-----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, Kq3yuCLNknYhgihe1Sck7XM6odbUTMtOy/7swHyVlW+5RRXyzUXogGwZzq8Bc0gn b30xn88sQcbJooQLTcBePQ== 0000056151-97-000003.txt : 19970610 0000056151-97-000003.hdr.sgml : 19970610 ACCESSION NUMBER: 0000056151-97-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970609 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: 97620937 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 April 30, 1997 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 April 30, 1997. Index to Exhibits - Page 11 1 of 11 Pages - ----------------------------------------------------------------------------- PART I FINANCIAL INFORMATION - 2 - - ------------------------------------------------------------------------------ STATEMENTS OF INCOME (Dollars in Thousands Except Per Share Amounts) (Unaudited)
Three Months Ended Six Months Ended April 30, April 30, 1997 1996 1997 1996 Sales $23,134 $28,679 $39,723 $46,650 Costs and Cost of sales 22,108 25,229 37,365 41,246 Selling, general and administrative 2,198 2,585 4,085 4,527 ------ ------ ------ ------ 24,306 27,814 41,450 45,773 Operating (loss) (1,172) 865 (1,727) 877 Other expense: Interest expense, net (77) (26) (68) (26) ----- ----- ----- ----- (Loss) income before income taxes (1,249) 839 (1,795) 851 (Benefit) provision for income taxes (Note A) (512) 336 (736) 340 ----- ----- ----- ----- Net (loss) income ($737) $503 ($1,059) $511 ====== ====== ====== ===== Shares outstanding (Note B) 1,110,934 1,110,934 1,110,934 1,110,934 ========= ========= ========= ========= Net (loss) income per share (Note B) ($0.66) $0.45 ($0.95) $0.46 ======= ===== ===== ===== 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 1997 1996 (Unaudited) ASSETS Cash and cash $2,821 $2,281 Accounts receivable, net 6,332 8,026 Inventories: Raw 3,937 3,424 Work in process 927 1,234 Finished goods 2,805 2,511 ----- ----- Total inventories 7,669 7,169 Prepaids and deferred income 1,292 1,241 Income taxes receivable 736 - ------ ------ Total current assets 18,850 18,717 Property, plant and 6,951 6,319 Other assets 57 103 ------ ------ Total assets $25,858 $25,139 ====== ====== LIABILITIES AND SHAREHOLDERS' Note payable to bank $4,478 - Accounts payable 2,839 $3,685 Accrued payroll and related 1,462 2,256 Accrued marketing programs 972 1,104 Accrued expenses 760 1,664 Income taxes payable - 24 ------ ----- Total current 10,511 8,733 Deferred income taxes 1,469 1,469 ------ ------ Total liabilities 11,980 10,202 Commitments and contingencies Shareholders' equity Common stock and additional paid-in capital, issued and outstanding 1,110,934 1,592 1,592 Retained earnings: Balance at beginning of period 13,345 11,914 Net (loss) income for (1,059) 1,431 ------ ------ Balance at end of period 12,286 13,345 Total shareholders' equity 13,878 14,937 ------ ------ Total liabilities and shareholders' equity $25,858 $25,139 ====== ======
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 ended April 30, 1997 1996 Cash flows from operating activities: Cash received from customers $41,417 $46,149 Interest received 37 14 ------ ------ Cash received from operations 41,454 46,163 ------ ------ Cash paid to suppliers and employees 44,288 46,114 Interest paid 106 41 Income taxes paid 35 317 ------ ------ Cash disbursed for operations 44,429 46,472 ------ ------ Net cash used in operating activities (2,975) (309) ----- ----- Cash flows from investing activities: Purchase of property, plant and equipment (866) (135) Changes in other current and non-current assets (98) 28 ----- ---- Net cash used in investing activities (964) (107) ----- ---- Cash flows from financing activities: Proceeds from line-of-credit borrowings 9,280 1,400 Principal payments on line-of-credit borrowings (4,801) (400) ----- ----- Net cash provided by financing activities 4,479 1,000 ----- ----- Net increase in cash 540 584 Cash at beginning of year 2,281 2,218 ----- ----- Cash at end of period $2,821 $2,802 ===== ===== Reconciliation of net income to net cash used in Net (loss) ($1,059) $511 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 336 332 Decrease (increase) in accounts 1,694 (502) Increase in inventories (499) (1,948) (Decrease) increase in accounts payable and (2,676 1,275 (Decrease) increase in income taxes (771) 23 ------ ----- Net cash used in operating activities ($2,975) ($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 benefit or provision 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 w h i c h 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 -In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share. FAS 128 specifies the computation, presentation, and disclosure requirements for EPS. FAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods. Management has assessed that the impact of adopting this standard will have no effect on EPS. - 6 - - -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION -APRIL 30, 1997 COMPARED TO OCTOBER 31, 1996 Under second quarter market conditions, the Company continued to borrow on its line of credit to maintain inventory levels to provide for the anticipated second quarter sales. The Company's working capital decreased $1,645,000 due primarily to an increase in note payable to bank. The current ratio was 1.8:1 at April 30, 1997 and 2.1:1 at October 31, 1996. 