials and components from a number of alternative sources and is not dependent upon any particular supplier. Patents Although Registrant's products are marketed under various trade names, Registrant does not believe that patents, trademarks, licenses, franchises and concessions are of material importance to its business. 3 Item 1. Continued Research and Development Registrant periodically revises and redesigns its models in response to consumer demand. These revisions and redesigns can be extensive, if necessary, in order to obtain market acceptance. Registrant manufactures and sells manufactured housing and recreational vehicles only and does not engage in new product development. Number of Employees On October 31, 1996, Registrant had 990 employees at its manufacturing plants and executive offices. Seasonal Considerations Registrant's sales and production volume traditionally increase during the second and third quarters of the fiscal year. During fiscal 1996, fifty-four percent of sales were achieved during the second and third fiscal quarters. Government Regulation The manufacture and distribution of Registrant's manufactured housing and recreational vehicle products are subject to governmental regulation in the United States and Canada at the federal, state, provincial and local levels. Compliance with those governmental regulations, including provisions regulating the discharge of materials into the environment or otherwise relating to the protection of the environment, is not expected to have a material adverse effect on Registrant. Business Risks Demand for Registrant's products is dependent upon the availability and cost of gasoline, available credit and economic conditions. Credit and the economy favorably affected dealers and retail purchasers of Registrant's recreational vehicle products in fiscal 1996. The Registrant believes that the Midwestern region has seen an increase in demand in fiscal 1996 due to the continuing economic improvement. 4 Item 1. Continued Working Capital Accounts receivable balances fluctuate generally with the timing of shipments during the month since the majority of sales are either on C.O.D. terms or are financed by dealers through flooring arrangements with financial institutions. Recreational vehicle finished goods inventory balances are subject to seasonal variations. (See "Method of Product Distribution" and "Seasonal Considerations" above.) A short delivery lead time exists for the majority of recreational vehicle and manufactured housing raw material purchases, thereby allowing Registrant to maintain low levels of raw materials inventory. Registrant is a party to an unsecured revolving credit agreement with a bank that provides financing of seasonal working capital requirements. 5 Item 2. Properties Registrant leases general executive and administrative offices in Long Beach, California. The lease expires on March 14, 1997. Registrant owns an 11,160 square foot building, situated on 1.7 acres, housing operational offices in Caldwell, Idaho. The following table sets forth certain information about the property and facilities utilized by Registrant for manufacturing and plant administrative purposes, and the property leased to others (all property is owned by Registrant unless otherwise noted): Approximate Approximate Facility And Location Acres Square Feet Recreational vehicle plants: Caldwell, Idaho 54,400 (1) Caldwell, Idaho 20.5 55,200 Caldwell, Idaho 20.5 53,000 McPherson, Kansas 18.6 47,400 McPherson, Kansas 9.1 67,600 Chino, California 10.0 47,700 (2) Manufactured housing plants: Caldwell, Idaho 9.5 64,000 (3) Caldwell, Idaho 13.0 81,000 (4) McPherson, Kansas 10.0 -0- (5) (1) Production facility leased by Registrant during fiscal 1995. Lease expires September 30, 1997. (2) Production facility leased to third party during fiscal 1996. (3) New plant production facility completed in January 1994. (4) Approximately 11,000-square foot warehouse added to production facility during fiscal 1993. (5) Production facility destroyed by a tornado on June 15, 1992; replaced in Caldwell, Idaho in 1994. 6 Item 3. Legal Proceedings Not applicable. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. 7 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Information in response to this item is incorporated by reference from the information appearing in Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, at pages 1 and 12. Item 6. Selected Financial Data Information in response to this item is incorporated by reference from the information appearing in Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, at page 11. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Information in response to this item is incorporated by reference from the information appearing in Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, at page 3. Item 8. Financial Statements and Supplementary Data Information in response to this item is incorporated by reference from the Financial Statements and the Notes to Financial Statements in Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996, at pages 4 through 9 and pages 12 through 14 of this Form 10-K. Item 9. Disagreements on Accounting and Financial Disclosure Not applicable. 8 PART III Item 10. Directors and Executive Officers of the Registrant Information with respect to this item is incorporated by reference from Registrant's definitive Proxy Statement to be filed with the Commission within 120 days after the close of Registrant's fiscal year. Item 11. Executive Compensation Information with respect to this item is incorporated by reference from Registrant's definitive Proxy Statement to be filed with the Commission within 120 days after the close of Registrant's fiscal year. Item 12. Security Ownership of Certain Beneficial Owners and Management Information with respect to this item is incorporated by reference from Registrant's definitive Proxy Statement to be filed with the Commission within 120 days after the close of Registrant's fiscal year. Item 13. Certain Relationships and Related Transactions Information with respect to this item is incorporated by reference from Registrant's definitive Proxy Statement to be filed with the Commission within 120 days after the close of Registrant's fiscal year. 9 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) (1) Financial Statements Annual Report Page(s) Balance Sheets at October 31, 1996 and 1995 4 Statements of Income for each of the three years in the period ended October 31, 1996 5 Statements of Shareholders' Equity for each of the three years in the period ended October 31, 1996 5 Statements of Cash Flows for each of the three years in the period ended October 31, 1996 6 Notes To Financial Statements 7-9 Report of Independent Accountants 9 The financial statements and the Report of Independent Accountants listed in the above index which are included in Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996 are hereby incorporated by reference. With the exception of the items referred to above and in Items 1, 5, 6, 7 and 8, Registrant's Annual Report to Shareholders for the fiscal year ended October 31, 1996 is not to be deemed filed as part of this report. 