Back to GetFilings.com
1
United States Securities and Exchange Commission
Washington, D.C. 20549
----------------------------------------------------
Form 10-K
(Mark One)
[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]
For the fiscal year ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1943 [No Fee Required]
For the transition period from to
Commission file number 0-23898
----------------------------------------------------
MITY-LITE, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0448892
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1301 West 400 North
Orem, Utah 84057
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (801) 224-0589
----------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of class
Common Stock, par value $.01
----------------------------------------------------
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 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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein and will not 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-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the registrant's voting Common Stock held
by non-affiliates of the registrant was approximately $71,957,000 (computed
using the closing price of $14.25 per share of Common Stock on June 6, 2000 as
reported by Nasdaq). Shares of Common Stock held by each officer and director
(and their affiliates) and each person who owns 5 percent or more of the
outstanding Common Stock have been excluded in that such persons may be deemed
affiliates for purposes of this calculation. The determination of affiliate
status is not necessarily a conclusive determination for other purposes.
There were 5,049,632 shares of the registrant's Common Stock, par value
$.01 per share, outstanding on June 6, 2000.
Portions of the registrant's definitive Proxy Statement for the Annual
Meeting of Shareholders scheduled to be held on August 17, 2000, which Proxy
Statement will be filed no later than 120 days after the close of the
registrant's fiscal year ended March 31, 2000, are incorporated by reference
in Part III of this Annual Report on Form 10-K. Portions of the Registrant's
Annual Report to Shareholders filed as Exhibit 13 to this filing are
incorporated by reference in Part II of this Annual Report on Form 10-K.
2
PART I
ITEM 1. BUSINESS
BACKGROUND
Mity-Lite, Inc. ("Mity-Lite" or the "Company") designs, manufactures and
markets innovative Institutional furniture created to meet the efficiency
needs of its customers. The Company focuses on providing premium quality
furniture products to niche markets. The Company's product lines include
multipurpose room furniture, specialty office seating and systems and health
care seating. Mity-Lite sells its line of multipurpose room furniture both
domestically and internationally in educational, recreational, hotel and
hospitality, government, office, health care, church and other public assembly
markets. The Company sells its specialty office seating and systems products
domestically and internationally in the call center, high-density office use,
corporate and dispatch markets. Mity-Lite sells its health care seating
mainly in Canada and the U.S. in the long term health care market.
INSTITUTIONAL FURNITURE PRODUCTS
MULTIPURPOSE ROOM FURNITURE. The Company's multipurpose room furniture
is marketed under the Mity-Lite trade name and consists of lightweight,
durable, folding leg tables, stacking chairs and other related products used
in multipurpose rooms. The Company has developed and currently manufactures
and markets 50 different plastic table sizes which come in three standard and
a variety of custom colors. These tables are made with several different
folding leg and custom color options. The Company has successfully applied
engineering grade plastics and sophisticated manufacturing and assembly
methods to the production of tables that weigh less and are more durable than
competing particle board or plywood table products of similar size. The
Company's plastic tables are manufactured using abrasion, stain and water
resistant materials. The Company's cornered tables are constructed using the
Company's proprietary high-impact corners which can withstand a two foot drop
without sustaining debilitating damage. All of the Company's plastic tables
include reinforced edging. Cornered tables are equipped with non-skid pads
which facilitate stacking and storage. Management believes the Company's
plastic table products appeal to its customers because they are durable,
lightweight, easy to handle and attractive.
The Company also manufacturers and sells Elite(TM) tables. The Elite(TM)
table is a distinctive, lightweight, folding leg wood conference style table.
The table is constructed of real wood veneers or high pressure laminates, PVC
or solid wood edges and a composite honeycomb core. The Elite(TM) line
provides easily removable elegant tables for offices, conference and training
rooms.
In addition to its table products, the Company currently offers three
lines of stacking chairs: the MityTuff(R), the MityStack(TM), and the
MityHost(TM). The MityHost(TM) chair line is manufactured in-house while the
Company's other chair lines are purchased from suppliers and marketed under
the Mity-Lite name. In November 1999, the Company introduced a new line of
folding chairs under the trade name of SwiftSet(TM). This chair is
manufactured in-house and has a plastic seat and back designed to be more
comfortable, durable and lightweight than other folding chairs. In addition
to lightweight, durable tables and chairs, the Company manufactures and
markets accessory products including table and chair carts, tablecloths,
skirting and skirt clips.
3
SPECIALTY OFFICE SEATING AND OFFICE SYSTEMS. On April 9, 1999, the
Company, through its wholly-owned subsidiary, C Core, Inc. acquired certain
assets and obligations of The CenterCore Group, Inc. ("CenterCore"), a
privately-owned designer, manufacturer and marketer of pod style and panel
systems furniture marketed to call centers and other high-density office use
environments.
The Company's office products include a line of cluster furniture,
designed to improve productivity and save space in offices and call center
environments. CenterCore was the originator of the "cluster concept" office
furniture designed for high-density Institutional environments, call centers,
as well as the federal government. Within the C Core product line are two
product families. The circular Spacemaker2000(TM) system pioneered by
CenterCore provides a simple, cost-conscious solution to meet the needs of
call center operations. The Tec2000(TM) system provides an array of different
applications for support staff, supervisors and managers, receptionists and
team conferences. It is available in a wide variety of shapes and sizes.
Tec2000(TM) combines privacy panels, free-standing modules and storage
options. Tec2000(TM) can also integrate with Spacemaker2000(TM) furniture for
high-density work environments.
Also included in specialty office seating and office systems is Mity-
Lite's wholly-owned subsidiary, DO Group, Inc. ("DO Group"), headquartered in
Elkhart, Indiana. Mity-Lite acquired its initial equity interest in DO Group,
Inc. in March 1997 and acquired the remainder of DO Group on April 1, 2000.
DO Group markets its products under the Domore(TM), DO3(TM) Systems, Domore
Dispatch Seating(TM), JG Auditorium Seating(TM), Corel Corporate Seating(TM)
and DesignSeating(TM) trade names. DO Group operates manufacturing facilities
in Elkhart, Indiana and Marked Tree, Arkansas.
The DO Group's products consist of dispatch seating, big and tall
seating, auditorium seating, open plan systems panel furniture, computer free
standing furniture, task seating, ergonomic seating, custom fit seating,
secretarial seating, panel clusters, stacking chairs and other related
products.
DO Group's systems products include office panels, movable full height
walls, work surfaces, pedestals, storage units, tables and other accessory
items used in office cubicles. DO Group offers two styles of panel systems.
