[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] MAR-31-1998
[CASH] 16,808
[SECURITIES] 0
[RECEIVABLES] 642,274
[ALLOWANCES] 0
[INVENTORY] 192,366
[CURRENT-ASSETS] 870,205
[PP&E] 307,051
[DEPRECIATION] 15,028
[TOTAL-ASSETS] 1,347,898
[CURRENT-LIABILITIES] 1,090,409
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 3,664,383
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 1,347,898
[SALES] 897,059
[TOTAL-REVENUES] 897,245
[CGS] 587,233
[TOTAL-COSTS] 587,233
[OTHER-EXPENSES] 229,634
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] (50,430)
[INCOME-PRETAX] 29,948
[INCOME-TAX] 29,948
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 29,948
[EPS-PRIMARY] 0.01
[EPS-DILUTED] 0.01
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities exchange Act of 1934
For Quarter Ending March 31, 1998
Commission File Number #33-38119-C
THE KENSINGTON COMPANY, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-1610632
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
Suite 654 Interchange Tower, 600 S. Hy. 169,
Minneapolis,
Minnesota 55426
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (612) 546-2075
Indicate by Check mark whether the registration (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 of such shorter period that the
registrant was required to file such reports), and 92) has been subject to
such filing requirements for the past 90 days.
Yes * No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Weighted Number of Shares are 3,138,340 of common
stock no par value.
PAGE 1
Part I. Financial Information
Quarter Ended March 31, 1998
GENERAL
The following financial information is submitted in response to the
requirements of Form 10-QSB and does not purport to be financial statements
prepared in accordance with generally accepted accounting principles. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted, although the Company believes the disclosures that are
made are adequate to make the information presented not misleading. Further,
in the opinion of the management, the interim financial statements reflect
fairly the financial position and results of operations for the period
indicated.
The results of operations for the quarter ended as stated above are not
necessarily indicative of results to be expected for the entire fiscal year
ending December 31st.
Item 1. Financial Statements
The balance sheet of The Kensington Company, Inc. (the "Company") as of
the Quarter stated above, and the related statement of income and changes in
financial position and note thereto are incorporated herein by reference to
the Company's quarterly report.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
For the quarter, revenues were up 4% over the same period last year to $897k.
Operating profits for the period were $310k, a 6% increase over the same
period in 1997. Sales for the fixure manufacturing subsidiary continue to be
strong as well as the backlog of orders. Net income for the quarter totaled
$30k, as compared to $10k for the first quarter of 1997. Interest expense for
the period fell to $50k due the the reduction in interest rates on debt as
well as lower overall amounts of debt.
Liquidity and Capital Resources
For the quarter, the Company had a net income from operations of $80k.
With the current demand for the company's products management is of the
opinion that the Company will continue to show an operating profit through the
foreseeable future. During the first quarter the company was able to extend or
pay off the portion
PAGE 2
of debentures which came due during the quarter, however a serious cash flow
problem still exists with approximately $60 of debentures due the second
quarter. Management is currently negotiating with the debtors to extend the
debt.
During the period stated the Registrant did not sell to directors,
management and others, any common stock.
Inflation
The rate of inflation has had a great impact on the Company's results of
operations and is expected to have a continued impact on continuing operations
due to the increase in wood product costs and the fact that we have to bid
most of our projects and we can not pass all of the cost increases to our
customers.
Part II. Other Information
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K and the October 18, 1995
S-8 filing as described in Item 2 herein.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE KENSINGTON COMPANY, INC.
Mark Haggerty
Mark Haggerty
Chief Executive Officer
Jeff Etten
Jeff Etten, C.F.O.