10 Item 14. Continued (a) (2) Fnancial Statement Schedules FORM 10-K PAGE Report of Independent Accountants on Schedules 12 Schedules: For each of the three years in the period ended October 31, 1996 II Valuation and Qualifying Accounts 13 IX Short-Term Borrowings 14 Schedules other than those listed above are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto. Columns omitted from schedules filed have been omitted because the information is not applicable. (a) (3) Exhibits Exhibits (3) Articles of Incorporation and By-Laws adopted by Registrant. (10) Material Contracts. (A) 1. Incentive Bonus Plan. (13) Annual report to security holders. (b) Reports on Form 8-K No reports on Form 8-K were filed during the fiscal quarter ended October 31, 1996. 11 REPORT OF INDEPENDENT ACCOUNTANTS ON SCHEDULES To the Shareholders and Board of Directors of KIT Manufacturing Company Our report on the financial statements of KIT Manufacturing Company has been incorporated by reference in this Form 10-K from page 9 of the 1996 Annual Report to Shareholders of KIT Manufacturing Company. In connection with our audits of such financial statements, we have also audited the related financial statement schedules listed in the index on page 11 of this Form 10-K. In our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND L.L.P. Los Angeles, California December 20, 1996 12 KIT MANUFACTURING COMPANY SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS For The Years Ended October 31, 1996, 1995 And 1994
Col. A Col. B Col. C Col. D Col. E Additions (1) (2) Charged To Charged To Balance At Costs Other Balance At Beginning Of And Accounts - Deductions - End Of Description Period Expenses Describe Describe Period Allowance for doubtful accounts: Year ended October 31, 1994 $49,000 $7,000 $12,000 (A) $44,000 Year ended October 31, 1995 $44,000 $ - $ - $44,000 Year ended October 31, 1996 $44,000 $ - $1,000 (A) $43,000
(A) Write-off of uncollectible accounts. 13 KIT MANUFACTURING COMPANY SCHEDULE IX SHORT-TERM BORROWINGS For The Years Ended October 31, 1996, 1995 And 1994
Col.A Col.B Col.C Col.D Col.E Col.F Balance At Maximum Amount Weighted Average Weighted Average Category Of Aggregate End Of Weighted Average Outstanding Outstanding Interest Rate Borrowings Period Interest Rate During The Period(B) During The Period(C) During The Period(C) Year ended October 31, 1994: Unsecured revolving credit agreement (A) -0- * $5,400,000 $2,159,000 6.4% Year ended October 31, 1995: Unsecured revolving credit agreement (A) -0- * $1,300,000 $722,000 8.8% Year ended October 31, 1996: Unsecured revolving credit agreement (A) -0- * $1,600,000 $697,000 8.0% (A) The Registrant is party to an unsecured revolving credit agreement with a bank that provides financing of seasonal working capital requirements. There are no compensating balance requirements under the agreement. Major provisions of the agreement include interest at the bank's prime rate and certain minimum requirements as to the Registrant's working capital and debt to equity relationships. The maximum borrowing permitted is the lesser of $7,500,000 or the sum of 80% of eligible trade receivables and 50% of inventories, less any commercial and standby letters of credit outstanding up to a maximum of $1,000,000. (B) Based on month-end balances. (C) Based on the daily balances and interest rates during the year. *Not applicable.
14 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 By: /s/ Dan Pocapalia Dan Pocapalia Chairman of the Board, Chief Executive Officer and President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: /s/ Dan Pocapalia Jan. 13, 1997 /s/ John W.H. Hinricks Jan. 13, 1997 Dan Pocapalia John W.H. Hinricks Chairman of the Board, Director Chief Executive Officer and President (Principal Executive Officer) /s/ John F. Zaccaro Jan. 13, 1997 /s/ Frank S. Chan Jan. 13, 1997 John F. Zaccaro Frank S. Chan Director Director /s/ Dale J. Gonzalez Jan. 13, 1997 /s/ Fred W. Chel Jan. 13, 1997 Dale J. Gonzalez Fred W. Chel Vice President - Treasurer Director (Principal Financial and Accounting Officer) 15 INDEX TO EXHIBITS EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K Sequential Page Number (3) Articles of Incorporation and By-Laws adopted by Registrant 17 (10) Material Contracts (A) 1. Incentive Bonus Plan 18 (13) Annual Report to Shareholders * *Incorporated by reference 16 (3) Articles of Incorporation and By-Laws The amended and restated Articles of Incorporation and By-Laws of the Registrant are hereby incorporated by reference from the exhibits to Form 10-K (File No. 2-31520) as filed for the fiscal year ended October 31, 1987. *Incorporated by reference 17 (10) Material Contracts (A) 1. Incentive Bonus Plan Registrant maintains an Incentive Bonus Plan under which incentive bonuses may be paid to key management personnel pursuant to individual agreements relating to the profitability of the participant's area of responsibility. The amount of the bonus paid generally increases as the profitability of the area of responsibility increases. Time periods for which performance is measured include fiscal quarters and in some cases fiscal years. Payments are typically made within 75 days after the time period for which performance is measured. The agreements are reviewed annually and may be terminated at will by either party. *Incorporated by reference 18 KIT Manufacturing Company 1996 Annual Report 19 KIT Manufacturing Company Financial Highlights (Dollars in thousands except per share amounts)
1996 1995 1994 1993 1992 Operating Results for the Year Ended October 31 Sales $97,158 $101,462 $89,722 $59,122 $55,469 Net income 1,431(1) 1,349(2) 1,891(3) 33 1,458(4) Per share $1.29(1) $1.21(2) $1.61(3) $0.02 $0.99(4) Shares outstanding 1,110,934 1,110,934 1,177,283 1,472,389 1,472,389 Working capital $8,515 $8,427 $7,622 $10,832 $12,213 (1) Includes gain on business interruption claim of $373,000, net of related income taxes, or $0.34 per share. (2) Includes gain on business interruption claim of $423,000, net of related income taxes, or $0.38 per share. (3) Includes gain on involuntary conversion of plant facility and equipment and business interruption claim 671,000, net of related income taxes, or $0.57 per share. (4) Includes gain on involuntary conversion of plant facility and equipment of $1,118,000, net of related income taxes, or $0.76 per share.