The DO3(TM) post to panel system facilitates ease of assembly and takedown.
Panels are available in a variety of fabric, laminate or painted surfaces.
Domore(TM) Series System Seven(TM) panels are a value oriented panel to panel
system and connect using interlocking hinges. These panels are available in a
variety of fabric and laminate surfaces. Both the DO3(TM) and Domore(TM)
panel systems offer the latest electrical and voice/data transmission
capabilities, including access to CAT5 wiring at the beltline level.
DO Group's seating products are marketed under the Domore(TM), JG(TM),
Corel(TM), Stature Seating(TM) and DesignSeating(TM) trade names and consist
of ergonomic office task, executive, intensive use, fixed, auditorium and
custom seating lines. Management believes that Domore(TM) is a market leader
in intensive use seating, i.e. seating that is used three shifts per day,
seven days per week. Domore(TM) seating includes a unique proprietary
control, spring cushion seat and lumbar support as well as many other
ergonomic features. Domore(TM) offers a full line of electrostatic discharge
intensive use seating for the electronic dispatch environments.
4
Domore(TM) offers a complete line of big and tall seating for office and
24 hour use. DO Group believes that it provides the only office seating
tested to 800 pounds capacity in today's market. Through its JG Auditorium
Seating line, DO Group offers a range of four lines of auditorium and
classroom seating. The seating is ideal for theater, auditorium, court room
and classroom applications. The JG name is known for its high quality,
premium priced seating. Through its Corel product line, DO Group offers a
wide range of value priced ergonomic task, intensive use, stacking and side
chairs. Corel products are designed for industrial environments.
On April 6, 2000, Mity-Lite merged DO Group and C Core (CenterCore). The
new subsidiary is called DO Group Inc. and has been organized into two
divisions dispatch seating and systems.
HEALTH CARE SEATING. Through its wholly-owned subsidiary, Broda
Enterprises, Inc., the Company designs, manufactures and markets health care
seating and accessories used in long term health care facilities located
primarily in the United States and Canada. Broda has developed and
manufactures ten different health care chair lines. Most chair models come in
two standard sizes and six standard colors. The Company also custom
manufactures other sizes and colors of its standard health care seating
products.
Broda's high end seating products offer a combination of features which
differentiate them from the competition. Broda chairs have been tested for
interface pressures and stability which, combined with their rigid and durable
design, make Broda chairs suitable seating for long term care residents
including those with Huntington's Chorea Disease, Alzheimer's or Acquired
Brain Injury. In addition, nursing home residents susceptible to skin
breakdown, suffering from loss of upper body strength, or with other
conditions which might otherwise restrict them to bed or place them at risk of
self injury or falls, can be safely and comfortably seated in a Broda chair.
MARKET OVERVIEW
Based upon management's analysis of companies known to sell multipurpose
room furniture and based upon management's experience and contacts in its
industry, management estimates that the domestic market for multipurpose room
furniture exceeds $1.5 billion annually. It is estimated that folding tables
alone make up over $400 million of this domestic market. Chairs and other
related seating products are estimated to account for approximately $1 billion
of the estimated domestic multipurpose room furniture market. Other products
such as staging, risers, partitions, podiums, and flooring account for the
balance of the estimated domestic market.
In the office seating and systems market, the Company has positioned
itself as a niche supplier of specialty office seating and office system
products. Based upon independent research from professional organizations
like the Business and Institutional Furniture Manufacturers Association,
management believes the office system market is approaching $4.5 billion.
Management believes that office seating is a $3.3 billion market.
5
In the health care seating market, management estimates that in the
United States and Canada there are over 28,000 nursing homes with over 1.8
million beds. Nursing homes and individuals residing in nursing homes
represent the typical Broda customer. In addition, Broda's market can include
chronic care, psychiatric care or long term care facilities. Management
estimates that the total North American market for its current products is $60
million.
SALES AND MARKETING
MULTIPURPOSE ROOM FURNITURE. The Company primarily markets its
multipurpose room products directly to end users in the educational,
recreational, hotel and hospitality, governmental, office products, health
care, public assembly and church markets. This strategy enables the Company
to manage selling costs more effectively and maintain direct contact with its
customers. The Company currently employs 40 full-time in-house sales and
customer service employees. The Company's sales and customer service
personnel are compensated on a commission basis and may qualify for other
incentive bonuses based on individual, sales team and Company performance.
Each sales and customer service employee receives training in product
attributes, customer service, use of the Company's computerized sales
management system and in all aspects of the sales cycle.
The Company typically markets its products by first identifying customers
through internal market research, referrals, trade shows, customer networking
and test marketing. Once a market has been identified, the Company's sales
and marketing staff will attempt to generate leads for prospective purchasers
in such markets by attending trade shows, through mass mailings and other lead
oriented advertising. The Company uses a proprietary, computer based sales
management system to qualify, track and manage sales leads for prospective and
existing customers and to compile customer feedback. While each sales and
customer service employee maintains some in-person contact with such
employee's assigned customers, most of the Company's sales efforts are pursued
using the telephone, fax machine, e-mail, internet, videotapes and overnight
mail services. The Company also uses a reference list of customers in each
geographical sales territory in order to promote sales of its products. The
Company has a sampling program and provides prospective purchasers with
product samples for 30-day trial periods. The Company does not extensively
advertise its products in trade publications.
The Company's plastic table products are sold with a twelve-year pro-rata
warranty covering materials and workmanship. The MityTuff(R) is sold with a
seven-year warranty covering materials and workmanship. The MityStack(TM) and
SwiftSet(TM) are sold with a ten-year warranty covering materials and
workmanship. The MityHost(TM) is sold with a ten-year warranty covering the
structural integrity of the metal frame and a one-year warranty covering the
upholstery.
6
SPECIALTY OFFICE SEATING AND OFFICE SYSTEMS. The Company's specialty
office seating and office systems, are marketed directly through an in-house
sales force consisting of in-house sales representatives, field sales
representatives and telesales personnel, and indirectly through GSA dealers,
independent office product dealers, independent representatives, catalogue
distributors and specialty dealers. The Company also sells products directly
and indirectly to state governments and to the United States government
through the General Services Administration. Sales to state and federal
government agencies are on fixed terms and are not subject to price
renegotiation. The Company promotes its specialty office seating and office
systems products through print advertising, trade shows, mass mailings,
internet sites and telephone solicitations targeted to specific niche markets.
C Core's products carry a five year warranty covering materials and
workmanship.
