I enclose for filing the Annual Report on Form 10-KSB of Mod-U-Kraf Homes, Inc.
for the year ended December 31, 1996. The financial statements included in the
Annual Report do not reflect any change from the preceding year in any
accounting principles or practices or in the methods of application of those
principles or practices.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(Mark One)
[ X ] Annual report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee required)
For the fiscal year ended December 31, 1996
-------------------
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No fee required)
For the transition period from __________ to __________
Commission file number: 0 - 7 0 9 3
MOD-U-KRAF HOMES, INC.
----------------------------------------------
(Name of Small Business Issuer in Its Charter)
VIRGINIA 54-0893908
------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
P. O. BOX 573, ROCKY MOUNT, VIRGINIA 24151
---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
703 - 483 - 0291
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
NONE
------------
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK
----------------
(Title of Class)
Check whether the issuer: (1) filed all reports 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 [ ]
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-KSB.
[ X ]
State issuer's revenues for its most recent fiscal year. $11,372,471
-----------
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days.
$2,281,325 at March 1, 1997
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of March 15, 1997.
825,649 shares of Common Stock, $1 par value
Transitional Small business Disclosure Format: Yes [ ] No [ X ]
<PAGE>
Item 1. Description of Business
-----------------------
Mod-U-Kraf Homes, Inc. (the "Company"), was incorporated as a Virginia
corporation on August 19, 1971. It is engaged in the business of
manufacturing and selling custom-built sectionalized single family housing
units of its own design. The Company also customizes a commercial line of
products consisting of multi-family and diversified specialty structures.
The Company's sectionalized housing units, available in 58 standard
models, ranging in size from 705 square feet to 2,970 square feet for one and
two family dwellings, consist of two or more virtually complete sections
which are manufactured side by side on an assembly line. Various designs are
available, including Victorian, Cape Cod, vacation homes, two stories and
country homes. There are over 100 options to allow for custom choices.
Interior designs provide for great rooms, spacious kitchen-dining-living
areas, ample closets, and fireplaces. Multi-family projects can contain up
to 24,000 square feet and are custom designed to meet the needs of the
builder and as dictated by building site conditions (including inside and
outside painting and installation of kitchen cabinets and floor coverings).
After completion, the units are loaded on specially designed transporters for
delivery to the building site where they are off-loaded to a permanent
foundation previously prepared by the purchaser. After the sections are off-
loaded, either by crane or rollers, they are secured together by a "zip up"
procedure. The purchaser may then complete the sections by making plumbing
and electrical connections, carrying out final grading and landscaping, and
adding brick veneer, if desired. Prices on our products can vary depending
upon the region into which they are to be shipped. The Company believes that
when completely erected on a lot, landscaped and ready for occupancy, its
single family homes retail from $55,000 to $250,000 or more depending on the
cost of the lot. The prices of multi-family projects can range up to
$1,300,000 or more depending on the total size of the project.
During the past several years, the Company, utilizing the manufactured
section concept, has increasingly entered into a new commercial building
market consisting of condominiums, town-house apartments, dental clinics,
medical office buildings, churches, motels and many other commercial
structures adaptable to the Company's manufacturing methods and capabilities.
During 1996, the Company produced 280.5 units as compared to 222.0 units
in 1995. Gross sales of $11,372,470 and $9,083,419 in 1996 and 1995 were
comprised of 265.5 and 219.5 units sold, respectively.
The chief raw materials used in production are lumber and lumber
products, including plywood, moldings, door and window assemblies: general
building materials such as roofing, insulation, wallboard, fixtures and
hardware; and heating equipment and other appliances. These materials are
presently available at competitive prices through several suppliers serving
the area, and the Company has not experienced and does not foresee dependency
upon any single source of supply for raw material. The price of lumber has
been subject to significant fluctuations which may affect the Company's
profit margin and the prices it charges for its products. The Company passes
increased cost on to its customers by increasing sales prices from time to
time.
At March 1, 1997, the Company had a backlog of un-shipped orders for
58.0 units (representing approximately $2,535,317 in gross sales).
Comparable backlog figures at March 1, 1996 and 1995 were 51.5 units
(representing approximately $1,956,834 in gross sales) and 59.0 units
(representing approximately $2,290,123 in gross sales), respectively. The
Company believes that approximately 65% of the orders comprising the current
backlog are firm. The Company believes that 35% of the back log balance may
not be treated as firm due to a variety of factors, including unavailability
of financing for its customers, title defects or objections with respect to
land upon which customers expect to erect their homes, and weather conditions
which can affect delivery against contracts. The average delay between
booking and shipment of an order is approximately 75 days.
Company units are sold primarily in Virginia, Maryland, West Virginia
and North Carolina, although some sales have been made in South Carolina,
Kentucky, Ohio, Delaware, Tennessee, Pennsylvania and New Jersey. The
Company offers its products primarily to home builders, land developers and
realtors, although the company has acted as "turnkey" contractor in some
instances, selling several sectionalized homes directly to retail customers
and, depending on the contract, either "zipping-up" the units or completing
the entire home to final grade. Orders consist primarily of from one to
three homes, although larger orders are accepted if received.
The Company does not have long-term agreements with any customer and
does not have any single customer or large group of customers upon which a
material part of its business depends. Sales terms are flexible, varying
from cash 15 days prior to delivery to a completely secured sale with a
nominal down payment, in which the Company provides construction financing
pending sale of the units and disbursement of financing by the permanent
lender. The Company provides permanent financing in connection with a small
number of sales. (See Note 3 of Item 7, Financial Statements)
The Company does not have any material patents, licenses, franchises or
concessions, has not made any material expenditures for research and
development during the past three years and does not anticipate doing so.
The Company employs approximately 22 persons on its administrative and office
staff, 15 persons on its sales staff and 120 persons on its production and
delivery staff. None of its employees is represented by a labor union. The
Company's employment level has fluctuated, and will continue to fluctuate
with the demand for code-complying manufactured housing. Production
employment levels have been stable for the last two years and is expected to
remain stable with the new manufacturing facility in operation.
