-----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, GgQSIGOU0F7FNuVYCwM0DmuWIIXYDGkRIhLlk+2i7D+FGVI71ygIKpnZDahbMTWu cdJFbC34Gc4/CuroALZoWA== 0000056151-98-000002.txt : 19980310 0000056151-98-000002.hdr.sgml : 19980310 ACCESSION NUMBER: 0000056151-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980131 FILED AS OF DATE: 19980309 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: SEC FILE NUMBER: 001-06257 FILM NUMBER: 98560353 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 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 January 31, 1998 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 (562)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 January 31, 1998. Index to Exhibits - Page 10 1 of 10 Pages PART I FINANCIAL INFORMATION - 2 - KIT MANUFACTURING COMPANY STATEMENTS OF OPERATIONS (Dollars in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended January 31, 1998 1997 Sales $13,819 $16,589 Costs and expenses: Cost of sales 12,918 15,257 Selling, general and administrative expenses 1,183 1,887 14,101 17,144 Operating loss (282) (555) Other income Interest income, net 17 9 Loss before income taxes (265) (546) Benefit for income taxes (Note A) (108) (224) Net loss ($157) ($322) Shares outstanding (Note B) 1,110,934 1,110,934 Net operating loss per share (Note B) ($0.25) ($0.50) Net loss per share (Note B) ($0.14) ($0.29) Dividends per share $ - $ - The accompanying notes are an integral part of these financial statements -3-
KIT MANUFACTURING COMPANY BALANCE SHEETS (Dollars in thousands) January 31, October 31, 1998 1997 (Unaudited) [S] [C] [C] ASSETS Cash and cash investments $2,637 $3,673 Accounts receivable, net 4,478 4,533 Inventories: Raw materials 2,370 1,876 Work in process 985 907 Finished goods 2,646 619 Total inventories 6,001 3,402 Prepaids and income tax refunds receivable 3,011 2,632 Total current assets 16,127 14,240 Property, plant and equipment, net 6,798 6,844 Other assets 54 53 Total assets $22,979 $21,137 LIABILITIES AND SHAREHOLDERS' EQUITY Note payable to bank $1,655 Accounts payable 3,045 $2,697 Accrued payroll and related items 1,374 1,604 Accrued marketing programs 1,032 809 Accrued expenses 1,918 1,915 Total current liabilities 9,024 7,025 Deferred income taxes 1,487 1,487 Total liabilities 10,511 8,512 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 11,033 13,345 Net loss for period (157) (2,312) Balance at end of period 10,876 11,033 Total shareholders' equity 12,468 12,625 Total liabilities and shareholders' equity $22,979 $21,137 The accompanying notes are an integral part of these financial statements -4- [/TABLE] KIT MANUFACTURING COMPANY STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
For the 3 months ended January 31, 1998 1997 Cash flows from operating activities: Cash received from customers $13,874 $19,708 Interest received 27 15 Cash received from operations 13,901 19,723 Cash paid to suppliers and employees 16,196 21,990 Interest paid 10 7 Income taxes paid - 35 Cash disbursed for operations 16,206 22,032 Net cash used in operating activities (2,305 (2,309) Cash flows from investing activities: Purchase of property, plant and equipment (685) (699) Changes in other current and non-current assets 299 (158) Net cash used in investing activities (386) (857) Cash flows from financing activities: Proceeds from line-of-credit borrowings 1,655 3,300 Net cash provided by financing activities 1,655 3,300 Net increase (decrease) in cash (1,036 134 Cash at beginning of year 3,673 2,281 Cash at end of period $2,637 $2,415 Reconciliation of net loss to net cash used in operating activities: Net loss ($157) ($322) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 162 169 Decrease in accounts receivable 55 3,118 Increase in inventories (2,599) (3,394) Increase (decrease) in accounts payable and accrued liabilities 344 (1,621) Decrease in income taxes payable (110) (259) Net cash used in operating activities ($2,305) ($2,309) 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. Options have not been included in the computations because their effect would not be dilutive. Note C - 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 D - The results of the period are not necessarily indicative of annual