The Company's specialty office seating and office systems sales
organization, including the Company's DO Group subsidiary, consists of 15 in-
house sales and field sales representatives, 19 telesales personnel, and over
100 independent representatives and dealers. In house sales personnel are
compensated by a combination of salary and incentive bonus. Limited
quantities of select finished goods inventories are maintained at the
Company's principal manufacturing plants. DO Group markets its products
through independent representatives and dealers, and to targeted, select
national accounts. DO Group also sells its intensive use seating through an
in-house staff of trained sales and customer service personnel to selected
markets. DO Group's sales are concentrated among a few key customers. Two
customers represented 49 percent of DO Group's sales in fiscal 2000.
HEALTH CARE SEATING. The Company markets its health care seating
products to end users and care givers in health care markets through its own
sales representatives and independent manufacturer's representatives,
distributors and retailers of durable medical equipment. The Company
currently employs ten full-time sales and customer service employees and 27
independent manufacturing representatives and distributors. The Company's
internal sales and customer service employees are compensated with a base
salary and may qualify for commission, incentive or bonus pay. The Company
promotes its products through print advertising, trade shows, mass mailings
and telephone solicitations targeted to health care professionals. The
Company has a sampling program and provides prospective purchasers with
product samples for 14-day trial periods. All of Broda's chairs carry a
limited three year warranty on the steel frame and a limited one year warranty
on the other components for defects and failure in normal use.
INTERNATIONAL SALES
Since its inception in 1987, the Company has focused its marketing
efforts primarily on domestic markets. The Company has, however, sold its
table products in Canada, South America, Europe, Asia, Middle East and
Australia. For the fiscal years ended March 31, 1998, 1999, and 2000, the
Company's international sales accounted for 7.8 percent, 11.0 percent and 11.3
percent of the Company's total net sales, respectively. The Company has been
successful in establishing distributor relationships in Canada, Mexico,
Brazil, Venezuela, Peru, Argentina, Colombia, Dominican Republic, England,
France, Jordan, United Arab Emirates, Hong Kong, China, Korea, Taiwan,
Singapore and Malaysia. Over 50 percent of health care seating sales are in
Canada with all but three percent of the remaining amount being United States
sales.
7
MANUFACTURING AND MATERIALS
MULTIPURPOSE ROOM FURNITURE. The Company's manufacturing process for its
plastic table products consists principally of bonding a thermoformed ABS
plastic shell to a wood core frame. Metal legs, which are manufactured and
painted in-house, and edge trim are then attached to the table to complete the
process. Since its inception, the Company has implemented a number of changes
to its manufacturing process and product design which have resulted in
increased production volumes, improved production quality and increased on-
time shipping performance. The Company has designed and manufactured certain
proprietary equipment used in its manufacturing process. The Company believes
that its manufacturing innovations give it a competitive advantage, allowing
the Company to reduce production costs and increase productivity. The
Company's typical order to delivery lead time is between three and five weeks.
The Company's manufacturing process for its multipurpose chair products
consists principally of the manufacturing and painting of legs and frames,
upholstering seat and back cushions and final assembly of the components. The
MityTuff(R) and MityStack(TM) chairs are distributed by the Company under
original equipment manufacturer (OEM) arrangements with the chair
manufacturers. The MityHost(TM) stacking chair and SwiftSet(TM) folding chair
are manufactured in-house at the Company's facility in Orem, Utah.
SPECIALTY OFFICE SEATING AND OFFICE SYSTEMS. The Company's manufacturing
process for office systems products consists primarily of painting and
assembling panels, storage bins, and pedestals and manufacturing laminated
work surfaces and center cores. The primary raw materials consist of formed
metal, particle board, laminate and fabric. The manufacturing process is
driven by an in house CAD drawing system that indicates the components
required.
The Company's manufacturing process for office seating products consists
primarily of assembling component parts and upholstery. The primary raw
materials consist of formed metal, particle board, castors, controls, gas
springs, foam and fabric. The Company uses a proprietary intensive use
seating control that gives the Company a competitive advantage.
HEALTH CARE SEATING. The Company's manufacturing process for its health
care seating products includes such metal fabricating processes as welding,
bending, punching, drilling and polishing. The Company also performs cut and
sew operations to produce its chair cushions and accessories. Metal
components are typically chrome plated, zinc plated or painted for corrosion
protection by outside suppliers. Components purchased for assembly into
chairs such as casters, gas springs, cables and plastic parts are generally
made to the Company's custom specifications.
8
Raw materials used in all of the Company's products such as plastic,
wood, metal and fabric are generally available from a number of suppliers.
The plastic used in the Company's multipurpose room products and tubing used
in the metal legs are manufactured according to the Company's specifications.
The multipurpose room operations operate without a substantial raw materials
inventory by depending on certain key suppliers to provide raw materials on a
"just-in-time" basis. Component parts are provided by a number of suppliers
to the Company's specifications. The Company's specialty seating operations
utilize a proprietary seating control. The Company's other raw materials such
as wood, formed metal, laminate, fabric and certain welding compounds are
commodity items. The Company believes that most of its raw materials are
available from alternative suppliers. However, any significant interruption
in delivery of such items could have a material adverse effect on the
Company's operations.
COMPETITION
The markets in which the Company participates are highly competitive.
The Institutional furniture industry consists of a fragmented group of large
manufacturers and a host of smaller manufacturers. The health care chair
industry includes a fragmented group of major medical device manufacturers and
many small manufacturers.
MULTIPURPOSE ROOM FURNITURE. Management believes that customers purchase
the Company's plastic tables primarily because of product performance,
reputation, on-time delivery, warranty service and perceived value. The
Company markets its table products based primarily on product performance
(lightweight and durable) and reputation, not price. The Company's average
table price is generally higher than the average price of competing particle
board, plywood or metal table products of its competitors. The Company
believes that it has a respected reputation for product quality, convenience
and customer service and that for these reasons, end users often choose its
table products over competitors' lower cost table products. Because only
certain elements of the Company's table design are patented, the Company's
tables may be reverse engineered and duplicated by competitors who are able to
develop the manufacturing equipment and processes to do so. Introduction of
similar products by low cost producers would put price and profit margin
pressure on the Company which would have a material adverse effect on the
Company's results of operations. Among the Company's primary competitors in
the table market are Palmer-Snyder, Inc., McCourt Manufacturing, Inc., Midwest
Folding Products, Krueger International, Falcon Products, Inc., SICO and Virco
Manufacturing Corporation which market a thermoformed plastic table; Southern
Aluminum, Inc., which produces an aluminum table; Krueger International, Inc.,
U.S. Industries (Samsonite), Bevis Custom Furniture, Inc., Globe Business
Furniture and Virco Manufacturing Corporation, Inc. which produce particle
board tables; and Falcon Products, Inc., Midwest Folding Products, and Palmer-
Snyder, Inc., which produce plywood tables.