Competition in the housing industry is intense. The Company competes
not only with local, regional and national producers of manufactured housing,
including modular, panelized and mobile homes, but also with local, regional
and national home builders as well. Many of these competitors have financial
resources and productive facilities which far exceed those of the Company.
Moreover, five manufactured housing firms have plants located in or near
Rocky Mount, Virginia, and the Company must accordingly compete with these
firms for labor as well as sales.
To the extent weather conditions affect the construction or erection of
houses, the business of the Company can be seasonal, with a larger portion of
sales and shipments of its units occurring in the warmer months of the year,
generally from May through November, than during the winter months.
To the best of its knowledge, the Company is in compliance with all
applicable regulations and does not currently foresee that material capital
expenditures will be necessary to maintain such compliance or that future
compliance will significantly affect the earnings or competitive position of
the Company.
The marketing direction of the Company has recently developed two
thrusts. While the overall trend has been towards larger structures, the
Company has developed a series of smaller, lower-cost units to enable it to
compete for entry-level housing and governmental loan programs. Improvements
made in manufacturing facilities have put the Company in the position to
produce both large and smaller units efficiently.
The products of the Company are manufactured at two facilities in Rocky
Mount, Virginia. See Item 2, below. The existing plant has a production
capacity of 5 units per week and the new facility will have a production
capacity of 15 units per week.
Item 2. Description of Property.
-----------------------
The Company's production and transportation office and manufacturing
plant are located in a one-story steel building, approximately 34 years old,
on State Highway 40, one mile east of Rocky Mount, Virginia. The building is
insulated and heated with a concrete floor and totals 20,000 square feet.
Production and transportation offices, located within the plant facility, are
air conditioned and contains approximately 1,000 square feet of floor space.
In 1982 there was a one story metal and wood plumbing and electrical storage
addition with 700 square feet and a one story metal and wood break room
addition, heated and air conditioned, with 700 square feet completed. In
1984 construction was completed on a 7,200 square foot addition to the plant.
In 1988 a one story metal and wood addition containing a supply room and a
"Binks" paint booth was completed containing 1,600 square feet. In 1993 a
one story metal building that was built in 1984 which has a concrete floor
and 16' overhead doors and has 3,600 square feet was converted to a component
manufacturing area. A small portion of the plant is used for storage of
materials which will not withstand exposure to the elements. Total
manufacturing area contains approximately 33,800 square feet of space.
Four enclosed storage buildings on the property adjacent to the
manufacturing plant are used to store materials. These buildings are wood
and metal construction with concrete floors and either three or four walls
enclosed. Total enclosed storage is 17,370 square feet.
The corporate headquarters building, including the engineering office,
which is located adjacent to the Rocky Mount plant, was completed and
occupied in December 1973 and contains over 7,800 square feet of office
space. The building was constructed in the Rocky Mount plant from seven
single modules completed in the plant with plant installation of wiring,
lighting, plumbing, carpet, vinyl, and rest rooms with ceramic walls and
floors.
The property is served by a rail siding. The property includes
approximately seven acres of land that provides for, in addition to the plant
buildings, storage buildings and corporate headquarters building, room for
employee and visitor parking, storage of completed sections pending shipment
and two sales models.
In October 1977, the Company purchased a 10-acre parcel adjacent to its
Rocky Mount facilities for possible future expansion. In March 1993, an
additional 16.92 acres were purchased adjacent to the 10 acre parcel. In
October 1994 the Company exchanged, at no cost, 20.229 acres of the total
26.92 acres for 17.983 acres in the Franklin County/Town of Rocky Mount,
Virginia Industrial Park. After the exchange, there are remaining 6.691
acres owned by the Company adjacent to its Rocky Mount facilities.
The 7 acre parcel that contains the manufacturing, storage and office
buildings are separated from the 6.691 acre parcel referred to above by a
rail line.
The Company's second manufacturing facility is located on 17.983 acres
in the Franklin County/Town of Rocky Mount, Virginia Industrial Park. The
facility is a steel building, insulated with a standing rib roof. The
104,325 square foot building has a 32'6" eave height and has a sprinkler
system throughout. There is 6,680 square feet of mezzanine for additional
storage and 800 square feet of office space inside the building. The size of
the building allows for storage of all materials for the construction of the
units, reducing damage to inventory due to movement and weather. The entire
floor area is covered by 6" of finished concrete. There are 10 large doors
of which 8 are designed for "drive" through and 2 are "dock" doors for
receiving materials. There are five 4 ton bridge cranes installed to assist
in the "off-line" production of various components such as floor systems,
walls, and roof systems. The entire building is heated by propane with an
air rotation system. To allow for future expansion of the building, an
additional 8,750 square feet of finished floor and grade beams have been
added to the building. Three storm water run-off retention ponds are located
on the property. All roof drains on the building have been "piped" to those
ponds. The remainder of the finished lot is covered by a 6" compacted
surface with approximately 42,000 square yards of high traffic area underlaid
with a surface retention fabric. The property is fenced for security
purposes.
The Company's transportation and delivery fleet consists of six tractor
cabs and 52 trailers, all of which are owned by the Company. An additional
4 tractor cabs were purchased in 1996 and are expected to be put into
service by the end of the first quarter of 1997. To plan for our increased
production and more demanding state transportation regulations, the Company
has ordered four additional modular transporters to be delivered in May 1997.
The Company considers its properties and equipment generally to be well
maintained and in good condition, and adequate for the needs of its business.
Item 3. Legal Proceedings.
------------------
None
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
None
Item 5. Market for Common Equity and Related Stockholder Matters.
--------------------------------------------------------
The Corporation's common stock is traded in the over-the-counter market.
The number of shareholders as of March 6, 1997 was 415. The range of bid and
ask quotations and dividends declared for the last two calendar years are
listed below.
