U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to ______________
Commission file number 0 - 7 0 9 3
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MOD-U-KRAF HOMES, INC.
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(Exact name of small business issurer as
specified in its charter)
VIRGINIA 54-0893908
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
P. O. BOX 573, ROCKY MOUNT, VIRGINIA 24151
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(Address of principal executive offices)
(703) 483-0291
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(Issuer's telephone number)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issure (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 813,649
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<PAGE>
1
MOD-U-KRAF HOMES, INC.
INDEX
PART I - FINANCIAL INFORMATION
Balance Sheets 2
Statements of Income 3
Statements of Cash Flows 4
Management's Discussion and Analysis 5
Notes to Financial Information 6
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 7
<PAGE>
2
MOD-U-KRAF HOMES, INC.
Consolidated Balance Sheets
March 31, 1995 and 1994
ASSETS 1995 1994
---------- ----------
CURRENT ASSETS
Cash and cash equivalents $ 912,271 $ 824,566
Certificates of deposit 307,954 500,000
Trade receivables 201,847 84,441
Inventories (Note 2) 1,688,023 1,726,954
Notes receivable, current portion (Note 3) 1,359,184 1,038,188
Accrued interest receivable 3,562 10,414
Prepaid expenses 55,423 44,947
Income taxes receivable 0 8,470
Deferred income taxes, current protion 54,124 62,550
---------- ----------
Total current assets 4,582,388 4,300,530
LONG-TERM NOTES RECEIVABLE (Note 3) 154,807 155,507
PROPERTY AND EQUIPMENT, at cost less
accumulated depreciation
1995 $1,689,560; 1994 $1,597,012. (Note 4) 899,303 914,492
OTHER ASSETS
Deferred income taxes 442,433 479,318
Cash surrender value of officer's
life insurance 77,414 59,978
---------- ----------
$ 6,156,345 $ 5,909,825
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term liabilities 59,376 54,942
Accounts payable and other liabilities 354,479 429,446
Accrued compensation 170,270 134,969
Customer deposits 43,718 36,462
Income taxes payable 33,403 0
---------- ----------
Total current liabilities 661,246 655,819
LONG-TERM DEFERRED COMPENSATION (Note 5) 1,043,195 1,094,577
POST RETIREMENT BENEFITS (Note 6) 136,782 144,776
---------- ----------
Total liabilities 1,841,223 1,895,172
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STOCKHOLDERS' EQUITY
Common stock, $1 par value, 2,000,000
shares authorized: shares issued and
outstanding 1995 813,649, 1994 813,649. 813,649 813,649
Additional Paid in Capital 440,420 440,420
Retained earnings 3,061,053 2,760,584
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4,315,122 4,014,653
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$ 6,156,345 $ 5,909,825
========== ==========
Accompanying notes are an integral part of these financial statements.
<PAGE>
3
MOD-U-KRAF HOMES, INC.
Consolidated Statement of Income
Quarters Ended March 31, 1995 and March 31, 1994
1995 1994
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Net Sales $ 2,016,883 $ 1,407,585
Cost of Sales 1,456,788 1,017,002
---------- ----------
560,095 390,583
Selling, General and Administrative
Expenses 482,548 419,632
---------- ----------
Income/<Loss> from Operations 77,547 (29,049)
Deferred Compensation Expense 23,433 24,421
Post Retirement Benefits Expense 2,950 (1,894)
Non-operating Income/<Expenses> 51,317 35,318
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Income/<Loss> Before Income Taxes 102,481 (16,258)
Federal and State Income Taxes 31,833 (3,999)
Deferred Income Tax Adjustment 2,051 9,148
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Income Taxes 33,884 5,149
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Net Income / <Loss> $ 68,597 $ (21,407)
========== ==========
Earnings per share:
Net Income / <Loss> $ 0.08 $ (0.03)
========== ==========
Depreciation Included in Above Cost $ 37,141 $ 40,141
========== ==========
Accompanying notes are an integral part of these financial statements.
<PAGE>
4
MOD-U-KRAF HOMES, INC.