About the Company: KIT Manufacturing Company produces manufactured housing and recreational vehicles marketed by an independent dealer network in 21 states in the West, Midwest, South and Southeast sectors and Canada and Japan. KIT homes are permanent living structures that are built utilizing materials similar to conventional housing. KIT recreational vehicle products are used primarily for camping or vacation travel and provide a variety of living accommodations. 20 To Our Shareholders: Operating income rose 19% in fiscal 1996 to $1,774,000 while sales declined 4%. This improvement in earnings from operations was attributed to operating efficiencies, coupled with a decline in certain expansion costs in our newest RV and manufactured housing plants. The expansion projects at the recreational vehicle and manufactured housing plants, completed in the latter part of fiscal 1995, were designed to increase operating capacity. Net income rose 6% to $1,431,000, or $1.29 per share, in comparison to net income in fiscal 1995 of $1,349,000, or $1.21 per share. Net income for both fiscal years includes after-tax gains from a business interruption claim of $373,000, or $.34 per share, in fiscal 1996 and $423,000, or $.38 per share, in fiscal 1995. These gains are the result of an insurance claim arising from the 1992 tornado damage to our McPherson, Kansas manufacturing facility. This plant was closed in 1992. Industry-wide recreational vehicle sales were impacted by economic uncertainty during the third and forth quarters of fiscal 1996. Despite this fact, KIT's RV sales rose in comparison to 1995. This was in large part due to increased demand due to KIT's commitment to developing innovative floor plans and interior designs, thereby providing the retail consumer with value and quality. In addition, these continuing improvements to our RV product lines have enabled the Company to expand its dealer base by providing both the new and existing dealers with products that remain competitive in the market place. The manufactured housing division is currently in the process of expanding its plant by approximately 40%. This expansion should be completed sometime in March 1997. Management feels that the increased capacity as well as the progress made through several operational changes, should position KIT to take advantage of the expanding demand for the KIT manufactured home in all of our sales regions. The most recent National RV show in Louisville, Kentucky as well as our annual manufactured housing "neighborhood" show in Boise, Idaho held during the latter part of 1996 provided management with an optimistic view of what lies ahead for fiscal 1997. Our recreational vehicle p r oduct lines and our manufactured homes, with a multitude of innovations, were well received by the dalers. Both of these shows generated a significant amount of sales to the existing dealers and gave us the opportunity to enhance our dealer network. The Company remains in a strong financial position to take advantage of anticipated current and future demand. KIT has no long term debt and its line of credit remains unused at fiscal year end. In addition, working capital increased from fiscal 1995 and current assets remain at more than double current liabilities. Fiscal 1997 will see the Company continue to concentrate on providing new and existing dealers with high quality, innovative products. First quarter operations will be affected by the severe weather and flooding conditions on the West coast, however, management feels confident in the coming fiscal year that the Company will remain creative as well as competitive in our market territory. Sincerely, Dan Pocapalia Chairman, President and Chief Executive Officer 21 Recreational Vehicles KIT is one of the largest manufacturers of travel trailers and fifth-wheels in the United States. This position is the result of 52 years of delivering the highest quality and value to our customers. In a recent survey of all recreational vehicle dealers by the RVDA, KIT ranked as one of the highest rated manufacturers in the United States on product design, floor plans, construction and service. T h e baby-boomer generation along with younger families are discovering the affordability and comfort of recreational vehicle travel. The Company's philosophy of uncompromising quality control standards has driven KIT to new heights in retail customer loyalty from the oldest to the newest members of RV lifestyle. KIT's RV products incorporate high quality, reliable name-brand appliances, interior components and accessories. In our 1997 product lines, the Company introduced many new innovations in our models in response to our customers' requests. In addition to the new interiors introduced in the 1996 models, the 1997 floor plans have been further enhanced. Because of these changes, KIT has been able to significantly improve the size of its dealer network. KIT produces a wide range of recreational vehicle products in its manufacturing facilities in Caldwell, Idaho and McPherson, Kansas. KIT RV s measure from 17 to 39 feet in length, are more than eight feet wide and provide sleeping accommodations from 2 to 10 persons. KIT produces its travel trailers and fifth-wheels under the brand names of Road Ranger, Companion, Sportsmaster and Patio Hauler. T h e entry level Sportsmaster brand continues to move up dramatically in the market place, offering many quality features as standard equipment. The Road Ranger and Companion name lines, with over thirty floor plans, are in the mid-priced market. These models feature a wide range of features for the consumer. Road Ranger Elite and