9
Management believes that customers purchase the Company's multipurpose
room chair products primarily because of product performance, reputation,
warranty service and convenience. The market for Institutional chairs is
highly competitive and very fragmented. The Company believes that its new
folding chair line has technological and performance advantages over its
competitors. Although the Company's other chair lines do not offer the same
advances as the Company's table and folding chair products, the Company
believes they do have distinct selling features. Among the Company's primary
competitors in the multipurpose chair market are Steelcase, Falcon Products,
Inc., Virco Manufacturing Corporation, Artco-Bell Corporation, Globe Business
Furniture, Shelby Williams Industries, Inc., Krueger International, Inc., U.S.
Industries (Samsonite), Clarin, a division of Greenwich Industries, and Meco
Corporation.
SPECIALTY OFFICE SEATING AND OFFICE SYSTEMS. The specialty office
seating and office systems furniture market is part of the much larger office
furniture market. There are a number of major manufacturers and a host of
smaller manufacturers in this market place. The Company generally markets its
specialty office systems products on the basis of product performance (more
employees in comparable space than competitors, more easily reconfigurable),
options and reputation, not price. Among the Company's primary competitors in
this market are Tecknion, Interior Concepts, Hamilton Sorter, Steelcase,
Haworth, Herman Miller, Knoll, Kimball, Neutral Postures, HON, and US Prison
Industries.
HEALTH CARE SEATING. Management believes that customers will purchase
the Company's health care seating products primarily because of product
performance, reputation and service, not price. The Company's average health
care chair price is generally higher than the average price of competing
chairs. The Company's chairs generally offer significantly more performance
in terms of function and durability and for these reasons are chosen over
lower cost competitors' products. Among the Company's primary competitors in
the health care seating market are Invacare Corp., L.P.A. Medical Inc.,
Graham-Field Inc., Maple Leaf Wheelchair Manufacturing Inc., Sunrise Medical
Inc., Hillenbrand Industries Inc., Winco Inc. and Homecrest Industries
Incorporated.
INTELLECTUAL PROPERTY
The Company has been granted two utility patents relating to the
construction of its table tops. A design patent has been granted and six
utility patents are pending on the SwiftSet(TM) chair. Utility patents
relating to the function of its newest most functional health care chair model
and flipdown footrest have also been granted in the United States and Canada.
Utility patents on the Company's new mobility oriented health care chair are
pending, although a design patent in Canada has been granted. A design patent
for this chair is still pending in the United States. A design patent has
been granted for the flipdown footrest in both the U.S. and Canada. The
Company has also acquired the rights to a patent on Airflow 2000, a
temperature blending and breathing zone filtration system which helps facility
managers address indoor environmental concerns resulting in increased employee
performance levels. The Company has chosen not to apply for international
patent protection for the two table concepts. The Company does not believe
this will have a material adverse effect on the Company. The Company believes
that aspects of its manufacturing processes are trade secrets of the Company.
The Company relies on trade secret law and nondisclosure agreements to protect
10
its trade secrets. The Company does have international patents on the two
health care chairs pending for Canada, Japan, Germany, United Kingdom, and
France. The Company has been granted a design patent on its geriatric
accessory tray for Canada and the United States. A design patent has been
granted for a health care chair back and is pending for Canada. The stylized
word BRODA(TM) has been trademarked for Canada and the United States and
trademark registration has been applied for in Europe. Broda's Comfort
Tension Seating(TM) has been trademarked in Canada and the U.S. The Pedal
Chair(TM) trademark has been applied for in the U.S. and Canada. The Company
believes that its patents and trade secrets provide competitive advantages.
The Company claims common law trademark rights in the trademarks Elite(TM),
MityStack(TM), MityHost(TM), SwiftSet(TM), Xpeditor(TM), Xtreme Edge(TM) and
MitySnap(TM). The Company has a registered trademark on MityTuff(R) and the
name Mity-Lite(R). Except for the SwiftSet(TM), the Company does not own
patent rights on any of its multipurpose room chair products.
REGULATION AND ENVIRONMENTAL COMPLIANCE
The Company is subject to various local, state, provincial and federal
laws and regulations including, without limitation, regulations promulgated by
federal, state and provincial environmental and health agencies, the Federal
Occupational Safety and Health Administration, the Food and Drug
Administration, North American Free Trade Agreement, and laws pertaining to
the hiring, treatment, safety and discharge of employees. The Company's
manufacturing operations must also meet federal, state, provincial and local
regulatory standards in the areas of labor, safety and health. Historically,
the cost of regulatory compliance has not had a material adverse effect on the
Company's sales or operations. The Company believes it is in material
compliance with applicable laws including laws related to the handling and use
of environmentally hazardous materials.
EMPLOYEES
As of March 31, 2000, the Company had 316 full-time employees. Except
for certain executive officers, all of the Company's employees are employed at
will. None of the Company's employees is represented by a labor union. The
Company believes that its relationship with its employees is good.
In addition, DO Group employed 190 full-time people at March 31, 2000.
Of this total, 57 are represented by the Carpenters Union and 28 are
represented by the Steelworkers Union.
CERTAIN CONSIDERATIONS
COMPETITION. The markets in which the Company participates are highly
competitive. In the future, the Company expects increased competition from
the Company's existing competitors as well as from other companies which may
enter the markets served by the Company. Only certain elements of the
Company's products are patented so the unpatented elements could be reverse
engineered and duplicated by competitors who are able to develop the
manufacturing equipment and processes to do so. Many of the Company's
competitors have greater name recognition and greater financial, personnel,
manufacturing and marketing resources than the Company. The Company believes
that competition for its products is generally based on product quality and
characteristics, service and price. Most of the Company's products are more
expensive than products sold by the Company's competitors in the same markets.
11
However, the Company believes that it has been able to compete in such markets
and increase its market share by emphasizing the quality and performance of
its products as compared to its competitors' products. Introduction of
similar products by low cost producers would put price and margin pressure on
the Company. The Company's continued success will depend upon, among other
things, its ability to continue to manufacture and market high quality, high
performance products at prices competitive in the markets served by the
Company.
