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Previous: TEXTRON INC, 10-K, 1998-03-16 |
Next: CONNECTICUT WATER SERVICE INC / CT, DEF 14A, 1998-03-16 |
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended November 30, 1997
Commission File Number 0-7795
KNUSAGA CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
62-1004034
(I.R.S.) Employer Identification Number
3578 S. VAN DYKE
ALMONT, MI 48803
(Address of principal executive office and zip code)
Registrant's telephone number (include area code): (810) 798-8567
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 twelve months (or 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.
X YES NO
--- ---
Shares of Common Stock Par Value $.04, outstanding: 7,000,000.
-1-
<PAGE> 2
RESULTS OF OPERATIONS
Net Sales increased 52% in the first quarter of fiscal year ending August 1998
to $2,988,000. This represents a volume increase of $1,018,000 as compared to
the first quarter of 1996. The majority of the sales increase is due to
increased production and tubing requirements of our customer, Ford Truck
Division, Louisville, Kentucky. There are no price increases in net sales for
this period. The reason being is that the truck industry does not allow price
increases on parts once placed in production.
Gross profits from operations increased to 26.1% of sales during the quarter
November 30, 1997, as compared to year earlier period of 12.9%. This positive
result is primarily due to a reduction of raw material cost, and secondarily to
increased labor efficiency.
Selling and Administrative expenses decreased to 8.0% of sales during the
quarter as compared to 9.5% of the year earlier period.
Net income increased to $327,000 for the quarter as compared to $14,000 of the
previous year. The significant improvement in net income is the result of
stable margins on improved sales and the reduction of material cost and other
expenses.
LIQUIDITY AND SOURCES OF CAPITAL
The company's cash flow position before financing activities for the three
months ending November 30, 1997, generated $383,000. This cash flow, along
with a bank balance reduction of $260,000, was used to reduce short and
long-term debt.
CONTINGENT MATTERS
There are no contingencies or consequential uncertainties known that will
materially affect the financial information as presented.
-2-
<PAGE> 3
KNUSAGA CORPORATION
BALANCE SHEET (UNAUDITED)
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
ASSETS November 30, 1997
<S> <C>
CASH $ 16,234
ACCOUNTS RECEIVABLE $1,354,629
ACCOUNTS RECEIVABLE - OTHER $ 94,143
INVENTORIES $ 473,344
PREPAID EXPENSE $ 94,312
----------
TOTAL CURRENT ASSETS $2,032,662
NET PROPERTY, PLANT AND EQUIPMENT $2,089,733
OTHER ASSETS $ 2,646
----------
TOTAL ASSETS $4,125,041
LIABILITIES
ACCOUNTS PAYABLE $ 625,283
NOTES PAYABLE $ 268,320
ACCRUED LIABILITIES $ 307,828
----------
TOTAL CURRENT LIABILITIES $1,201,431
LONG TERM DEBT $1,316,540
----------
TOTAL LIABILITIES $2,517,971
STOCKHOLDERS EQUITY (DEFICIENCY)
Common Stock, par value $.01 per
share authorized 7,000,000 shares
issued and outstanding. $ 70,000
Preferred stock, par value $.01 per
share authorized 500,000 shares,
issued and outstanding 175,000 of
Class A $1.00 stated value, 4%
non-cumulative, non-voting. $ 175,000
ADDITIONAL PAID-IN CAPITAL $ 366,365
RETAINED EARNINGS $ 995,705
----------
TOTAL STOCKHOLDERS EQUITY $1,607,070
----------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $4,125,041
</TABLE>
-3-
<PAGE> 4
KNUSAGA CORPORATION
STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 1997 AND NOVEMBER 30, 1996
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
<S> <C> <C>
NET SALES $2,988,804 $1,971,113
COST OF GOODS SOLD $2,208,638 $1,716,464
---------- ----------
GROSS PROFIT $ 780,166 $ 254,649
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES $ 238,204 $ 188,127
MISC. INCOME (EXPENSE) $ 44,306 ($ 50,366)
---------- ----------
INCOME (LOSS) BEFORE TAXES $ 497,657 $ 16,156
PROVISION FOR FEDERAL INCOME TAXES $ 170,195 $ 2,500
---------- ----------
NET INCOME BEFORE EXTRAORDINARY ITEMS $ 327,462 $ 13,656
EXTRAORDINARY ITEMS:
TAX BENEFIT OF OPERATING LOSS
CARRYFORWARD
---------- ----------
NET INCOME $ 327,462 $ 13,656
PAR SHARE OF COMMON STOCK AND COMMON
STOCK EQUIVALENTS:
7,000,000 7,000,000
AVERAGE OUTSTANDING SHARES .04 0.00
</TABLE>
THE FINANCIAL STATEMENTS INCLUDED IN THIS REPORT REFLECT ALL ADJUSTMENTS,
WHICH, IN THE OPINION OF MANAGEMENT, ARE NECESSARY FOR FAIR PRESENTATION.
-4-
<PAGE> 5
KNUSAGA CORPORATION
STATEMENT OF CASH FLOW (UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 1997 AND NOVEMBER 30, 1996
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 1997 NOVEMBER 30, 1996
<S> <C> <C>
CASH PROVIDED BY (USED FOR) OPERATIONS
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS,
NON-CASH EXPENSE INCLUDED IN NET INCOME $327,462 $ 13,656
DEPRECIATION $ 71,250 $ 50,787
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLE $ 70,915 ($174,788)
INVENTORIES $100,109 $ 32,002
PREPAID EXPENSES $ 8,759 $ 40,909
OTHER ASSETS ($ 62,100) ($ 2,941)
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE ($ 84,588) $ 35,691
ACCRUED LIABILITIES $ 21,197 $ 33,859
--------- ---------
NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES $453,004 $ 29,175
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
PURCHASES OF EQUIPMENT ($ 69,706) ($ 54,873)
--------- ---------
NET CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES ($ 69,706) ($ 54,873)
CASH PROVIDED BY (USED FOR) BEFORE
FINANCING ACTIVITIES $383,298 ($ 25,698)
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
DEBT INCREASE (DECREASE)
SHORT-TERM ($580,000) $105,000
LONG-TERM ($ 63,358) ($ 91,675)
--------- ---------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES ($643,358) $ 13,325
INCREASE (DECREASE) IN CASH ($260,060) ($ 12,373)
BALANCE AT BEGINNING OF PERIOD $276,294 $ 34,020
BALANCE AT END OF PERIOD $ 16,234 $ 21,647
</TABLE>
-5-
<PAGE> 6
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> NOV-30-1997
<CASH> 16,234
<SECURITIES> 0
<RECEIVABLES> 1,448,772
<ALLOWANCES> 0
<INVENTORY> 473,344
<CURRENT-ASSETS> 2,032,662
<PP&E> 3,120,217
<DEPRECIATION> 1,030,484
<TOTAL-ASSETS> 4,125,041
<CURRENT-LIABILITIES> 1,201,431
<BONDS> 509,465
0
175,000
<COMMON> 70,000
<OTHER-SE> 1,432,070
<TOTAL-LIABILITY-AND-EQUITY> 4,125,041
<SALES> 2,988,804
<TOTAL-REVENUES> 2,989,272
<CGS> 2,208,638
<TOTAL-COSTS> 2,446,842
<OTHER-EXPENSES> 44,306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44,935
<INCOME-PRETAX> 497,657
<INCOME-TAX> 170,195
<INCOME-CONTINUING> 327,462
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 327,462
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
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