Companion Cordova models are our high-end product offering. These models provide the largest living and storage areas in their price range. They appeal to the discerning buyer and offer a vast selection of features as standard equipment. Designed for adventure, the Patio Hauler features a cargo area for hauling off-road vehicles and other sporting equipment. The cargo area then converts to an enclosed patio when the "toys" are removed. The five available floor plans all feature the patio concept as well as provide the buyer with a separate, fully appointed living area away from the patio. Retail prices for the more than 30 KIT floor plans range from $11,000 to $48,000. This range covers approximately 80 percent of the travel trailer and fifth-wheel market. More than 300 independent dealers now distrbute KIT recreational vehicles to the retail consumer throughout the continental United States, Canada and Japan. KIT provides its dealer network system with national media advertising, sales literature, training and special support programs, along with its national reputation for product quality and service. RV use is a flourishing source of recreation and relaxation for many Americans regardless of age or economic background. Over the past 52 years, KIT has supplied this growing market with the quality and affordability that fulfills the desires of people who enjoy this type of comfort and convenience. The Company continues to strive for excellence in its products and service in its quest to make the RV experience a most enjoyable one for its many satisfied customers. Manufactured Housing T h e manufactured housing division continues its profitable operations. Value pricing coupled with a continuing emphasis on reducing operating costs has had a positive effect on the financial results of the housing products division. M a nufactured housing builds both single and multi-sectioned dwellings designed to be transported to a prepared homesite. Multi-sectioned homes offer the appearance and living space of traditional site-built housing and have become the dominant portion of our sales. KIT homes are built in a controlled environment which minimizes the variables inherent in outdoor construction. By standardizing models we can build homes with greater efficiency, and consequently at lower cost, than site-built homes with the same features. The manufactured housing division continues to aggressively develop new products that incorporate innovative floor plans, modern colors and functional design. KIT manufactured homes are distributed from production facilities in Caldwell, Idaho through a network of approximately 63 dealers located in 9 Western states. KIT's homes are marketed in five product lines. The Oakcrest 14' wide home offers gracious, convenient living in modest floor space. The Royal Oaks home appeals to buyers with an interest in deluxe entry-level housing. Our Sierra homes are generally larger and provide a wide array of styles and custom features. The Golden State line, our most elegant series of homes, provides outstanding value for individuals who place a premium on comfort and luxury. Introduced in 1994, the Briercrest was designed specifically with subdivision application in mind as the home is sold with an attached garage and is basement applicable. Living space in the 52 available floor plans range from about 530 to more than 2,500 square feet. Retail prices, exclusive of land costs, range from approximately $20,000 to $120,000. As the nation continues to search for solutions to the problem of a f f ordable, single-family housing, KIT stands ready to provide attractive, energy-efficient homes at competitive prices. 22 KIT Manufacturing Company Management's Discussion And Analysis of Results of Operations and Financial Condition Results of Operations Fiscal 1996 Compared to 1995 Sales declined 4% to $97.2 million compared to the prior year. Net income increased to $1,431,000, or $1.29 per share, compared to $1,349,000, or $1.21 per share, in 1995. Net income in 1996 and 1995 i n cludes after-tax gains from insurance proceeds on a business interruption claim of $373,000, or $0.34 per share and $423,000, or $0.38 per share, respectively. Both divisions implemented modest price increases in 1996 and 1995 to counter cost increases in raw material costs. Operating income in the manufactured housing division rose significantly due a major decrease in operating costs as the division completed a consolidation of two operating plants. Recreational vehicle division sales increased 2% to $75.6 million. Despite an overall decrease in RV shipments of 5% to 5,229 units, fifth-wheel model shipments rose to 2,501 units from 2,320 shipped last year. Travel trailer shipments declined 15% to 2,732 units, however the model mix moved toward higher priced units. Management of the Company believes that the trend in sales of higher priced units will continue in fiscal 1997. Manufactured housing sales declined 21% to $21.6 million. This decrease reflected a 49% decline in shipments of single-section homes to 59 units and a 22% decrease in shipments of multi-section homes to 519 units. Total unit shipments decreased 26% to 578 homes in fiscal 1996. Gross profit as a percent of sales increased to 11% in comparison to 9.2% in 1995. The primary reasons for the increase were an increase in operating efficiencies, improved sales volume and a decline in start-up costs at the new RV plant and a decline in manufactured housing costs due to the plant consolidation. Selling, general and administrative expenses rose 13% to 9.2% of sales in comparison to fiscal 1995. The Company increased its