QUOTATIONS ON COMMON STOCK
1996 1995
-------------------------- --------------------------- Dividends
BID ASK BID ASK Declared
------------ ------------ ------------- ------------ ------------
High Low High Low High Low High Low 1996 1995
----- ----- ----- ----- ------ ----- ----- -----
First 3 1/2 -- 4 1/2 4 1/4 4 3 1/2 4 1/2 -- $0.03 $0.03
Second 4 1/8 3 1/2 4 7/8 4 1/4 4 3 3/4 4 1/2 4 1/8 $0.03 $0.03
Third 5 -- 4 1/8 6 -- 4 7/8 3 3/4 3 1/2 4 1/2 -- $0.03 $0.03
Fourth 5 -- -- 6 -- -- 3 1/2 -- 4 1/2 -- $0.03 $0.03
Source: Wheat, First Securities, Inc.
For the past 77 consecutive quarters a quarterly dividend of $0.03 per share of
common stock has been declared. The Company presently expects to pay dividends
in the future as earnings permit. The quotations herein reflect inter-dealer
prices, without mark-up, mark-down or commission, and may not represent actual
transactions.
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
1996 net sales of $11,372,471 were 25.20% higher than 1995 net sales of
$9,083,419. Our total units sold increased by 20.96% over last year. This
increase is due to the additional production from our new facility that went
into operation in August 1996.
Gross Profit percentage declined in 1996 to 24.15% from 29.17% in 1995
and 27.27% in 1994. This is also due to the start-up of our new production
facility. We have had increased manufacturing and payroll cost as we bring
production up to our desired level.
Despite the increase in production costs, we have kept Selling, general and
administrative expenses at the same level as prior years. Their percentages
were 21.30% in 1996 compared to 23.20% and 22.14% for 1995 and 1994,
respectively. To date we have not had any significant increases in staffing
requirements or overhead expenses in the Selling, general or administrative
expense area as we made the transition into our new manufacturing facility. As
volume increases, we anticipate adding administrative staff as the increased
workload.
Interest income has decreased due to the commitment of our cash to the new
plant startup. Rental income was reduced sharply in 1996 with the sale of our
remaining Ski View Complex units. In addition, our new long term debt has added
$64,000 in interest expense. We anticipate interest expense to be approximately
$114,000 in 1997 if interest rates remain stable.
Revenues and profits should show a significant increase in 1997 as we
realize the benefits of our increased production capacity. There were no other
significant variances.
Capital Resources and Liquidity
Total funds generated were sufficient to meet the requirements for plant
and equipment, debt retirement and dividends. By virtue of the cash and
accounts receivable levels, the company feels that it has adequate liquidity
for continued successful operations.
The Company completed and put into operation our new manufacturing
facility in August 1996. The cost of the 104,000 sq. ft. facility, including
improvements and equipment was approximately $2,800,000 which was financed by
an Industrial Development Bond Issue. The debt associated with this issue has
a remaining life of 18 1/2 years and bears interest at a variable rate based on
variable, tax exempt bonds. At December 31, 1996, the actual interest rate
was 4.1%.
The Company believes that the effect of inflation on the results for the
periods presented is not material.
Item 7. Financial Statements.
---------------------
MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL REPORT
December 31, 1995
C O N T E N T S
INDEPENDENT AUDITOR'S REPORT ON
THE FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Stockholders' Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Mod-U-Kraf Homes, Inc. and Subsidiary
Rocky Mount, Virginia
We have audited the accompanying consolidated balance sheets of Mod-U-
Kraf Homes, Inc. and Subsidiary as of December 31, 1996 and 1995, and the
related consolidated statements of income, stockholders' equity and cash
flows for the years ended December 31, 1996, 1995, and 1994. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Mod-U-
Kraf Homes, Inc. and Subsidiary as of December 31, 1996 and 1995, and the
results of their operations and their cash flows for the years ended December
31, 1996, 1995 and 1994 in conformity with generally accepted accounting
principles.
Brown, Edwards & Company, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS
Roanoke, Virginia
January 24, 1997
<PAGE> MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1996 and 1995
ASSETS 1996 1995
CURRENT ASSETS
Cash and cash equivalents $ 1,077,270 $1,426,738
Certificates of deposit 200,000 689,000
Trade and other receivables 52,928 63,866
Inventories (Note 2) 2,358,346 1,368,766
Notes receivable, current portion
(Note 3) 796,721 882,234
Income taxes receivable (Note 7) 46,123 -
Prepaid expenses 65,940 67,506
--------- ---------
Total current assets 4,597,328 4,498,110
LONG-TERM NOTES RECEIVABLE (Note 3) 192,906 221,418
PROPERTY AND EQUIPMENT, at cost less
accumulated depreciation (Note 4) 3,893,831 2,245,627
OTHER ASSETS
Deferred taxes (Note 7) 486,139 508,239
Cash surrender value of officers' life
insurance 116,227 95,440
Reimbursement account (Note 6) 152,706 145,516
Earnings on unused bond proceeds (Note 6) 105,474 58,124
Debt issue costs 73,310 73,030
--------- ---------
$9,617,921 $7,845,504
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt
(Note 6) $ 150,000 $ 150,000
Current portion of post-retirement
benefits (Note 5) 66,490 75,366
Accounts payable, trade and other
liabilities 525,228 356,706
Accrued compensation 201,121 232,026
Customer deposits 293,655 23,315
Income taxes payable (Note 7) - 60,364
--------- ---------
Total current liabilities 1,236,494 897,777
LONG-TERM POST-RETIREMENT BENEFITS
(Note 5) 1,080,696 1,130,822
LONG-TERM DEBT (Note 6) 2,639,755 1,234,514
COMMITMENTS AND CONTINGENCIES (Notes 6
and 12) - -
--------- ---------
Total liabilities 4,956,945 3,263,113
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $1 par value,
2,000,000 shares authorized; shares
issued and outstanding 825,649 in
1996 and 1995 $ 825,649 $ 825,649
Additional paid-in capital 459,671 459,671
Retained earnings 3,375,656 3,297,071
--------- ---------
4,660,976 4,582,391
--------- ---------
$ 9,617,921 $7,845,504
========= =========
The Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE> MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
---------- --------- ---------
Net sales $11,372,471 $9,083,419 $9,288,807
