<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, 2000
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 $.01, outstanding: 7,000,000.
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RESULTS OF OPERATIONS
Net sales decreased 24.4% in the first quarter of the fiscal year ending August
2001 to $2,529,139 from $3,343,516 a year ago. This is a result of a sharp
decline in both of the markets served by the registrant, heavy trucks and
recreational vehicles. There did not appear to be any decline in the
registrant's market share in either of these markets
The registrant operated at a $99,041 loss in the first quarter of the 2000
fiscal year versus a profit of $10,185 in the first quarter a year ago. The
before tax loss from operations was $31,817, but in addition the registrant
wrote off $88,832 of receivables as a result of the liquidation of one of the
registrant's seat track distributors.
Selling, general and administrative expenses decreased 1.8% to $297,249 in the
first quarter of fiscal 2001 versus $302,724 in the year ago quarter.
The Company's operations are classified into two principal reportable segments
that provide different products or services. Separate management of each segment
is required because each business unit is subject to different marketing,
production and technology strategies. Below is summarized segmental data for the
three months ended November 30, 2000 and 1999.
<TABLE>
<CAPTION>
TUBING SEAT TRACK TOTAL
2000 1999 2000 1999 2000 1999
<S> <C> <C> <C> <C> <C> <C>
External Revenue 1,785,058 2,353,083 744,081 990,433 2,529,139 3,343,516
Intersegment Revenue 0 0 0 0 0 0
Profit (loss) (173,464) (126,463) 36,786 136,648 (136,678) 10,185
</TABLE>
LIQUIDITY AND SOURCES OF CAPITAL
$407,253 of shareholder debt plus $517,927 of accrued interest was converted to
paid in capital during the first quarter of fiscal 2001. There was no net effect
on cash but equity increased by $925,180. Operations during the quarter consumed
$17,879 of cash, equipment purchases consumed $43,286, and there was a reduction
in bank debt of $91,670 resulting in negative cash flow of $152,835 for the
quarter.
CONTINGENT MATTERS
There are no contingencies or consequential uncertainties known that will
materially affect the financial information as presented.
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KNUSAGA CORPORATION
BALANCE SHEET (UNAUDITED)
NOVEMBER 30, 2000
<TABLE>
<CAPTION>
ASSETS November 30, 2000
<S> <C>
CASH $ 296,078
ACCOUNTS RECEIVABLE $1,600,156
ACCOUNTS RECEIVABLE - OTHER $ 144,195
INVESTMENT IN JOINT VENTURE $ 18,568
INVENTORIES $1,310,921
PREPAID EXPENSE $ 57,167
----------
TOTAL CURRENT ASSETS $3,427,085
NET PROPERTY, PLANT AND EQUIPMENT $2,414,850
OTHER ASSETS $ 15,205
----------
TOTAL ASSETS $5,857,140
LIABILITIES
ACCOUNTS PAYABLE $1,320,107
NOTES PAYABLE $1,480,041
ACCRUED LIABILITIES $ 287,951
----------
TOTAL CURRENT LIABILITIES $3,088,099
LONG TERM DEBT $ 364,678
TOTAL LIABILITIES
STOCKHOLDERS EQUITY (DEFICIENCY)
Common Stock, par value $.01 per share authorized $ 70,007
7,000,000 shares issued and outstanding
Preferred stock, par value $.01 per share $ 175,000
authorized 500,000 shares, issued and outstanding
175,000 of Class A $1.00 stated value, 4%
non-cumulative, non-voting
ADDITIONAL PAID-IN CAPITAL $1,291,545
RETAINED EARNINGS $ 867,811
----------
TOTAL STOCKHOLDERS EQUITY $2,404,363
----------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY $5,857,140
</TABLE>
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KNUSAGA CORPORATION
STATEMENT OF INCOME (UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 2000 AND NOVEMBER 30, 1999
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 2000 NOVEMBER 30, 1999
<S> <C> <C>
NET SALES $ 2,529,139 $ 3,343,516
COST OF GOODS SOLD $ 2,208,777 $ 2,959,677
----------- -----------
GROSS PROFIT $ 320,361 $ 383,839
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES $ 423,338 $ 302,724
MISC. INCOME (EXPENSE) ($ 55,307) ($ 50,421)
----------- -----------
INCOME (LOSS) BEFORE TAXES ($ 158,284) $ 30,694
PROVISION FOR FEDERAL INCOME TAXES ($ 21,606) $ 20,508
----------- -----------
NET INCOME BEFORE EXTRAORDINARY ITEMS ($ 136,678) $ 10,185
EXTRAORDINARY ITEMS: $-0- $-0-
TAX BENEFIT OF OPERATING
LOSS CARRYFORWARD
----------- -----------
NET INCOME ($ 99,041) $ 10,185
PAR SHARE OF COMMON STOCK AND COMMON STOCK
EQUIVALENTS:
AVERAGE OUTSTANDING SHARES 7,000,000 7,000,000
.00 .00
THE FINANCIAL STATEMENTS INCLUDED IN THIS 7,000,000
REPORT REFLECT ALL ADJUSTMENTS, WHICH, IN .00
THE OPINION OF MANAGEMENT, ARE NECESSARY
FOR FAIR PRESENTATION.
</TABLE>
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KNUSAGA CORPORATION
STATEMENT OF CASH FLOW (UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 2000 AND NOVEMBER 30, 1999
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
NOVEMBER 30, 2000 NOVEMBER 30, 1999
<S> <C> <C>
CASH PROVIDED BY (USED FOR) OPERATIONS
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS, ($ 136,678) $ 10,185
EXCHANGE LOSS (94)
NON-CASH EXPENSE INCLUDED IN NET INCOME $ 89,440 $ 85,270
DEPRECIATION
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLE ($ 23,981) $427,439
INVENTORIES ($ 59,171) ($ 55,888)
PREPAID EXPENSES $ 7,260 $ 3,702
OTHER ASSETS $ 501 $ 7,773
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE $ 113,119 ($ 50,054)
ACCRUED LIABILITIES ($ 46,005) ($125,757)
--------- --------
NET CASH PROVIDED BY (USED FOR) ($ 55,515) $302,575
OPERATING ACTIVITIES
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
PURCHASES OF EQUIPMENT ($ 5,650) $ 89,604
CASH PROVIDED BY (USED FOR) BEFORE
FINANCING ACTIVITIES
CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
DEBT INCREASE (DECREASE)
SHORT-TERM 14,122
LONG-TERM ($ 105,792) ($ 36,174)
---------- ---------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES ($ 91,670) ($ 36,174)
INCREASE (DECREASE) IN CASH ($ 152,835) $176,796
BALANCE AT BEGINNING OF PERIOD $ 448,913 $495,744
BALANCE AT END OF PERIOD $ 296,078 $672,541
</TABLE>
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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.
KNUSAGA CORPORATION
By: /s/ Jerry Luptak
-------------------
Vice President
Dated: January 12, 2001
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the date indicated:
By: /s/ James G. Musser Date: January 12, 2001
-------------------------------- ----------------
Director/President
(Principal Executive Officer and
Controller)
By: /s/ Jerry D. Luptak Date: January 12, 2001
-------------------------------- ----------------
Director
Vice President, Finance and
General Counsel
(Principal Financial Officer)
By: /s/ Harold Beznos Date: January 12, 2001
-------------------------------- ----------------
Director Secretary-Treasurer