selling costs in RV's in order to maintain market share as competition increased. Net interest expense of $13,000 as compared to net interest income of $42,000 in 1995 was the result of higher average borrowing levels as the Company maintained its inventories at a higher average level than in fiscal 1995. Fiscal 1995 Compared to 1994 Sales increased 13% to $101.5 million compared to fiscal 1994. Net income decreased to $1,349,000, or $1.21 per share, compared to $1,891,000, or $1.61 per share, in fiscal 1994. Net income in 1995 and 1994 includes an after tax-gain from insurance proceeds on a business interruption claim and an after-tax gain on an involuntary conversion of plant facility and equipment of $423,000 or $.38 per share, and $671,000, or $0.57 per share, respectively. Recreational vehicle division sales increased 18% to $74.2 million. Product line innovations and new models resulted in an overall increase in RV shipments of 10% to 5,516 units. Travel trailer shipments rose 19% to 3,196 units. Fifth-wheel model shipments increased to 2,320 units from 2,318 shipped in 1994. Manufactured housing sales rose 1% to $27.3 million. Total unit shipments decreased to 781 units in fiscal 1995. Gross profit as a percent of sales declined to 9.2% in comparison to 10.6% in 1994. The primary reasons for the decrease were an increase in sales of lower margin RV's over fiscal 1994 and an increase in start-up and plant consolidation costs. Selling, general and administrative expenses decreased 5% to 7.8% of sales in comparison to fiscal 1994 as the Company continued to hold down these costs. Net interest income of $42,000 as compared to $16,000 in fiscal 1994 was the result of lower average borrowing levels than in 1994. Liquidity and Capital Resources The financial position of the Company continues to remain strong. The current ratio at fiscal year end 1996 rose to 2.1 from 2.0 in fiscal 1995 due to an increase in receivables and inventories. In addition to funding capital requirements with available funds, the Company, through financing activities, funds seasonal working capital requirements with cash from periodic borrowings on its unsecured revolving line of credit. See Note 4 of the Notes to Financial Statements for discussion of the line of credit. There were no borrowings against the line of credit at fiscal year-end 1996 or 1995. The Company believes that available funds, supplemented as needed with funds available on its line of credit, will provide it with sufficient resources to meet present and reasonably foreseeable working capital requirements and other cash needs. 23 KIT Manufacturing Company Balance Sheets
October 31, 1996 1995 ASSETS Current Assets Cash and cash investments $2,281,000 $2,218,000 Accounts receivable, net of allowance for doubtful accounts of $43,000 in 1996 and $44,000 in 1995 8,026,000 7,350,000 Inventories 7,169,000 5,667,000 Prepaids and deferred income taxes 1,241,000 1,589,000 Total Current Assets 18,717,000 16,824,000 Property, Plant and Equipment, at cost Land 492,000 492,000 Buildings and improvements 6,856,000 6,898,000 Machinery and equipment 4,233,000 3,942,000 Construction in progress 175,000 8,000 11,756,000 11,340,000 Less accumulated depreciation (5,437,000) (4,952,000) 6,319,000 6,388,000 Other Assets 103,000 90,000 $25,139,000 $23,302,000 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $3,685,000 $3,954,000 Accrued payroll and payroll related liabilities 2,256,000 2,203,000 Accrued marketing programs 1,104,000 741,000 Accrued expenses 1,664,000 1,309,000 Income taxes payable 24,000 190,000 Total Current Liabilities 8,733,000 8,397,000 Deferred Income Taxes 1,469,000 1,399,000 10,202,000 9,796,000 Commitments and Contingencies Shareholders' Equity Preferred stock, $1 par value; authorized 1,000,000 shares; none issued Common stock, without par value; authorized 5,000,000 shares;issued and outstanding 1,110,934 shares in 1996 and 1995 750,000 750,000 Additional paid-in capital 842,000 842,000 Retained earnings 13,345,000 11,914,000 Total Shareholders' Equity 14,937,000 13,506,000 $25,139,000 $23,302,000
The accompanying notes are an integral part of these financial statements. 24 KIT Manufacturing Company Statements of Income
For the Years Ended October 31, 1996 1995 1994 Sales $97,158,000 $101,462,000 $89,722,000 Costs and expenses Cost of sales 86,473,000 92,098,000 80,246,000 Selling, general and administrative expenses 8,911,000 7,872,000 7,472,000 95,384,000 99,970,000 87,718,000 Operating income 1,774,000 1,492,000 2,004,000 Other income Interest (expense) income, net (13,000) 42,000 16,000 Gain on involuntary conversion of plant facility and equipment 779,000 Gain on business interruption claim 620,000 701,000 312,000 Income before income taxes 2,381,000 2,235,000 3,111,000 Provision for income taxes 950,000 886,000 1,220,000 Net income $1,431,000 $1,349,000 $1,891,000 Net income per share $1.29 $1.21 $1.61 Shares outstanding 1,110,934 1,110,934 1,177,283
Statements of Shareholders' Equity
Common Stock Additional Retained Shares Amount Paid-In Capital Earnings Total Balance, October 31, 1993 1,472,389 $994,000 $1,115,000 $11,821,000 $13,930,000 Net income 1,891,000 1,891,000 Repurchase of Common Stock (361,455) (244,000) (273,000) (3,147,000) (3,664,000) Balance, October 31, 1994 1,110,934 750,000 842,000 10,565,000 12,157,000 Net income 1,349,000 1,349,000 Balance, October 31, 1995 1,110,934 750,000 842,000 11,914,000 13,506,000 Net income 1,431,000 1,431,000 Balance, October 31, 1996 1,110,934 $750,000 $842,000 $13,345,000 $14,937,000 The accompanying notes are an integral part of these financial statements.