Cost of goods sold (Note 13) 8,625,822 6,433,361 6,755,710
---------- --------- ---------
Gross profit 2,746,649 2,650,058 2,533,097
Selling, general and
administrative expenses 2,423,006 2,107,624 2,056,209
---------- --------- ---------
Operating income 323,643 542,434 476,888
Post-retirements benefits
expense (Note 5) 101,877 127,010 114,749
Non-operating income, net
(Note 11) 68,365 192,085 192,845
---------- --------- ---------
Income before income taxes 290,131 607,509 554,984
Federal and state income tax
expense (Note 7) 112,468 228,685 246,780
---------- --------- ---------
Net income $ 177,663 $ 378,824 $ 308,204
========== ========= =========
Earnings per share $ .22 $ .46 $ .38
========== ========= ========
The Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE> MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1996, 1995, and 1994
Common Additional Total Total
Stock Paid-in Retained Stockholders
($1 Par) Capital Earnings Equity
--------- ---------- ---------- -----------
Balance, Dec. 31, 1993 $813,655 $440,440 $2,806,871 $4,060,966
Net income - - 308,204 308,204
Dividends paid
($.12 per share) - - ( 98,135) ( 98,135)
Other ( 6) ( 19) 25 -
------- ------- --------- ---------
Balance, Dec. 31, 1994 813,649 440,421 3,016,965 4,271,035
Net income - - 378,824 378,824
Dividends paid
($.12 per share) - - ( 98,718) ( 98,718)
Issuance of 12,000
shares of
common stock 12,000 19,250 - 31,250
------- ------- --------- ---------
Balance, Dec. 31, 1995 825,649 459,671 3,297,071 4,582,391
Net income - - 177,663 177,663
Dividends paid
($.12 per share) - - (99,078) (99,078)
------- ------- --------- ---------
Balance, Dec. 31, 1996 $825,646 $459,671 $3,375,656 $4,660,976
======= ======= ========= =========
The Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE> MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 1996, 1995, and 1994
1996 1995 1994
--------- --------- ---------
OPERATING ACTIVITIES
Net income $ 177,663 $ 378,824 $ 308,204
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 286,333 163,912 151,701
Deferred taxes 22,100 ( 9,631) 52,408
Loss (gain) on sale
of equipment 170 993 ( 11,553)
Increase in cash value of
life insurance ( 20,787) ( 15,517) ( 22,561)
Adjustment to post-
retirement benefits ( 59,002) ( 47,303) ( 53,889)
Change in certain current
assets and liabilities:
(Increase) decrease in:
Trade and other
receivables 10,938 92,295 ( 71,717)
Inventories ( 989,580) ( 161,811) 266,473
Income tax receivable ( 46,123) - -
Prepaid expenses 1,566 3,808 ( 26,200)
(Decrease) increase in:
Accounts payable, trade
and other liabilities 168,522 ( 27,859) 88,818
Accrued compensation ( 30,905) ( 2,769) 70,537
Customer deposits 270,340 ( 125,234) 99,601
Income taxes payable ( 60,364) 23,322 31,191
--------- --------- ---------
Net cash provided by
operating activities ( 269,129) 273,030 883,013
--------- --------- ---------
INVESTING ACTIVITIES
Proceeds from sale of
equipment - - 13,900
Purchase of property and
equipment, net of debt
incurred 1996 $1,554,961:
1995 $1,311,484; 1994 $-0- ( 379,746) ( 201,250) ( 140,481)
Principal received on notes
receivable 820,271 1,675,875 1,324,245
Notes receivable arising
from sales ( 706,246) (1,092,480) (1,961,384)
Decrease (increase) in
certificates of deposit 489,000 ( 389,000) 300,000
Sale (purchase) of U.S.
Treasury Note - 204,935 ( 204,935)
---------- --------- ---------
Net cash provided by (used
in) investing activities 223,279 198,080 ( 668,655)
---------- --------- ---------
FINANCING ACTIVITIES
Proceeds from sale of
common stock - 31,250 -
Payments on long-term debt ( 150,000) - -
Cash dividends paid ( 99,078) ( 98,718) ( 98,135)
Debt issue costs, net of debt
incurred, 1995 $73,030 - - -
Funding of reimbursement
account ( 7,190) ( 145,516) -
Earnings on unused
bond proceeds ( 47,350) ( 58,124) -
---------- --------- ---------
Net cash used in
financing activities ( 303,618) ( 271,108) ( 98,135)
---------- --------- ---------
Increase in cash and
cash equivalents ( 349,468) 200,002 116,223
CASH AND CASH EQUIVALENTS
Beginning 1,426,738 1,226,736 1,110,513
--------- --------- ---------
Ending $1,077,270 $1,426,738 $1,226,736
========= ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash payments for:
Income taxes, net of
refunds received $ 218,955 $ 214,783 $ 163,181
========= ========= =========
The Notes to Consolidated Financial Statements
are an integral part of these statements.
<PAGE> MOD-U-KRAF HOMES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
Note 1. Nature of Business and Significant Accounting Policies
Nature of Business:
------------------
The Company is engaged in the business of manufacturing and selling
sectionalized building units of its own design. The Company also
customizes a commercial line of products consisting of multi-family
and diversified specialty structures. The units are sold primarily
to home builders, land developers and realtors in Virginia,
Maryland, West Virginia and North Carolina.
In some cases, the Company provides short-term construction financing
which is generally limited to 75 to 80 percent of the estimated fair
market value of the completed property. The Company retains a
security interest in the property until the contract is paid. The
Company's wholly-owned subsidiary developed a small condominium
complex in the ski resort area of Gatlinburg, Tennessee and holds
mortgage notes for certain units sold. The mortgages were limited
to 90 percent of the fair market value of the properties at the time
of sale, however, due to market declines, the mortgage balances may
exceed 90 percent of the current fair market value of the related
property. The Company's exposure to loss on these contracts is
limited to the difference between the receivable and the value of
the collateral. The Company has not experienced any significant
loss on the subsequent sale of repossessed collateral.
Principles of Consolidation:
---------------------------
The consolidated financial statements include the accounts of the
Company's wholly-owned subsidiary, Mountain Resort Building Systems,
Inc. All significant intercompany accounts and transactions have
been eliminated.
Cash and Cash Equivalents:
-------------------------
For purposes of reporting cash flows, the Company considers most
highly liquid investments with an original maturity of three months
or less to be cash equivalents. Certificates of deposit, regardless
of maturity, are not considered cash equivalents.