COMPANY GROWTH AND ACQUISITIONS. The Company's financial performance may
be harmed if it is unable to effectively manage its existing operations or
anticipated growth. The Company has grown significantly since fiscal 1998
with net sales increasing to $25.3 million in fiscal 1998, $29.5 million in
fiscal 1999 and $47.5 million in fiscal 2000. Mity-Lite also recently added
substantial operations through the Broda Enterprises, CenterCore, and DO Group
acquisitions and intends to continue to pursue other complementary
acquisitions. The Company's growth and acquisitions have strained its
management team and other resources. Mity-Lite faces significant challenges
integrating the recent acquisitions into its operations, any of which could
adversely affect its revenue and earnings.
PRODUCT LINE EXPANSION STRATEGIES; ENTRY INTO NEW MARKETS. The Company's
expansion of its current product lines is contingent, among other things, upon
the Company's ability to develop and/or acquire additional lines of
complementary Institutional furniture which can be purchased or manufactured
in a cost efficient manner and sold at competitive prices in the Company's
markets. The Company currently has no commitments, agreements or
understandings with respect to any acquisitions of product lines or of
companies with complementary products or businesses. The Company's ability to
increase penetration of the domestic table market depends in part on the
Company's ability to expand its in-house sales and customer service staff and
locate and hire qualified personnel. No assurances can be made that the
Company will be able to expand its product lines and its sales force and
further penetrate its markets.
RAW MATERIAL PRICES AND SOURCES. Both the plastic used in the Company's
products and the tubing used in the Company's table and chair legs are
manufactured according to Company specifications. The Company's castors for
its health care seating are also manufactured to its specifications by a
single supplier. The Company's control units for its intensive use seating
are proprietary. Mity-Lite's multipurpose room operations intend to operate
without substantial inventory levels of raw materials by depending on certain
key suppliers to provide raw materials on a "just-in-time" basis. The Company
believes that necessary materials are generally available from alternate
suppliers. However, any shortages or significant interruptions in the
delivery of raw materials could have a material adverse effect on the
Company's production schedule and operations. Price increases for raw
materials used in the Company's products would put pressure on the Company's
profit margins if the Company were unable to pass such price increases through
to customers.
12
WARRANTY SERVICE COSTS. The Company's warranty service costs for fiscal
years ended March 31, 1998, 1999, and 2000 totaled 1.5 percent of net sales
or $373,000, 1.6 percent of net sales or $463,000 and 1.2 percent of net sales
or $574,000, respectively. The Company intends to continue to offer
warranties covering materials and workmanship on its existing products and
anticipates providing a warranty covering materials and workmanship for all
complementary product lines developed or acquired by the Company. While the
Company has implemented improved quality control measures that it expects will
reduce warranty claims, it is possible that warranty servicing costs will
increase in future periods. Furthermore, the Company is not in a position to
anticipate the additional warranty service costs that may be incurred as a
result of the Company's expansion into new or complementary product lines.
The Company also cannot predict what the future warranty costs will be with
respect to product lines from recent acquisitions.
C CORE, INC. As part of the strategy of acquiring the assets of The
CenterCore Group, Inc., the Company closed the manufacturing and corporate
headquarters of CenterCore. Manufacturing was moved to Marked Tree, Arkansas
and the headquarters, to Elkhart, Indiana. The business operations of C Core
have been adversely affected by the transition. The Company has plans in
place to continue to address its concerns with C Core. However, continued
interruptions and transitional issues may harm the Company's operations as a
whole.
FUTURE VARIATIONS IN OPERATING RESULTS. The Company's short-term
profitability could be adversely affected by its decision to develop or
acquire complementary product lines, hire additional sales staff, and transact
additional acquisitions. Various factors, including acquisition related
expenses, amortization of goodwill, the ability to find and train qualified
personnel, operational transitions, timing of new product introductions and
the cost of penetrating new markets and changes in product mix, may have an
adverse effect on the Company's results of operations. While the Company
believes that the addition of new product lines will increase the Company's
long term profitability, there can be no assurance that the Company will
continue to experience profitability at historical rates. No assurances can
be or are made that the Company will not experience temporary fluctuations in
operations. While the Company has not experienced substantial negative
variations in quarterly operating results during the fiscal years ended March
31, 1998, 1999 and 2000, no assurances can be made that the Company will not
experience such quarterly variations in the future.
REGULATION AND ENVIRONMENTAL CONSIDERATIONS. The Company is subject to
various local, state, provincial and federal laws and regulations including,
without limitation, regulations promulgated by federal, state and provincial
environmental, health and labor agencies. Historically, regulatory compliance
has not had a material adverse effect on the Company's sales or operations.
However, changes in the laws and regulations governing the Company's business
may impose an increased financial burden upon the Company which could
adversely affect the Company's business or operations. Actions by federal,
state, provincial and local governments concerning environmental or other
matters could result in regulations that could increase the cost of producing
the products manufactured and sold by the Company. Certain of the Company's
operations are subject to federal, state, provincial and local laws and
environmental regulations that impose limitations on the discharge of
pollutants into the air. The Company believes that it is in material
compliance with applicable air quality laws and regulations. The Company
cannot predict with any certainty its future capital expenditure requirements
13
relating to environmental compliance because of continually changing
compliance standards and technology. The Company does not have insurance
coverage for environmental liabilities and does not anticipate obtaining such
coverage in the future.
FORWARD-LOOKING STATEMENTS. Certain statements made in the "Business"
and "Management's Discussion and Analysis" portions of this filing are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). In addition, when used in
this filing, the words or phrases "may," "will," "Management believes,"
"Company believes," "Company intends," "estimates," "projects," "anticipates,"
"expects" and similar expressions are intended to identify "forward-looking
statements" within the meaning of the Reform Act.
Forward-looking statements contained herein include plans and objectives
of management for future operations, including plans and objectives relating
to the products, marketing, customers, product line expansions, manufacturing
process and potential acquisitions. These forward-looking statements involve
risks and uncertainties and are based on certain assumptions that may not be
realized. Actual results and outcomes may differ materially from those
discussed or anticipated. The forward-looking statements and associated risks
set forth herein and elsewhere in this filing relate to: (i) the Company's
expectation that it will be able to continue to increase net sales of table
products and expand its share of the market for lightweight, durable, folding
leg table and achieve gross margins on chair products slightly less than its
gross margins on its table products, (ii) the Company's anticipation that it
will be able to attract new customers, (iii) the Company's intentions to
expand into new markets, (iv) the Company's ability to locate and consummate
acquisitions of complementary product lines or companies on terms acceptable
to the Company and integrate such acquisitions together with its recent
acquisitions into the Company's operations, (v) the Company's intention to
expand and introduce new product lines to existing customers, (vi) the
Company's expectation that it will be able to expand into new market segments
by developing new products or acquiring other products or businesses in such
segments and (vii) the Company's expectation that its cash from operations and
other sources will be sufficient for its current needs.