25 KIT Manufacturing Company Statements of Cash Flows
For the Years Ended October 31, 1996 1995 1994 Cash Flows From Operating Activities: Cash received from customers $96,711,000 $100,449,000 $87,480,000 Interest received 53,000 87,000 116,000 Cash received from operations 96,764,000 100,536,000 87,596,000 Cash paid to suppliers and employees 95,593,000 101,061,000 84,133,000 Interest paid 66,000 45,000 100,000 Income taxes paid 1,073,000 908,000 837,000 Cash disbursed for operations 96,732,000 102,014,000 85,070,000 Net cash provided by (used in) operating activities 32,000 (1,478,000) 2,526,000 Cash Flows From Investing Activities: Purchase of property, plant and equipment, net (434,000) (1,251,000) (3,622,000) Insurance proceeds from involuntary conversion of plant facility and equipment and business interruption claim 620,000 701,000 1,259,000 Changes in other current and non-current assets (155,000) (379,000) (358,000) Net cash provided by (used in) investing activities 31,000 (929,000) (2,721,000) Cash Flows From Financing Activities: Funds used to repurchase common stock (3,664,000) Proceeds from line-of-credit borrowings 4,900,000 2,800,000 9,800,000 Principal payments on line-of-credit borrowings (4,900,000) (2,800,000) (9,800,000) Net cash used in financing activities (3,664,000) Net increase (decrease) in cash 63,000 (2,407,000) (3,859,000) Cash and cash investments at beginning of year 2,218,000 4,625,000 8,484,000 Cash and cash investments at end of year $2,281,000 $2,218,000 $4,625,000 Reconciliation of Net Income to Net Cash Provided by (Used in) Operating Activities: Net income $1,431,000 $1,349,000 $1,891,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 670,000 597,000 478,000 Gain on involuntary conversion of plant facility and equipment and business interruption claims (620,000) (701,000) (1,091,000) Increase in accounts and notes receivable (676,000) (1,209,000) (1,151,000) (Increase) decrease in inventories (1,501,000) (1,575,000) 41,000 Increase in accounts payable and accruals 894,000 29,000 2,225,000 (Decrease) increase in income taxes payable (166,000) 32,000 133,000 Net cash provided by (used in) operating activities $32,000 $(1,478,000) $2,526,000
The accompanying notes are an integral part of these financial statements. 26 KIT Manufacturing Company Notes to Financial Statements 1. Summary of Significant Accounting Policies Cash and Cash Investments The Company places its temporary cash investments, all of which are considered cash equivalents, in high quality financial instruments. The Company also maintains deposits at financial institutions in amounts in excess of federally insured limits. Management believes that credit risk related to its investments is limited due to the quality of the investments and the Company's policy which limits credit exposure to any one financial institution. Valuation of Inventories Inventories are stated at the lower of cost (last-in, first-out for material and first-in, first-out for labor and overhead) or market. Depreciation and Amortization For financial reporting purposes, depreciation and amortization of p r o perty, plant and equipment is generally provided for on a straight-line basis, using estimated useful lives of 10 years for land improvements, 20 to 33-1/3 years for buildings and improvements, 3 to 10 years for equipment and lease terms for leasehold improvements. Upon sale or disposition of assets, any gain or loss is included in the statement of income. Expenditures for maintenance, repairs and minor r e n ewals are charged to expense as incurred; expenditures for betterments and major renewals are capitalized. Income Taxes The Company follows Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," (SFAS 109), which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted rates in effect for the year in which the differences are expected to reverse. Income Per Share Income per share amounts are based on the weighted average number of common shares outstanding during the year. During fiscal 1994, the Company repurchased 361,455 common shares from the family of one of its f o unders. Total weighted average common shares outstanding were 1,110,934 for fiscal 1996 and 1995, and 1,177,283 for fiscal 1994. Insurance The Company is self-insured for workers compensation for its plant locations, officers and directors, and product liability. The Company has recognized an estimated potential liability for incurred but not reported claims. The Company recognized experience refunds from its medical insurance carrier amounting to $230,000 in 1996, $195000 in 1995, and $168,000 in 1994. Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Stock Options In October 1995, the Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock Based Compensation ("SFAS 123") which is effective for transactions entered into in fiscal years that begin after December 15, 1995. The Company is currently studying the effects of adopting SFAS 123. 2. Involuntary Conversion of Plant Facility and Equipment and Business Interruption Claim In mid-June, 1992, the McPherson, Kansas manufactured housing plant f a cility was destroyed by a tornado. In addition, all of the manufacturing equipment and inventories were lost to water and wind damage. The storm also destroyed the finished goods inventory of the RV manufacturing plant in the same location. A gain of $779,000 was recorded by the Company in 1994, representing the difference between insurance proceeds and the net book value of those items destroyed by the tornado. The Company has also recorded gains in 1996, 1995 and 1994 of $620,000, $701,000 and $312,000, respectively, for a business interruption claim relative to this matter. The insurance proceeds were used to construct the new manufactured housing plant in Caldwell, Idaho, which became operational in February 1994. 