Consolidated Statement of Cash Flows
Quarters Ended March 31, 1995 and 1994
1995 1994
OPERATING ACTIVITIES ---------- ----------
Net Income/<Loss> $ 68,597 $ (21,407)
Noncash <income> expenses included
in income or <loss>:
Depreciation 37,141 40,141
Deferred income taxes 2,051 9,148
Gain on sale of property and equipment 0 0
Increase in cash value of life insurance 2,508 (2,616)
Accrued interest receivable 1,849 (1,419)
Adjustments to deferred compensation (12,179) (11,191)
Adjustments to post retirement benefits (1,959) (1,894)
<Increase> decrease in:
Trade receivables 5,263 (7,753)
Inventories (481,067) (253,526)
Prepaid Expenses 15,890 166
Income taxes receivable 0.00 -8470.00
<Decrease> increase in:
Accounts payable and other Liabilities -24737.00 147528.00
Accrued compensation -69875.00 -43115.00
Customer deposits (104,831) (12,486)
Income taxes payable -3639.00 -5851.00
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Net cash provided by (used in)
operations (564,988) (172,745)
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INVESTING ACTIVITIES
Proceeds from sale of property & equipment 0 0
Purchase of plant & equipment (38,745) (43,268)
<Increase> decrease in notes receivable 116695.00 -145028.00
<Increase> decrease in certificates
of deposit 196982.00 100000.00
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Net cash provided by (used in)
investing activities 274,932 (88,296)
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FINANCING ACTIVITIES
Purchase of common stock for retirement 0 0
Cash dividends paid (24,409) (24,906)
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Net cash provided by (used in)
financing activities -24409.00 -24906.00
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Net increase (decrease) in cash (314,465) (285,947)
CASH
Beginning 1,226,736 1,110,513
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Ending $ 912,271 $ 824,566
=========== ===========
SUPPLEMENTAL DISCOLOSRES OF CASH FLOW INFORMATION
Cash payments for:
Interest $ 0 $ 445
Income taxes $ 35,703 $ 17,665
Accompanying notes are an integral part of these financial statements.
<PAGE>
5
MOD-U-KRAF HOMES, INC
Management's Discussion and Analysis
of the First Quarter Statements
Net sales for the first quarter of 1995 were $2,016,883 as compared
to $1,407,585 for the first quarter of 1994, a 43.29% increase. The mild
winter enabled us to ship units for the entire quarter.
Cost of Sales was 72.23% of net sales for the first quarter of 1995
and 72.25% for the first quarter of 1994. Gross profit was 27.77% for
the first quarter of 1995 and 27.75% for the first quarter of 1994.
Selling, General and Administrative expenses was 23.93% of net sales
for the first quarter of 1995 and 29.81% for the first quarter of 1994.
Net income for the first quarter of 1995 is $68,597 compared to a
net loss of $21,407 for the first quarter of 1994. This is $0.08 per
share for the first quarter of 1995 and $<0.03> per share for the same
period in 1994.
There are no significant variances. The mild weather this year as
compared to the extreme inclement weather last year has enabled us to
record the best first quarter sales results since the inception of the
company. The updated pricing of our new line of homes that was presented
at our April sales meeting will help in our marketing efforts for the
remainder of the year.
There has been no material changes in liquidity and capital resources.
<PAGE>
6
MOD-U-KRAF HOMES, INC.
NOTES TO FINANCIAL INFORMATION
1. The financial information furnished herein is not certified, but re-
flects all adjustments, consisting only of normal recurring adjust-
ments which are, in the opinion of management, necessary to a fair
statement of the results for the quarter ended March 31, 1995. The
results for the quarter ended March 31, 1995 are not necessarily in-
dicative of results to be expected for the entire year. The housing
industry is seasonal in nature and revenues to the Company during
the period April 1 to September 30 are normally greater than revenue
during the balance of the year.
Both primary & fully diluted net income per common share are based
on the weighted average number of shares of common stock outstanding
during each year and common stock equivalents of dilutive stock
options.