All forward-looking statements involve predictions and are subject to
known and unknown risks and uncertainties, including, without limitation,
those discussed below as well as general economic and business conditions,
that could cause actual results to differ materially from historical earnings
and those presently anticipated or projected. Readers should not place undue
reliance on any such forward-looking statements, which speak only as of the
date made. The considerations listed below and elsewhere in this filing could
affect the Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any views or
statements expressed with respect to future periods. Important factors and
risks that might cause such differences, include, but are not limited to (a)
lower than expected revenue, revenue growth and cash flow from operations
because of adverse economic or business conditions impacting the demand for
higher priced Institutional furniture products such as those offered by the
Company, or the Company's inability, for any reason, to efficiently introduce
new Institutional furniture products meeting the Company's quality and price
standards or implement its marketing strategies, (b) management's ability to
manage effectively the Company's growth, integrate the Broda, CenterCore, and
DO Group acquisitions and manage the Company's geographically diverse
operations, (c) the Company's ability to expand successfully into new markets
such as in the specialty office seating and systems market and the health care
14
seating and seating accessories market, (d) import restrictions and economic
conditions in the Company's foreign markets, (e) increased competition in the
Company's existing and future markets, (f) the market's acceptance of higher
priced multipurpose room, specialty office and health care furniture, (g) the
Company's ability to maintain relatively low cost labor rates in a period of
lower unemployment, (h) the Company's ability to source acceptable raw
materials on a just-in-time basis at current prices, (i) increased product
warranty service costs if warranty claims increase as a result of the
Company's new manufacturing processes, new product lines or for any other
reason, (k) the Company's ability to refine and enhance the quality and
productivity of its manufacturing process, (l) the Company's ability to
manufacture and market at current margins high quality, high performance
products at competitive prices, and (m) the Company's ability to locate and
consummate acquisitions of complementary product lines or companies on terms
acceptable to the Company and integrate such acquisitions into the Company's
operations.
In light of the significant uncertainties inherent in forward-looking
statements, the inclusion of any such statement should not be regarded as a
representation by the Company or any other person that the objectives or plans
of the Company will be achieved. The Company disclaims any obligation or
intent to update any such factors or forward-looking statements to reflect
future events or developments.
ITEM 2. PROPERTIES
The Company's corporate headquarters and multipurpose room furniture
manufacturing facility are located in Orem, Utah (approximately 40 miles south
of Salt Lake City). This facility consists of approximately 71,000 square
feet of leased manufacturing, office, research and development and storage
space located on approximately three acres of leased land. The facility and
related real estate is leased from a trust, of which Gregory L. Wilson's uncle
is one of the trustees, under a lease agreement for a five year term expiring
in the year 2005. The base monthly lease payment is $17,100. The Company
pays all maintenance costs, taxes and insurance. In addition, the Company
purchased approximately nine acres of land across the street from its leased
facility. The Company is currently building a 30,000 square foot office and
manufacturing facility on this new property. The Company believes that by
adding additional equipment and production shifts, its current facility will
serve its multipurpose furniture manufacturing needs for the term of the
lease. The Company currently anticipates that it will need additional office
space within the next year and anticipates either leasing or constructing
additional facilities for future expansion.
The Company's health care seating manufacturing facilities are located in
Waterloo, Ontario, Canada (approximately 60 miles west of Toronto). These
facilities consist of two adjacent buildings with approximately 30,000 square
feet of leased manufacturing, office, research and development and storage
space. The facilities and related real estate are leased under an agreement
for a two year term expiring in the year 2000. The Company will then have the
option of renewing the lease for two years upon the same terms and conditions
for an amount mutually agreed upon. The base monthly lease payment is
approximately $5,000. The Company pays all maintenance costs, taxes and
insurance. The Company believes that the facilities will serve its health
care seating manufacturing needs for the term of the lease.
15
The Company's new subsidiary, DO Group, has two facilities. Its
headquarters and chair manufacturing operations are located in Elkhart,
Indiana and are leased from a related party. This facility, consisting of
approximately 80,000 square feet, and related real estate are leased under an
agreement for a five year term expiring in the year 2002. The Company will
then have the option of renewing the lease for five years upon the same terms
and conditions for an amount mutually agreed upon. The base monthly lease
payment is approximately $11,800. The Company pays all maintenance costs,
taxes and insurance. DO Group's other facility consists of 135,000 square
feet and is located in Marked Tree, Arkansas. This facility is owned by DO
Group and includes its panel and systems manufacturing operations.
ITEM 3. LEGAL PROCEEDINGS
The Company is the plaintiff in a suit against a former distributor of
its health care seating products. The Company is also subject to a
counterclaim by the defendant in such action and the Company intends to
vigorously defend against this counterclaim. The Company does not believe
that the resolution of such counterclaim will have a material impact upon its
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended March 31, 2000.
16
PART II
Item 5. MARKET VALUE OF THE REGISTRANT'S COMMON STOCK
The Company's Common stock is traded on the Nasdaq National Market System
under the symbol MITY. The Company's Common Stock first began trading on
April 29, 1994.
High Low
------------- -------------
Fiscal Year Ended March 31, 2000:
First Quarter . . . . . . . . $17.33 $10.17
Second Quarter. . . . . . . . 19.00 12.50
Third Quarter . . . . . . . . 20.75 14.50
Fourth Quarter. . . . . . . . 19.25 15.06
Fiscal Year Ended March 31, 1999:
First Quarter . . . . . . . . $13.17 $10.67
Second Quarter. . . . . . . . 12.33 9.67
Third Quarter . . . . . . . . 11.50 8.04
Fourth Quarter. . . . . . . . 10.67 8.67
There were approximately 143 security holders of record as of June 6,
2000. In addition, management estimates that there were approximately 2,400
beneficial shareholders. Since the closing of its public offering, the
Company has not declared dividends and intends to retain earnings for use in
the business and for potential acquisitions in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference to the
Company's 2000 Annual Report to Shareholders, extracts of which are attached
as Exhibit 13.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference to the
Company's 2000 Annual Report to Shareholders, extracts of which are attached
as Exhibit 13.