The Company maintains its cash accounts in commercial banks located
in Virginia. Accounts in each bank are guaranteed by the Federal
Deposit Insurance Corporation (FDIC) up to $100,000 per bank. A
portion of the Company's cash balance is uninsured at year end.
Valuation of Trade Receivables:
------------------------------
Trade receivables are stated at face amount with no allowance for
doubtful accounts because probable uncollectible accounts are
immaterial.
Inventories:
-----------
Raw materials are stated at the lower of cost (determined on a
first-in, first-out basis) or market. Work in progress and finished
goods are stated at the lower of average cost determined on a
standard cost basis) or market. Land and units held for sale are
stated at the lower of cost (determined on a specific property
basis) or market.
Depreciation:
------------
Depreciation is provided principally on the straight-line method
over the estimated useful lives of the depreciable assets for
financial reporting purposes. Statutory methods and lives are
used for income tax purposes.
Income Taxes:
------------
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently
due plus deferred taxes related primarily to differences from
current recognition of deferred compensation for financial reporting
purposes and deferred recognition for income tax purposes. The
deferred taxes represent the future tax return consequences of those
differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled.
Recognition of Income:
---------------------
Revenue is recognized for cash-in-advance sales when production of
the unit is complete. Revenue is recognized for sales on account
when the unit is delivered.
Estimates:
---------
Management uses estimates and assumptions in preparing financial
statements. Those estimates and assumptions affect the reported
amounts of assets and liabilities, the disclosure of contingent
liabilities and the reported revenues and expenses.
Earnings Per Share:
------------------
Primary and fully diluted earnings per common share are based on the
weighted average number of shares of common stock outstanding and
common stock equivalents of dilutive stock options. The weighted
average number of actual shares outstanding was 825,649, 821,649 and
813,652 for 1996, 1995 and 1994, respectively.
Reclassification:
----------------
For comparability, the amounts presented for 1995 and 1994 have been
reclassified, where appropriate, to conform to the presentation used
for 1996.
Note 2. Inventories
The components of inventories are as follows:
1996 1995
----------- -----------
Raw materials $ 1,054,192 $ 556,194
Work-in-process 262,091 46,421
Finished goods 765,236 372,584
Land and units held
for sale 276,827 393,567
----------- -----------
$ 2,358,346 $ 1,368,766
=========== ===========
Total general and administrative costs incurred and the portion of
those costs remaining in inventory are as follows:
1996 1995 1994
-------- -------- --------
General and ad-
ministrative costs:
Incurred $ 865,408 $ 740,046 $ 715,350
======== ======== ========
Remaining in
inventory $ 49,853 $ 22,432 $ 22,251
======== ======== ========
Note 3. Notes Receivable
Notes receivable consist of the following:
1996 1995
-------- --------
Various mortgage notes receivable,
interest ranging from 8% to 10%,
payable in various monthly install-
ments and balloon payments due at
various dates through August 1999.
Secured by deeds of trust on
certain real estate. $ 169,990 $ 134,888
Credit line deed of trust notes
receivable, interest ranging from
0% to 10.5%, payable at various
dates through 1996. Secured by
deeds of trust on certain real estate. 782,329 921,314
Other Notes 14,808 19,325
Note receivable from the President, pay-
able in annual principal installments of
$5,625 plus interest at 5.03%, secured
by common stock of the Company. 22,500 28,125
--------- ---------
989,957 1,103,652
Less current portion 796,721 882,234
--------- ---------
$ 192,906 $ 221,418
========= =========
Note 4. Property and Equipment
Major classes of property and equipment are as follows:
1996 1995
--------- --------
Land and improvements $ 773,539 $ 275,590
Buildings 2,940,628 1,076,311
Manufacturing equipment 1,623,065 1,020,645
Other furniture, fixtures
and equipment 432,515 349,592
--------- ---------
5,769,747 2,722,138
Less accumulated depreciation $2,085,797 $1,802,732
--------- ---------
3,683,950 919,406
Construction in process 209,881 1,326,221
--------- ---------
$3,893,831 $2,245,627
========= =========
Maintenance and repairs expense incurred amounted to
$173,605, $134,405 and $132,178 for 1996, 1995, and
1994, respectively.
Note 5. Post-retirement Benefits
The Company is obligated under post-retirement benefits
agreements with two former officers as follows:
1996 1995
--------- ----------
Present value of deferred compen-
sation benefits payable to the widow
of O.Z. Oliver, former Treasurer and
Chairman of the Board, at $6,311 per
month until the earlier of her death
or Sept. 2006, discounted at 8.50%. $ 500,797 $ 532,477
Present value of deferred compen-
sation benefits payable to Robert K.
Fitts, former President and Chairman
of the Board, at $5,560 monthly until
his death after which the benefits
are payable to his spouse M. K. Fitts
until the earlier of her death or
July 2007, discounted at 8.50%. 500,903 523,974
Present value of estimated
post-retirement benefits other than
pensions discounted at 8.50%.
Details are presented below. 145,486 149,737
--------- ---------
1,147,186 1,206,188
Less current portion 66,490 75,366
--------- ---------
$1,080,696 $1,130,822
========= =========
The Company is obligated to pay a fixed monthly amount for health
care coverage to the above payees. The Company is also obligated
to pay up to $10,000 annually in premiums for a life insurance
policy assigned to the former President.
The Company accounts for these obligations in a manner similar to
that described in Statement of Financial Accounting Standards
No. 106, "Employer's Accounting for Post-retirement Benefits Other
than Pensions" under which such costs are recognized as incurred
rather than when paid. The statement is not required to be applied
to benefits payable to selected employees under terms of individual
contracts. However, it is management's opinion that adoption of
the standard is preferable for financial reporting purposes.
Note 6. Long-Term Debt
On July 12, 1995, the IDA of Franklin County, VA issued bonds in the
amount of $3,000,000 to finance the construction of a manufacturing
facility. The Series 1995 Variable Rate Demand Industrial Revenue
Bonds are secured by the Company's Irrevocable Letter of Credit with
Crestar Bank. The letter of credit agreement subjects the Company
to certain financial and operating covenants, all of which the
Company was in compliance with at year end. Crestar Bank holds a
first lien and security interest on the new facility. The bonds are
payable in equal annual principal amounts of $150,000 through 2015.