Dated: May 15, 1998
Minneapolis, Minnesota
PAGE 3
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEET
MARCH 31, 1997 AND 1998
(UNAUDITED)
ASSETS
1997 1998
Current assets:
Cash $23,643 $16,808
Accounts receivable 309,274 642,274
Inventories 159,841 192,366
Other current assets 33,052 18,757
Total current assets 525,810 870,205
Other assets:
Investment in oil and gas properties, net 87,854 81,451
Investment in oil and gas partnerships 44,832 29,641
Investment in Ives 0
Investment in KEC partnerships 0
Property and equipment, net 312,752 307,051
Loan Fees, Net 38,385
Notes receivable - related parties 26,511 21,165
Total other assets 471,949 477,693
$997,759 $1,347,898
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Line of Credit $112,541 $177,000
Note payable - related parties 278,556 238,217
Current portion of long-term debt 510,527 56,392
Current portion of obligations
under capital leases 23,340 22,835
Accounts payable 308,257 327,085
Accrued payroll & related taxes 100,185 147,238
Accrued interest 32,747 29,397
Accrued Expenses 77,946 92,245
Intercompany 0 0
Total current liabilities 1,444,099 1,090,409
Long-term debt, net of current portion 130,110 722,933
Obligations under capital leases,
net of current portion 10,000 22,526
Minority interest in consolidated
Subsidiaries 11,239 0
Total liabilities 1,595,448 1,835,868
STOCKHOLDERS' EQUITY
Common stock 3,661,273 3,664,383
Additional paid-in capital 0 0
Accumulated deficit (3,968,341) (3,907,801)
Stock subscriptions receivable (290,621) (244,552)
Total stockholders' equity (597,689) (487,970)
$997,759 $1,347,898
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1997 AND 1998
(UNAUDITED)
1997 1998
Revenues:
Product sales $863,257 $897,059
Oil and gas sales 0 186
Total revenues 863,257 897,245
Cost of sales:
Cost of products sold 570,925 587,233
Oil and gas costs 0 0
Total cost of sales 570,925 587,233
Gross profit 292,332 310,012
Operating expenses 228,519 229,634
Income (loss) from operations 63,813 80,378
Other income (expense):
Interest expense (54,019) (50,430)
Miscellaneous income 0 0
Total other income (expense) (54,019) (50,430)
Income (loss) before income taxes
and extraordinary item 9,794 29,948
Provision for income taxes (benefit) 0 0
Income before extraordinary item 9,794 29,948
Extinguishment of debt, net of income
taxes of $0 0 0
Net income (loss) 9,794 29,948
Accumulated deficit, beginning (3,978,135) (3,937,749)
Accumulated deficit, ending ($3,968,341) ($3,907,801)
Earnings Per Share $0.00 $0.01
WEIGHTED NUMBER OF SHARES OUTSTANDING 3,021,450 3,138,340
THE KENSINGTON COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE QUARTER ENDED MARCH 31, 1997 & 1998
(UNAUDITED)
1997 1998
Cash flows from operating
activities:
Net income (loss) $9,794 $29,948
Adjustments to reconcile net income
(loss) to cash flows from operating
activities:
Depreciation, depletion and amortization 13,792 15,028
Extinguishment of debt0
Changes in operating assets and liabilities:
Accounts receivable (86,889) (167,494)
Inventories 33,385 (2,440)
Other current assets (26,514) 25,877
Other assets 0 0
Accounts payable 1,256 16,103
Other current liabilities 103,448 79,573
Cash flows from operating activities 48,272 (3,405)
Cash flows from investing
activities:
Decrease in notes receivable - related
parties 0 0
Purchase of property and equipment 5,304 3,646
Sale of Stock 0
Cash flows from investing activities 5,304 3,646
Cash flows from financing
activities:
Increase (decrease) in Line of Credit 0 28,901
Increase (decrease) in notes payable -
related parties (4,126) 0
Proceeds short, long-term debt 0 0
Payments on long-term debt (9,708) 15,227
Payments on obligations under capital
leases (21,677) 0
Cash flows from financing activities ($35,511) $13,674
Increase (decrease) in cash $7,457 $6,623
Cash, beginning 16,186 10,185
Cash, ending $23,643 $16,808
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