17
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company manufacturers its products in the United States and Canada
and sells its products in those markets as well as in other countries. Most
of the Company's sales and expenses are transacted in U.S. dollars with
limited transactions occurring in Canadian dollars or other foreign
currencies. For the year ended March 31, 2000, approximately 4.0 percent of
the Company's net sales and 6.3 percent of the Company's expenses were
denominated in currencies other than the U.S. dollar. Foreign currency
exchange rate fluctuations did not have a material impact on the financial
results of the Company during fiscal 2000. The Company generally does not
hedge its foreign currency exposure.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference to the
Company's 2000 Annual Report to Shareholders, extracts of which are attached
as Exhibit 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None to report.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item is incorporated by reference to the
sections of the Company's Proxy Statement filed in connection with its 2000
Annual Meeting of Stockholders entitled "Nominees" and "Directors and
Executive Officers."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
section of the Company's Proxy Statement filed in connection with its 2000
Annual Meeting of Stockholders entitled "Executive Compensation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the
section of the Company's Proxy Statement filed in connection with its 2000
Annual Meeting of Stockholders entitled "Security Ownership of Management and
Others."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
sections of the Company's Proxy Statement filed in connection with its 2000
Annual Meeting of Stockholders entitled "Executive Compensation" and "Certain
Transactions."
18
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report
(1) Financial Statements
See "Item 8 - Financial Statements and Supplementary Data" and
"Exhibit 13 - 2000 Annual to Shareholders" for Financial
Statements included with this Annual Report on Form 10-K.
(2) Financial Statement Schedules
Schedule II - Valuation and Qualifying Accounts
All other schedules have been omitted because they are not
required, not applicable, or the information is otherwise set
forth in the financial statements or notes thereto.
(3) Exhibits
INDEX TO EXHIBITS
Exhibit No. Description Location
- ----------- ------------------------------------------------------ --------
2.1 Contribution Agreement dated as of March 24, 1997 by
and among Estate of Chester E. Dekko, David Kebrdle,
Dennis and Mary M. Kebrdle, Domenic and Martha S.
Federico, ChiCol Group, Inc., DO Group, Inc., Sican
Corp., Sican II Corp., DO Group Holding, Inc. and
Mity-Lite, Inc. (5)
2.2 Stock Purchase Agreement dated as of March 13, 1997
between Mity-Lite, Inc. and Xaio, Inc. (5)
2.3 Stock Purchase Agreement dated as of March 13, 1997
between Mity-Lite, Inc. and Ellman Equities, Inc. (5)
2.4 Stock Purchase Agreement dated as of March 13, 1997
between Mity-Lite, Inc. and Key Equity Capital
Corporation (5)
2.5 Stock Purchase Agreement dated as of March 13, 1997
between Mity-Lite, Inc. and National City Capital
Corporation (5)
2.6 Stock Purchase Agreement dated as of March 13, 1997
between Mity-Lite, Inc. and Cardinal Development
Capital Fund I (5)
2.7 Term Loan Agreement dated as of March 24, 1997
between Mity-Lite, Inc. and Sican Corp. (5)
2.8 Put Agreement dated as of March 24, 1997 by and
among Mity-Lite, Inc. and Dennis Kebrdle, David
Kebrdle, Domenic Federico, ChiCol Group, Inc., Sican
II Corp., and DO Group, Inc. (5)
2.9 Stock Purchase Agreement dated as of November 20,
1998, by and among Mity-Lite Acquisition Corp. and
Stephen E. Brotherston, Glenn C. Brotherston, Ian D.
Brotherston, Margaret E. Brotherston and Sandra L.
Brotherston (9)
19
2.10 Asset Purchase Agreement dated as of April 9, 1999,
by and among The CenterCore Group, Inc., a Delaware
Corporation, Fleet Capital Corporation, a Rhode Island
Corporation, and C Core, Inc., a Utah Corporation and
wholly-owned subsidiary of Mity-Lite, Inc. (10)
2.11 Form of Assignment Agreement by and among BOCCC, Inc.,
a Utah Corporation and wholly-owned subsidiary of
Mity-Lite, Inc., and various parties holding subordinated
debt instruments of The CenterCore Group, Inc. This form
of Assignment Agreement is substantially the same
agreement that was signed by BOCCC, Inc. and nine
different subordinated debt holders. (10)
2.12 Stock Purchase Agreement, By and Among DO Group Holding,
Inc., David Kebrdle, Mary M. Kebrdle, Martha S. Federico,
Estate of Chester E. Dekko, Dennis Kebrdle, Domenic
Federico and Mity-Lite, Inc. dated March 17, 2000 (12)
3.1 Amended and Restated Articles of Incorporation of
the Registrant (1)
3.2 Amended and Restated Bylaws of the Registrant (1)
3.3 First Amendment to the Amended and Restated Bylaws
of Registrant (1)
4.1 Form of Stock Certificate (1)
10.1 Revolving Note dated March 16, 1992 and Revolving
Loan Agreement dated March 16, 1992 between the
Registrant and First Security Bank of Utah, N.A. (1)
10.2 Modification Agreement dated March 16, 1993 between
the Registrant and First Security Bank of Utah, N.A. (1)
10.3 Lease Agreement dated November 1, 1993 between the
Registrant and the Walter M. and Orpha M. Lewis Family
Trust (1)
10.4 Trademark License dated November 23, 1993 between the
Registrant and R.D. Werner Co., Inc. (1)
10.5 Solicitation, Offer and Award Contract between the
Registrant and the General Services Administration
Federal Supply Service dated January 27, 1992 (issued
March 6, 1990) and Amendments thereto dated January
27, 1992 (effective July 16, 1990), January 27, 1992
(effective December 1, 1990), January 27, 1992
(effective December 28, 1991) and the Revision of
August 24, 1992 (1)
10.6 Notice of Contract Award dated June 23, 1993 between
the Registrant and the Commonwealth of Virginia,
Department of General Services Division of Purchases
and Supply (1)
10.7 Agreement dated July 26, 1990 between the Registrant
and the State of Utah, Department of Administrative
Services and Revisions thereto dated March 8, 1991,
June 5, 1991, and May 19, 1992 and March 10, 1993 (1)
10.8 Agreement dated December 17, 1991 between the
Registrant and the Air Force Nonappropriated Fund
Purchasing Office (1)
10.9 Purchasing Contract effective October 1, 1993 between the
Registrant and The Corporation of the Presiding Bishop of
The Church of Jesus Christ of Latter-Day Saints (1)
10.10 Employment Agreement with attached Proprietary
Information Agreement dated effective as of May 21, 1993
between Registrant and Gregory L. Wilson (1)
20
10.11 Employment Agreement with attached Proprietary