The interest rate was 4.1 and 4.95 percent at December 31, 1996 and
1995, respectively.
The Company has entered an agreement of sale to purchase the
facility from the IDA. The Company's obligation under the Agreement
of Sale is equal to the required principal and interest payments on
the bonds and is payable in monthly installments currently estimated
at $22,750. The monthly payments are deposited into a Reimbursement
Account with Crestar Bank and used to pay all principal, interest
and fees related to the Bonds. The Company also agreed to maintain
an additional required deposit in the reimbursement account equal to
55 days of interest at 15.0 percent on the bonds. The Reimbursement
Account balance was as follows:
1996 1995
---- ----
Required prepaid interest deposit $ 67,811 $ 67,811
Unused monthly principal deposits 75,000 75,000
Earnings 9,895 2,705
-------- --------
$152,706 $ 145,516
======== ========
The Company's policy is to reflect the balance of the reimbursement
account as an asset until the funds are used by the trustee for
payment of bond obligations, at which time the Company reduces its
obligations under the asset sale agreement.
As of December 31, 1996, $2,939,755 of the bond proceeds have been
drawn from the trustee. The Company's obligation under the asset
sale agreement is reflected at the amount of bond proceeds that have
been drawn less cumulative payments of $150,000. Any unused proceeds
will be used for early retirement of bonds.
Amounts earned on bond proceeds prior to their being drawn from the
trustee are to be applied to principal reduction in the future.
These earnings amounted to $105,474 and $58,124 at December 31, 1996
and 1995, respectively.
Debt issue costs will be amortized over the term of the debt.
Estimated aggregate maturities of principle on long-term debt
obligations are $150,000 annually through 2015.
Note 7. Income Taxes
The provision for income taxes consists of the following components:
1996 1995
--------------------------- -------------------------
Federal State Total Federal State Total
--------- -------- -------- -------- -------- -------
Current tax
expense $ 65,951 $ 24,417 $ 90,368 $194,664 $ 43,652 $238,316
Deferred tax
expense
(benefit) 16,858 5,242 22,100 (12,973) 3,342 ( 9,631)
------- -------- ------- -------- ------- --------
$ 82,809 $ 29,659 $112,468 $181,691 $ 46,994 $228,685
======== ======= ======== ======== ======== ========
1994
---------------------------
Federal State Total
--------- ------- --------
Current tax
Expense $156,446 $ 37,926 $194,372
Deferred tax
expense
(benefit) 48,598 3,810 52,408
--------- ------- --------
$205,044 $ 41,736 $246,780
========= ======== ========
Deferred tax expense (benefit) results from temporary difference in
the recognition of revenue and expense for tax and financial
reporting purposes. The sources of the differences and the tax
effect of each are as follows:
1996 1995 1994
-------- -------- ---------
Differing cost basis of
property and equipment
for tax and financial
reporting purposes $ 8,067 $(24,248) $ 34,884
Amounts expensed when
incurred, deducted when paid:
Deferred Compensation 21,959 18,285 17,970
Warranty & accrued vacation ( 4,658) ( 1,437) ( 2,114)
Contributions ( 11,020) - -
Other, net 7,752 ( 2,231) 1,668
-------- ------- --------
$ 22,100 $( 9,631) $ 52,408
======== ======= ========
Total tax provisions differ from amounts computed by applying the
statutory Federal income tax rate to income before income taxes
for the following reasons:
1996 1995 1994
--------------- --------------- --------------
Percent Percent Percent
of of of
Pretax Pretax Pretax
Amount Income Amount Income Amount Income
-------- ------ -------- ------ -------- ------
Income tax expense
at statutory
federal rate $ 98,645 34.0% $206,553 34.0% $188,695 34.0%
Increase in income
taxes from:
State income taxes,
net of federal
tax effect 11,605 4.0% 24,300 4.0% 22,199 4.0%
Other, net 2,218 1.0% ( 2,168) (0.4%) 35,886 6.5%
-------- ----- -------- ----- -------- ----
$112,468 39.0% $228,685 37.6% $246,780 44.5%
======== ===== ======== ===== ======== =====
Note 8. Fair Value of Financial Instruments
The methods used to estimate the fair value of each material class
of financial instruments are as follows:
Cash, Short-term Investments, Trade Receivables and Payables:
------------------------------------------------------------
The carrying amount is a reasonable estimate of the fair value
because of the short maturity of these instruments.
Notes Receivable:
----------------
Fair values are estimated by discounting the future cash flows using
the current rates at which similar loans would be made with similar
credit ratings and for the same remaining maturities. At December
31, 1996 and 1995, carrying values approximate fair values.
Debt:
----
The interest rate on the long-term debt is reset weekly to reflect
current market rates. Consequently, the carrying value of debt
approximates fair value.
Note 9. Stock Option Plan
The Company previously had 150,000 shares of common stock reserved
for issuance to key employees under an incentive stock option plan,
which terminated February 24, 1993. Options were granted at prices
equal to the fair market value on the dates of grant except for 10
percent stockholders for which the price was not less than 110
percent of fair market value. Options are exercisable in cumulative
installments over a 5-year period commencing at the date of grant
and expiring at the end of the fifth year. The only activity in the
plan for 1994 through 1996 was the exercise of 12,000 options at
$3.125 per share in 1995. All other options granted were previously
exercised or expired unexercised.
Note 10. Profit Sharing Plan and Trust
The Company has a contributory profit-sharing plan complying under
Section 401(k) and certain other provisions of the Internal Revenue
Code. The plan covers a majority of all employees meeting minimum
eligibility requirements. Participants may elect to have before-tax
(salary reduction) contributions to be made to the plan on their
behalf. The Company matches such before-tax contributions in the
proportion determined by the Board of Directors at its discretion on
an annual basis. Additionally, the Company may at the Board's
discretion make an additional contribution based on the Company's
pre-tax earnings. The Company's total contributions to the plan
were $40,142, $53,010, and $52,401 for 1996, 1995 and 1994,
respectively.