results due to seasonality of the business. Note E - Financial information contained herein is unaudited. Note F - 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 G - In June 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) No. 130, "Reporting Comprehensive Income". FAS 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. FAS 130 is effective for fiscal years beginning after December 15, 1997. Management has not assessed the impact of adopting this standard. Note H - In June 1997, FASB issued FAS 131, "Disclosures about Segments of an Enterprise and Related Information". FAS 131 requires that public business enterprises report certain information about operating segments in complete sets of financial statements of the enterprise and in condensed financial statements of interim periods to shareholders. FAS 131 is effective for fiscal years beginning after December 15, 1997. Management has not assessed the impact of adopting this standard. - 6 - KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION - JANUARY 31, 1998 COMPARED TO OCTOBER 31, 1997 Under first quarter market conditions, the Company borrowed on its line of credit to increase its inventories to prepare for the spring selling season. The Company's working capital decreased $112,000 due to the decrease in accounts receivable because of the decline in sales and the increase in current liabilities because of build up of inventories during the first quarter. The current ratio was 1.8:1 at January 31, 1998 compared to 2.0:1 at October 31, 1997. The Company's liquidity position as reflected in the current ratio described above, capital resources, including excess plant capacity, working capital, and unused line of credit, are considered to be adequate to provide for near term anticipated growth. RESULTS OF OPERATIONS - QUARTER ENDED JANUARY 31, 1998 COMPARED TO QUARTER ENDED JANUARY 31, 1997 Total sales for the quarter ended January 31, 1998 were $13,819,000, a 17% decrease from sales of $16,589,000 for the same quarter of the prior year. The decrease consisted of a 21% increase in manufactured housing sales and a 34% decrease in recreational vehicle sales. Manufactured housing sales increased due to increased marketing efforts, more competitive product pricing, and continued offerings of a wide range of products. RV sales decreased due to the continued shift in sales of lower priced entry level products. Cost of sales decreased 15% from the same quarter of the prior year due primarily to the decline in sales volume, but increased 2% as a percent of sales. The decline in gross profit margins compared to the first quarter of fiscal 1997 is chiefly attributed to increased sales of lower margin RV's in the entry level market. Selling, general and administrative expenses decreased 37% over the same quarter of the prior year and decreased 3% as a percent of sales. This was due primarily to planned reductions in marketing costs. Net interest income for the current quarter increased in comparison to net interest income in the same quarter of the prior year. This was a result of an increase in the average net short-term investments and lower average borrowing levels. The net loss for the three months ended January 31, 1998 was $157,000, or $0.14 per share, compared to net loss of $322,000, or $0.29 per share, for the same quarter of the prior year. -7- PART II OTHER INFORMATION Item 6 (a). See Index to Exhibits on page 10. Item 6 (b). Form 8-K was not required to be filed during the quarter ended January 31, 1998. - 8 - 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 3/9/98 /s/ Dan Pocapalia Dan Pocapalia Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) DATE 3/9/98 /s/ Bruce K. Skinner Bruce K. Skinner Vice President and Treasurer (Principal Financial and Accounting Officer) - 9 - KIT MANUFACTURING COMPANY INDEX TO EXHIBITS Item: (27) Financial Data Schedule - 10 - EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS OCT-31-1998 JAN-31-1998 2,367,000 0 4,478,000 42,000 6,001,000 16,127,000 6,798,000 5,913,000 22,979,000 9,024,000 0 0 0 1,592,000 0 22,979,000 13,819,000 13,819,000 12,918,000 14,101,000 1,183,000 0 17,000 (265,000) (108,000) (157,000) 0 0 0 (157,000) .14 .14
-----END PRIVACY-ENHANCED MESSAGE-----