Information Agreement dated effective as of May 21, 1993
between Registrant and Stanley L. Pool (1)
10.12 Employment Agreement with attached Proprietary
Information Agreement dated effective as of May 21, 1993
between Registrant and Kenneth A. Law (1)
10.13 Employment Agreement with attached Proprietary
Information Agreement dated effective as of February
16, 1994 between Registrant and Brent Bonham (1)
10.14 Employment Agreement with attached Proprietary
Information Agreement dated effective as of February
16, 1994 between Registrant and Bradley T Nielson (1)
10.15 1990 Stock Option Plan, as amended and Form of Stock
Option Agreements (1)
10.16 Form of Indemnification Agreements between Registrant
and officers and directors of Registrant (1)
10.17 Form of Lock-up Agreements with Shareholders (1)
10.18 Form of Confidentiality Agreement entered into with
employees of the Registrant (1)
10.19 Key-Man Insurance Policy between the Company and
Chubb Sovereign Life Insurance Company (1)
10.20 Distributor Agreement between the Company and Sebel
Furniture Limited dated February 14, 1994 (2)
10.21 Lease Agreement dated March 31, 1995 between the Company
and the Walter M. and Orpha M. Lewis Family Trust (3)
10.22 Exclusive Distributor Agreement between the Company
and Mobilite International Limited (aka Mity-Lite
(Europe) Limited) (3)
10.23 Purchasing Contract effective October 1, 1995 between the
Registrant and The Corporation of the Presiding Bishop of
The Church of Jesus Christ of Latter-Day Saints (4)
10.24 Promissory Note dated December 6, 1995 between the
Registrant and Zions First National Bank (4)
10.25 Promissory Note dated October 27, 1995 between the
Registrant and First Security Bank (6)
10.26 Summary Plan Description and Basic Plan Document for
the 1995 Mity-Lite,Inc. Employee Retirement Plan (6)
10.27 Promissory Note dated January 23, 1997 between the
Registrant and Zions First National Bank (7)
10.28 Modification Agreement (dated October 27, 1996) to
Promissory Note dated October 27, 1995 between the
Registrant and First Security Bank (7)
10.29 Lease Agreement Amendment dated October 31, 1996
between the Company and the Walter M. and Orpha M.
Lewis Family Trust (7)
10.30 Promissory Note dated December 15, 1997 between the
Registrant and Zions First National Bank (8)
10.31 Modification Agreement (dated October 25, 1997) to
Promissory Note dated October 27, 1995 between the
Registrant and First Security Bank (8)
10.32 1997 Stock Incentive Plan and Form of Agreements (8)
10.33 Promissory Note dated November 18, 1998 between the
Registrant and Zions First National Bank (11)
10.34 Promissory Note dated May 26, 2000 between the Registrant
And Zions First National Bank
11.1 Statement Regarding Computation of Per Share Earnings
13 2000 Annual Report to Shareholders (only contains items
incorporated by reference in this Annual Report on
Form 10-K)
21
21 Subsidiaries of the Registrant
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Crowe, Chizek and Company LLP
27.1 Financial Data Schedule - Fiscal Year Ended March 31, 2000
99 Independent Auditors' Report to the Directors of DO
Group, Inc.
- --------------------------------------------
(1) Incorporated by reference to the referenced exhibit number to the
Company's Registration Statement on Form SB-2, Reg. No. 33-76758-D.
(2) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-KSB for the year ended March 31, 1994.
(3) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-KSB for the year ended March 31, 1995.
(4) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-QSB for the quarter ended December 31, 1995.
(5) Incorporated by reference to the referenced exhibit number to the
Company's Form 8-K dated March 31, 1997.
(6) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-KSB for the year ended March 31, 1996.
(7) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-KSB for the year ended March 31, 1997.
(8) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-KSB for the year ended March 31, 1998.
(9) Incorporated by reference to the referenced exhibit number to the
Company's Form 8-K dated November 25, 1998.
(10) Incorporated by reference to the referenced exhibit number to the
Company's Form 8-K dated April 9, 1999.
(11) Incorporated by reference to the referenced exhibit number to the
Company's Form 10-K for the year ended March 31, 1999.
(12) Incorporated by reference to the referenced exhibit number to the
Company's Form 8-K dated April 1, 2000.
(b) Reports on Form 8-K
Form 8-K filed on April 14, 2000 to report acquisition of the 50.1
percent interest in DO Group, Inc.
(c) Financial Statement Schedules
22
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and
Shareholders of Mity-Lite, Inc.:
We have audited the consolidated financial statements of Mity-Lite, Inc. and
subsidiaries (the Company) as of March 31, 2000 and 1999, and for each of the
three years in the period ended March 31, 2000, and have issued our report
thereon dated May 12, 2000; such financial statements and report are included
elsewhere in this Form 10-K. Our audits also included the financial statement
schedule of the Company, listed in Item 14. This financial statement schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as whole, presents fairly in all material respects
the information set forth therein.
Deloitte & Touche LLP
Salt Lake City, Utah
May 12, 2000
MITY-LITE, INC. AND SUBSIDIARY
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MARCH 31, 2000, 1999 AND 1998
Additions
Balance Charged Acquisitions
At to Costs from Deductions Balance
Beginning and Acquired from at End
of Period Expenses Companies Reserves of Period
--------- --------- ----------- ---------- ---------
ACCOUNTS RECEIVABLE ALLOWANCE:
Year ended:
March 31, 2000 $395,000 $84,000 $988,000 $288,000 $1,179,000
March 31, 1999 $259,000 $131,000 $25,000 $20,000 $395,000
March 31, 1998 $161,000 $101,000 -- $3,000 $259,000
24
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Orem, State of Utah, on the 28th of
June, 2000.
MITY-LITE, INC.
By: /s/ Gregory L. Wilson
-------------------------
Gregory L. Wilson, President
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated:
Signature Title Date
--------- ----- ----
/s/ Gregory L. Wilson Chairman of the Board, June 28, 2000
- --------------------- President
Gregory L. Wilson and Director
(Principal Executive
Officer)
/s/ Bradley T Nielson Chief Financial Officer and June 28, 2000
- --------------------- Chief Operating Officer
Bradley T Nielson (Principal Financial and
Accounting Officer)
/s/ Ralph E. Crump Director June 28, 2000
- ---------------------
Ralph E. Crump
/s/ Peter Najar Director June 28, 2000
- ---------------------
Peter Najar
/s/ C. Lewis Wilson Director June 28, 2000
- ---------------------
C. Lewis Wilson