27 KIT Manufacturing Company Notes to Financial Statements 3. Stock Options During June 1994, the Company granted to five officers of the Company, options to purchase up to 96,944 shares of the Company's common stock, at 100% of the then fair value, or $10.38 per share. Also in June 1994, the Company granted to one such officer an additional option to purchase up to 35,056 shares of the Company's common stock, at 110% of the then fair value, or $11.41 per share. Options granted vest in four equal annual installments beginning one year after the date of the grant. The options to purchase the 96,944 shares of the Company's common stock remain outstanding (subject to termination of employment, death or permanent disability of the holder, as set forth in the option agreements) for a period of 10 years from the date of grant. The option to purchase the 35,056 additional shares of the Company's common stock remains outstanding (subject to termination of employment, death or permanent disability of the holder, as set forth in the option agreements) for a period of 5 years from the date of grant. On October 31, 1996 and 1995, total unexercised options were 132,000, of which 66,000 and 33,000 options, respectively, were exercisable. 4. Bank Credit Line The Company is party to an unsecured revolving credit agreement with a bank that provides financing of seasonal working capital requirements. There are no compensating balance requirements under the agreement. Major provisions of the agreement include interest at the lesser of the bank s prime rate or market rate, and certain minimum requirements as to the Company s working capital and debt-to-equity relationships. At October 31, 1996, there was no outstanding balance on the revolving credit line, and the maximum borrowing permitted was the lesser of $7,500,000 or the sum of 80% of eligible trade receivables and 50% of i n ventories, less any commercial and standby letters of credit outstanding up to a maximum of $1,000,000. Interest costs charged to expense for the fiscal years 1996, 1995 and 1994 were $66,000, $45,000 and $100,000, respectively. In fiscal 1994, the Company capitalized $40,000 of interest cost to buildings and improvements. 5. Commitments and Contingencies The Company was contingently liable at October 31, 1996 to various financial institutions on repurchase agreements in connection with wholesale inventory financing. In general, inventory is repurchased by the Company upon customer default with a financing institution and then resold through normal distribution channels. The total value of finished units subject to such agreements as of October 31, 1996 and 1995 was approximately $15,644,000 and $15,350,000, respectively. In addition, the Company is contingently liable to financial institutions for standby letters of credit totalling $748,000 and $415,000 as of October 31, 1996 and 1995, respectively. These letters of c r e d i t 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. 6. Income Taxes The components of the provision (benefit) for income taxes are as follows (dollars in thousands):
October 31, 1996 1995 1994 Current: Federal $712,000 $724,000 $783,000 State 195,000 216,000 187,000 907,000 940,000 970,000 Deferred: Federal 47,000 (19,000) 195,000 State (4,000) (35,000) 55,000 43,000 (54,000) 250,000 $950,000 $886,000 $1,220,000
The sources of deferred taxes were as follows: October 31, 1996 1995 1994
Accrued warranty costs $(52,000) $(59,000) $(70,000) Workers' compensation reserves 31,000 (35,000) (58,000) State income and franchise taxes 7,000 70,000 (75,000) Involuntary conversion of plant facility & equipment 325,000 Inventory cost capitalization (16,000) (121,000) 81,000 Accelerated depreciation 70,000 92,000 47,000 Product liability reserves and other 3,000 (1,000) $43,000 $(54,000) $250,000
28 KIT Manufacturing Company Notes to Financial Statements 6. Income Taxes Continued Reconciliation of the effective tax rates and the U.S. statutory tax rate is summarized as follows:
October 31, 1996 1995 1994 Statutory tax rate 34.0% 34.0% 34.0% State tax provision, net of federal tax effect 4.1 5.3 (1.0) Tax exempt interest (.3) (.4) (1.0) Other 2.1 .7 1.1 39.9 39.6 39.2
The components of the deferred tax asset and liability are as follows:
October 31, 1996 1995 Deferred tax asset: Allowance for doubtful accounts $20,000 $20,000 Inventory adjustment 138,000 122,000 Accrued expenses 592,000 573,000 State income taxes 97,000 104,000 $847,000 $819,000 Deferred tax liability: Accelerated depreciation $374,000 $304,000 Involuntary conversion of plant facility and equipment 1,095,000 1,095,000 $1,469,000 $1,399,000
The Company did not record a valuation allowance against the deferred tax asset in fiscal 1996 or 1995. 7. Inventories Inventories are summarized as follows:
October 31, 1996 1995 Raw material $3,413,000 $2,543,000 Work in process 1,230,000 1,055,000 Finished goods 2,526,000 2,069,000 $7,169,000 $5,667,000
The excess of current replacement cost over last-in, first-out cost was $1,234,000 at October 31, 1996 and $1,308,000 at October 31, 1995. 8. Industry Segment Information Information about the Company's operations within industry segments for the years ended October 31, 1996, 1995 and 1994 is presented on page 10. Report of Independent Accountants To the Shareholders and Board of Directors of KIT Manufacturing Company We have audited the accompanying balance sheets of KIT Manufacturing Company as of October 31, 1996 and 1995 and the related statements of income, shareholders equity, and cash flows for each of the three years in the period ended October 31, 1996. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of KIT Manufacturing Company as of October 31, 1996 and 1995 and the results of its operations and its cash flows for each of the three years in the period ended October 31, 1996, in conformity with generally accepted accounting principles. Los Angeles, California Coopers & Lybrand, LLP December 20, 1996 29 KIT Manufacturing Company Industry Segment Information