Note 11. Non-operating Income
Non-operating income is composed of the following:
1996 1995 1994
-------- -------- --------
Interest income $ 130,119 $ 175,971 $ 159,586
Interest expense, net of
earnings on debt proceeds ( 64,603) ( 4,867) ( 445)
Rental and other income 3,205 22,091 22,250
Other, net ( 356) ( 1,110) 11,454
-------- -------- --------
$ 68,365 $ 192,085 $ 192,845
======== ======== ========
Note 12. Commitments and Contingencies
Employment Contracts:
--------------------
The Company is obligated under employment contracts with the
President and Vice President. Combined base annual compensation
under the contracts is approximately $140,000. The contracts
provide for payment of incentive compensation based on certain
percentages of pretax income of the Company, exclusive of any
extraordinary items.
Death Benefit:
-------------
The Company is obligated to provide a death benefit to the estate of
the Vice President in the amount of $35,000. The Company has
recognized a liability in the amount of $15,480, the estimated
present value of this obligation discounted at 8.50 percent. The
Company is carrying a term life insurance policy in the amount of
$35,000, the purpose of which is to fund the death benefit.
Sales and Service Tax Audit:
---------------------------
The Company is undergoing an audit of its West Virginia sales and
service tax returns. The West Virginia Department of Revenue has
assessed the Company an additional tax of $117,999 and related
interest. The Company's attorneys have filed a Petition for
Reassessment with the State. In the opinion of the Company's legal
counsel, the Company's chances of success on the current
assessments are favorable.
Note 13. Related Party Transactions
In the normal course of business, the Company makes purchases from
a supplier owned by a director of the Company. Purchases from this
supplier totaled $662,539, $462,654 and $484,701 for 1996, 1995 and
1994, respectively.
The Company has notes receivable from various shareholders (Note 3)
and is obligated under deferred compensation agreements to two
former employees (Note 5).
Item 8. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.
-----------------------------------------------------------
None
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
-------------------------------------------------------------
The Company's Board of Directors is composed of the following six
members.
Name Age Director Since
------ ----- ----------------
Edwin J. Campbell . . . . . . . . 67 1978
Dale H. Powell . . . . . . . . . 63 1980
W. Curtis Carter . . . . . . . . 78 1991
J. Dillard Powell . . . . . . . . 63 1991
Bobbie L. Oliver . . . . . . . . . 64 1994
Mary L. Fitts . . . . . . . . . . 57 1994
EDWIN J. CAMPBELL was Vice President of Sales and Marketing of the
Company from 1977 until 1990, and has been Corporate Secretary since March,
1990. He has been Vice President since October, 1990.
DALE H. POWELL was Vice President-Operations of the Company from 1980 to
March 1990, when he became President and Chairman of the Board. Mr. Powell
was Secretary of the Company from March 1988 until March 1990. Mr Powell is
the brother of J. Dillard Powell.
W. CURTIS CARTER, presently retired, was an Officer and Director of
Stuart Lumber Corporation in Stuart, Virginia for 24 years until the company
was sold to the Masonite Corporation in 1977. He remained with Masonite in
accounting and other capacities until his retirement in 1988.
J. DILLARD POWELL has been owner and President of Rocky Mount Supply
Company since 1989. Prior thereto he served as President of Continental
Homes from 1973 to 1988 where he had worked in other capacities since 1960.
He was on the State Board of Housing from 1972 to 1986 serving 8 years as
Chairman; was a Commissioner for the Virginia Housing Development Authority
from 1976 to 1984; Chairman of the National Joint Council of States on
Building Codes and Standards from 1986 to 1988; and has been a Director of
First Virginia Bank-Franklin County since 1983. He is the brother of Dale H.
Powell.
BOBBIE L. OLIVER is the wife of the late O. Z. Oliver, Co-founder and
former Board Chairman of Mod-U-Kraf Homes, Inc. She is the largest
shareholder of the Company and is managing real estate and rental properties
in Southwest Virginia. She is the Sister-In-Law of Dale H. Powell and the
Sister of Mary L. Fitts.
MARY L. FITTS, Real Estate Investor, has been owner and operator of an
apartment complex since 1983. She is the wife of Robert K. Fitts, co-founder
of the Company. She is the Sister-In-Law of Dale H. Powell and the Sister of
Bobbie L. Oliver.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
The Company's directors, executive officers and owners of more than 10%
Company's shares are required under the Securities Exchange Act of 1934 to
file report of ownership and changes in ownership with the Securities
Exchange Commission. Copies of these reports must also be furnished to the
Company. Based solely on review of the copies of such reports furnished to
the Company through the date hereof, or written representations that no
reports were required; the Company believes that during 1996, all filing
requirements applicable to its officers, directors and 10% shareholders were
met.
Item 10. Executive Compensation.
----------------------
The following table presents information relating to total compensation
of the Chief Executive Officer of the Company during the periods indicated.
SUMMARY COMPENSATION TABLE
Annual Compensation
All
Name and (1) Other (2)
Principal Position Year Salary Bonus Compensation
Dale H. Powell 1996 $75,000 $20,322 $15,278
President and
Chairman of the 1995 $75,000 $18,542 $16,221
Board
1994 $75,000 $11,507 $15,956
(1) Bonus is calculated on the prior years' earnings in accordance with
Mr. Powell's employment agreement.
(2) Consists of $13,207 of premiums paid by the Company on a "split-dollar"
insurance policy for 1995, 1994 and 1993, and $2,071, $3,014 and $2,749
of Company contributions to Mr. Powell's profit-sharing plan account for
1996, 1995 and 1994 respectively.
Employment Agreement
Under an Employment Agreement with the Company, effective January 1,
1991, Dale H. Powell will be paid an annual base salary of $75,000, subject
to annual review by the Board of Directors. In addition to the base salary,
Mr. Powell will be paid incentive compensation equal to 3% of the income of
the Company before federal and state income taxes, and before the payment of
any dividends or extraordinary non-recurring items or expenses.