2. Inventories
The components of inventories are as follows 1995 1994
---- ----
Raw Materials 768,789 760,217
Work-In-Progress 91,082 85,006
Finished Goods 536,640 317,807
Land and Units held for sale 291,511 563,924
----------- -----------
$ 1,688,022 $ 1,726,954
=========== ===========
3. Notes Receivable 1995 1993
---- ----
Various mortgage notes receivable secured by
deeds of trust 184,792 188,583
Demand note receivabe with interest payable
quarterly at 9%, unsecured 15,075 17,675
Life insurance note receivable from an
officer of the Company (non-interest bearing) 6,945 11,754
Various construction loans(all current) 1,307,179 975,683
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1,513,991 1,193,695
Less current portion 1,359,184 1,038,188
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$ 154,807 $ 155,507
=========== ===========
4. Property and Equipment 1995 1994
---- ----
Land and improvements 300,962 255,179
Buildings 1,073,835 1,067,173
Manufacturing equipment 896,116 860,631
Other furniture, fixtures and equipment 317,950 328,521
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2,588,863 2,511,504
Less accumulated depreciation (1,689,560) (1,597,012)
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$ 899,303 $ 914,492
=========== ===========
5. Deferred Compensation, Related Parties 1995 1994
---- ----
Present Value of deferred compensation
benefits payable to the widow of O.Z. Oliver
at $6,311 monthly until the earlier of her
death or Sept. 2006, discounted at 8.50% in
1995 and 1994. 554,538 581,854
Present Value of deferred compensation
benefits payable to Robert K. Fitts at $5,560
monthly until his death after which the
benefits are payable to his spouse until the
earlier of her death or July 2007, discounted
at 8.50% in 1995 and 1994. 540,039 559,931
Present value of estimated postretirement
benefits other than pensions discounted at
8.50% 144,776 152,510
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1,239,353 1,294,295
Less Current Maturities 59,376 54,942
----------- -----------
$ 1,179,977 $ 1,239,353
=========== ===========
6. The Board Of Directors of Mod-U-Kraf Homes, Inc. on May 3, 1995 de-
clared a $.03 per share cash dividend on all shares outstanding on
May 19, 1995 and to be paid on June 2, 1995.
7. The Company uses the annualized method in its computation of Federal
Income Taxes.
8. Revenues are recorded when the houses are delivered for sales made
on account. Cash sales paid in advance are recorded when produced.
<PAGE>
7
MOD-U-KRAF HOMES, INC.
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
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Mod-U-Kraf Homes, Inc. held its annual meeting of shareholders
on March 22, 1995. The following were elected to the Board of
Directors: Dale H. Powell, Edwin J. Campbell, J Dillard Powell,
W. Curtis Carter, Bobbie L. Oliver and Mary L. Fitts.
<PAGE>
8
MOD-U-KRAF HOMES, INC.
SIGNATURES
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.
MOD-U-KRAF HOMES, INC.
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(Registrant)
Date: May 12, 1995
s/Dale H. Powell
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Dale H. Powell
President and Chairman of the Board
s/Jeffrey L. Boudreaux
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Jeffrey L. Boudreaux
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,226,736
<SECURITIES> 504,935
<RECEIVABLES> 212,521
<ALLOWANCES> 0
<INVENTORY> 1,206,955
<CURRENT-ASSETS> 4,695,440
<PP&E> 2,550,217
<DEPRECIATION> 1,652,419
<TOTAL-ASSETS> 6,329,477
<CURRENT-LIABILITIES> 863,185
<BONDS> 0
<COMMON> 813,649
0
0
<OTHER-SE> 3,457,386
<TOTAL-LIABILITY-AND-EQUITY> 6,329,477
<SALES> 9,288,807
<TOTAL-REVENUES> 9,288,807
<CGS> 6,755,710
<TOTAL-COSTS> 8,811,919
<OTHER-EXPENSES> 114,749
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 445
<INCOME-PRETAX> 554,984
<INCOME-TAX> 246,780
<INCOME-CONTINUING> 308,204
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 308,204
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