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, 1997 COMPARED TO QUARTER ENDED APRIL 30, 1996 Total sales for the quarter ended April 30, 1997 were $23,134,000, a 19 percent decrease from sales of $28,679,000 for the same quarter of the prior year. The increase consisted of a 26 percent decrease in r e creational vehicle sales and an increase of 15 percent in manufactured housing sales. RV sales saw an decrease as a result of a slowing in retail market conditions due to severely poor weather conditions in our market areas. Manufactured housing is continuing to experience the results of a general resurgence in the housing market in our sales territories. Cost of sales decreased 12 percent from the same quarter of the prior year due primarily to the decline in sales but increased 8 percent as a percent of sales. The decrease in gross profit margins is chiefly attributed to a temporary increase in production costs due to a consolidation of the recreational vehicle plants in Caldwell, Idaho. Selling, general and administrative expenses decreased 15 percent over the same quarter of the prior year and rose less than one percent as a percent of sales. The decrease was due to an decrease in marketing costs. Net interest expense increased nearly two times over the same quarter in the prior fiscal year. This was a consequence of a significant increase in the average net short-term borrowings. The net loss from for the three months ended April 30, 1997 was $737,000, or $0.66 per share, compared to net income of $503,000, or $0.45 per share, for the same quarter of the prior year. -7- - -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS - SIX MONTHS ENDED APRIL 30, 1997 COMPARED TO SIX MONTHS ENDED APRIL 30, 1996 Total sales for the six months ended April 30, 1997 were $39,723,000, a 15 percent decrease from sales of $46,650,000 for the same quarter of the prior year. The decrease consisted of a 24 percent decrease in recreational vehicle sales and a 25 percent increase in manufactured housing sales. RV sales both in the Midwestern and Western sales regions saw a decrease as a result of a significant decline in consumer demand due to the severe winter and early spring weather conditions. The manufactured housing sales increase was chiefly the result of a rise in consumer demand for manufactured homes as well as an increase in the number of dealers in our retail network. Cost of sales decreased 9 percent from the same period of the prior year due to the 15 percent decrease in sales volume, but increased 6 percent as a percent of sales. The decline in gross profit margins is chiefly attributable to a temporary increase in production costs which are the result of a consolidation of the RV plants in Caldwell, Idaho. The restructuring was done to allow for the manufacture of all lines o f the recreational vehicle products in one location thereby increasing operational control and production efficiency. Selling, general and administrative expenses decreased 10 percent over the same period of the prior year but rose less than one percent as a percent of sales. The decrease was primarily due to decreases in marketing costs. Net interest expense increased 160 percent. This was a consequence of a significant increase in the average net short-term borrowing. The net loss for the six months ended April 30, 1997 was $1,059,000, or $.95 per share, compared to net income of $511,000, or $0.46 per share, for the same period of the prior year. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per S h are. FAS 128 specifies the computation, presentation, and disclosure requirements for EPS. FAS 128 is effective for financial statements issued for periods ending after December 15, 1997, including interim periods. Management has assessed that the impact of adopting this standard will have no effect on EPS. -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, 1997. - 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 2, 1997 /s/ Dan Pocapalia Dan Pocapalia Chairman of the Board, Chief Executive Officer and President (Principal Executive Officer) - 10 - - -------------------------------------------------------------------------------- KIT MANUFACTURING COMPANY INDEX TO EXHIBITS Item: (27) Financial Data Schedule - 11 - - -------------------------------------------------------------------------------- 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. 6-MOS OCT-31-1997 APR-30-1997 2,821,000 0 6,332,000 0 7,669,000 18,850,000 6,951,000 0 25,858,000 10,511,000 0 0 0 1,592,000 12,286,000 25,858,000 39,723,000 39,723,000 37,365,000 41,518,000 0 0 0 (1,795,000) (736,000) (1,059,000) 0 0 0 (1,059,000) (0.95) 0
-----END PRIVACY-ENHANCED MESSAGE-----