Compensation of Directors
Outside directors are paid a fee of $250.00 for each meeting of the Board
of Directors attended.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
The Company's only authorized equity is common stock, $1 par value
("Common Stock"), each share of which has one vote on all matters. There
were outstanding and entitled to vote 825,649 shares of Common Stock on the
Record Date.
The following table presents certain information as of the Record Date
regarding beneficial ownership of Common Stock by the directors and nominees
for directors, officers and directors as a group, and all owners of more than
5% of the Common Stock.
Amount and Nature
Name of Beneficial of Beneficial Percent
Owner Ownership Owned
------------------ --------------------- -------
Edwin J. Campbell 42,092(1) 5.10%
Dale H. Powell 68,800 8.33
W. Curtis Carter 36,720 4.45
J. Dillard Powell 3,793 .46
Bobbie L. Oliver 173,406 21.00
Mary L. Fitts 66,000(2) 7.99
All officers and directors
as a group(8 persons) 391,111 47.37
Robert K. Fitts 78,547(3) 9.51
P. O. Box 82 Boones Mill, VA 24065
(1) Includes shares held in various fiduciary capacities and owned by
or with certain relatives.
(2) Includes 66,000 shares with respect to which voting and investment
power is shared with Robert K. Fitts
(3) Includes 12,547 shares with respect to which Mr. Fitts has sole
voting and investment power and 66,000 shares with respect to which
such power is shared with Mary L. Fitts.
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
Pursuant to a settlement agreement between the Company and the Estate of
O. Z. Oliver, deferred compensation benefits of $75,726 were paid to Mr.
Oliver's widow, Bobbie L. Oliver, during 1996. In addition, $3,010 was paid
in 1996 to Mrs. Oliver for health insurance premiums. Mrs. Oliver, a
director, is a Sister In Law to Dale H. Powell, President and Chairman of the
Board of the Company and a Sister to Mary L. Fitts.
Pursuant to a settlement agreement between the Company and Robert K.
Fitts, deferred compensation benefits of $66,724 and a sum of $10,000 in
premiums for life insurance policies assigned to Mr. Fitts were paid to Mr.
Fitts in 1996. In addition, $6,150 was be paid in 1996 to Mr. Fitts for
health insurance premiums for Mr. Fitts and Mary L. Fitts, his spouse. Mr.
Fitts' spouse, Mary L. Fitts, a director, is a Sister of Bobbie L. Oliver and
a Sister-In-Law to Dale H. Powell, President and Chairman of the Board of the
Company.
In the normal course of business, the Company makes purchases from a
supplier owned by a director of the Company, J. Dillard Powell. The supplier
was acquired by Mr. Powell in 1989. Prior to that time, the supplier had
been a long time vendor of the Company. Purchases from this supplier totaled
$662,539 for 1996.
Item 13. Exhibits, Lists And Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(3) Exhibits:
3.1(a) Articles of Incorporation (filed as an exhibit to Registrant's
Form 10-K for the fiscal year ended December 31, 1983 and
incorporated herein by reference)
3.1(b) Amendment to Articles of Incorporation dated November 2, 1989
(filed as an exhibit to Registrant's Form 10-K for the fiscal
year ended December 31, 1989 and incorporated herein by
reference)
3.2(a) By-Laws (filed as an exhibit to the Registrant's Form 10-K for
the fiscal year ended December 31, 1990 and incorporated
herein by reference)
3.2(b) Amendment to By-Laws dated January 19, 1994 (filed as an
exhibit to the Registrant's Form 10-KSB for the fiscal year
ended December 31, 1993 and incorporated herein by reference)
3.2(c) Amendment to By-Laws dated February 8, 1995
10.1 1983 Mod-U-Kraf Homes, Inc. Incentive Stock Option Plan (filed
as an exhibit to Registrant's Form 10-K for the fiscal year
ended December 31, 1983 and incorporated herein by reference)
10.3(a) Settlement Agreement, dated as of March 24, 1990, between
Registrant and Robert K. Fitts (filed as an exhibit to
Registrant's Form 10-K for the fiscal year ended Dec. 31, 1989
and incorporated herein by reference)
10.3(b) Settlement Agreement, dated as of September 13, 1990, between
Registrant and the Estate of O.Z. Oliver (filed as an exhibit
to Registrant's Form 8-K filed Sept. 15, 1990 and incorporated
herein by reference)
10.4(a) Employment Agreement, dated November 21, 1990, between
Registrant and Dale H. Powell (filed as an exhibit to
Registrant's Form 10-K for the fiscal year ended Dec.31, 1990
and incorporated herein by reference)
10.4(b) Employment Agreement, dated November 21, 1990, between
Registrant and Edwin J. Campbell (filed as an exhibit to
Registrant's Form 10-K for the fiscal year ended Dec. 31, 1990
and incorporated herein by reference)
21 Subsidiaries
(b) Reports on Form 8-K - None.
<PAGE> SIGNATURES
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.
MOD-U-KRAF HOMES, INC.
(Registrant)
March 26, 1997 By s/Dale H. Powell
-------------------------
Dale H. Powell, President and
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
March 26, 1997 s/Dale H. Powell
-------------------------
Dale H. Powell, President and
Chairman of the Board (Principal
Executive officer)
March 26, 1997 s/Edwin J. Campbell
-------------------------
Edwin J. Campbell, Vice President,
Corporate Secretary and Director
March 26, 1997 s/Jeffrey L. Boudreaux
-------------------------
Jeffrey L. Boudreaux, Controller
(Principal Financial and Accounting
Officer)
March 26, 1997 s/W. Curtis Carter
-------------------------
W. Curtis Carter, Director
March 26, 1997 s/J. Dillard Powell
-------------------------
J. Dillard Powell, Director
March 26, 1997 s/Bobbie L. Oliver
-------------------------
Bobbie L. Oliver, Director
March 26, 1997 s/Mary L. Fitts
-------------------------
Mary L. Fitts, Director
Exhibit 21
Mod-U-Kraf Homes, Inc.
Subsidiaries
Name of Subsidiary Jurisdiction of
Incorporation
- -------------------------------------- -----------------------
Mountain Resort Building Systems, Inc. Virginia
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