October 31, 1996 1995 1994 (Dollars in thousands) SALES Manufactured housing $21,580 $27,304 $26,908 Recreational vehicles 75,578 74,158 62,814 Total sales $97,158 $101,462 $89,722 INCOME BEFORE INCOME TAXES Operating income Manufactured housing $933 $(53) $1,196 Recreational vehicles 841 1,545 808 Total operating income 1,774 1,492 2,004 Interest income (expense), net (13) 42 16 Gain on involuntary conversion of plant and equipment 779 Gain on business interruption claim 620 701 312 Income before income taxes $2,381 $2,235 $3,111 IDENTIFIABLE ASSETS Manufactured housing $7,207 $6,447 $8,413 Recreational vehicles 17,932 16,855 13,478 Total assets $25,139 $23,302 $21,891 DEPRECIATION Manufactured housing $234 $232 $171 Recreational vehicles 436 365 307 Total depreciation $670 $597 $478 CAPITAL EXPENDITURES Manufactured housing $127 $253 $3,025 Recreational vehicles 307 998 597 Total capital expenditures $434 $1,251 $3,622
Operating income represents income before net interest income, gain on involuntary conversion of plant facility and equipment, gain on business interruption claims and income taxes. Non-direct operating expenses are allocated to industry segments based on a percentage of sales. Identifiable assets, depreciation and capital expenditures are those items that are used in the operations in each industry segment, with jointly used items being allocated based on a percentage of sales. 30 KIT Manufacturing Company Selected Financial Data
October 31, 1996 1995 1994 1993 1992 (Dollars in thousands except per share amounts) FISCAL YEAR Sales $97,158 $101,462 $89,722 $59,122 $55,469 Net income $1,431(1) $1,349(2) $1,891(3) $33 $1,458(4) Cash dividends paid $ $ $ $ $ Capital expenditures $434 $1,251 $3,622 $1,804 $423 Depreciation $670 $597 $478 $331 $313 AT YEAR-END Working capital $9,984 $8,427 $7,622 $10,832 $12,213 Current ratio 2.1:1 2.0:1 1.9:1 2.7:1 4.1:1 Property, plant and equipment, net $6,319 $6,388 $5,762 $3,965 $2,535 Total assets $25,139 $23,302 $21,891 $21,308 $18,795 Long-term obligations $ $ $ $ $ Shareholders' equity $14,937 $13,506 $12,157 $13,930 $13,897 PER SHARE Net income $1.29(1) $1.21(2) $1.61(3) $0.02 $0.99(4) Shareholders' equity $13.45 $12.16 $10.94 $9.46 $9.44 (1) Includes gain on a business interruption claim of $373,000, net of related income taxes, or $0.34 per share. (2) Includes gain on a business interruption claim of $423,000, net of related income taxes, or $0.38 per share. (3) Includes gain on involuntary conversion of plant facility and equipment and a business interruption claim of $671,000, net of related income taxes, or $0.57 per share. (4) Includes gain on involuntary conversion of plant facility and equipment of $1,118,000, net of related income taxes, or $0.76 per share.
31 KIT Manufacturing Company Quarterly Statistics (Dollars in thousands except per share amounts) (Unaudited)
First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 1996 Sales $17,971 $28,679 $23,924 $26,584 Gross profit 1,954 3,450 3,206 2,075 Income before income taxes 11 839 1,415 116 Net income 7 503 826(1) 95 Net income per share $0.01 $0.45 $0.74(1) $0.09 Fiscal 1995 Sales $21,851 $26,425 $27,537 $25,649 Gross profit 2,208 2,763 2,301 2,092 Income before income taxes 444 1,136 467 188 Net income 262 674(2) 273 140 Net income per share $0.24 $0.61(2) $0.25 $0.11 (1) Includes gain on a business interruption claim of $373,000, net of related income taxes, or $0.34 per share. (2) Includes gain on a business interruption claim of $423,000, net of related income taxes, or $0.38 per share.
Market Prices of Common Stock
First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 1996 High 14 1/4 16 1/4 15 1/4 13 7/8 Low 11 10 1/4 10 1/8 10 1/4 Fiscal 1995 High 12 3/4 12 12 5/8 12 1/4 Low 10 9 7/8 10 10 1/4 KIT common stock is traded on the American Stock Exchange. The above table reflects the high and low sales prices for each quarterly fiscal period in the past two years. There are approximately 346 shareholders of record on January 10, 1997.
32 Corporate Information Directors Stock Registrar and Transfer Agent Dan Pocapalia ChaseMellon Shareholder Services,LLC Chairman of the Board, Ridgefield Park, New Jersey President and Chief Executive Officer of KIT Fred W. Chel Legal Counsel Business Consultant, O'Melveny & Myers Custom Fibreglass Los Angeles, California Manufacturing Company Frank S. Chan, Jr. Certified Public Accountant, Partner, Accountants Frank S. Chan & Company Coopers & Lybrand L.L.P. Los Angeles, California John W. H. Hinrichs Senior Vice President & Cashier, Farmers & Merchants Bank of Long Beach Form 10-K A copy of the Company's current annual report filed John F. Zaccaro with the Securities and Exchange President and Executive Producer, Commission (SEC) on FORM 10-K, The International Health and exclusive of exhibits, will be Health and Medical Film Festival, Inc. furnished to shareholders without charge upon written request to Marlyce A. Faldetta, Corporate Officers Secretary, KIT Manufacturing Company, Post Office Box 848, Dan Pocapalia Long Beach, California 90801. Chairman of the Board, President and Chief Executive Officer Executive Offices Dale J. Gonzalez KIT Manufacturing Company Senior Vice President and Treasurer 530 East Wardlow Road, P.O. Box 848 Long Beach, California 90801 Gerald R. Wannamaker Executive Vice President - Operations Matthew S. Pulizzi Annual Meeting of Shareholders Vice President - Customer Relations Tuesday, March 11, 1997, 9:00 A.M. Long Beach Marriott Marlyce A. Faldetta 4700 Airport Plaza Drive Corporate Secretary Long Beach, California 33 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM 10K AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. YEAR YEAR OCT-31-1996 OCT-31-1995 OCT-31-1996 OCT-31-1995 2281000 2218000 0 0 8026000 7350000 43000 44000 7169000 5667000 18717000 16824000 11756000 11340000 5437000 4952000 25139000 23302000 8733000 8397000 0 0 0 0 0 0 1592000 1592000 0 0 25139000 23302000 97158000 101462000 97158000 101462000 86473000 92098000 95384000 99970000 0 0 0 0 13000 0 2381000 2235000 950000 886000 1431000 1349000 0 0 0 0 0 0 1431000 1431000 1.29 1.21 1.29 1.21
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