1
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U.S. Securities and Exchange Commission
Washington, D.C. 20549
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FORM 10-Q
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-23898
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MITY ENTERPRISES, 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)
REGISTRANT'S TELEPHONE NUMBER: (801) 224-0589
N/A
(Former name, former address and former fiscal year, if changed since last
report)
----------------------------------------------------
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
There were 5,013,192 shares of the registrant's Common Stock, par value
$.01 per share, outstanding on July 29, 2002.
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2
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MITY ENTERPRISES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
JUNE 30, MARCH 31,
ASSETS 2002 2002
----------- -----------
Current assets:
Cash and cash equivalents. . . . . . . . . . $10,115,000 $ 8,926,000
Available-for-sale securities. . . . . . . . 3,397,000 4,593,000
Accounts receivable, less allowances of
$323,000 at June 30, 2002 and
$346,000 at March 31, 2002 . . . . . . . . 4,943,000 4,382,000
Inventories. . . . . . . . . . . . . . . . . 1,458,000 1,235,000
Prepaid expenses and other current assets. . 485,000 599,000
Deferred income taxes, current . . . . . . . 2,966,000 3,117,000
Net current assets of discontinued
operations . . . . . . . . . . . . . . . . 695,000 1,563,000
----------- -----------
Total current assets . . . . . . . . . . . . . 24,059,000 24,415,000
Property and equipment, net. . . . . . . . . . 8,301,000 6,286,000
Deferred income taxes. . . . . . . . . . . . . 406,000 405,000
Intangible assets, net . . . . . . . . . . . . 979,000 932,000
Note receivable. . . . . . . . . . . . . . . . 217,000 486,000
Net noncurrent assets of discontinued
operations . . . . . . . . . . . . . . . . . 856,000 845,000
----------- -----------
Total assets . . . . . . . . . . . . . . . . . $34,818,000 $33,369,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable . . . . . . . . . . . . . . $ 1,802,000 1,649,000
Accrued expenses and other current
liabilities. . . . . . . . . . . . . . . . 4,488,000 4,401,000
----------- -----------
Total current liabilities. . . . . . . . . . . 6,290,000 6,050,000
COMMITMENTS AND CONTINGENCIES. . . . . . . . . -- --
Stockholders' equity:
Preferred stock, par value $.10 per
share; authorized 3,000,000 shares; no
shares issued and outstanding. . . . . . -- --
Common stock, par value $.01 per share;
authorized 10,000,000 shares; issued
and outstanding 5,010,555 at June 30,
2002 and 5,000,343 at March 31, 2002 . . 50,000 50,000
Additional paid-in capital . . . . . . . . 11,830,000 11,755,000
Retained earnings. . . . . . . . . . . . . 16,620,000 15,615,000
Accumulated other comprehensive gain(loss) 28,000 (101,000)
----------- -----------
Total stockholders' equity . . . . . . . . . 28,528,000 27,319,000
----------- -----------
Total liabilities and stockholders' equity . . $34,818,000 $33,369,000
=========== ===========
See accompanying notes to unaudited condensed consolidated
financial statements.
3
MITY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED JUNE 30,
2002 2001
----------- -----------
Net sales . . . . . . . . . . . . . . . . . . . . $10,559,000 $11,050,000
Cost of products sold . . . . . . . . . . . . . . 6,068,000 6,427,000
----------- -----------
Gross profit. . . . . . . . . . . . . . . . . . . 4,491,000 4,623,000
Expenses:
Selling . . . . . . . . . . . . . . . . . . . . 1,597,000 1,746,000
General and administrative. . . . . . . . . . . 1,007,000 569,000
----------- -----------
Research and development. . . . . . . . . . . . 295,000 292,000
----------- -----------
Total expenses. . . . . . . . . . . . . . . . . . 2,899,000 2,607,000
Income from continuing operations . . . . . . . . 1,592,000 2,016,000
Other income (expense):
Interest income . . . . . . . . . . . . . . . . 100,000 70,000
Other . . . . . . . . . . . . . . . . . . . . . (43,000) (7,000)
----------- -----------
Total other income, net . . . . . . . . . . . . . 57,000 63,000
----------- -----------
Income from continuing operations before
provision for income taxes. . . . . . . . . . . 1,649,000 2,079,000
Income tax expense. . . . . . . . . . . . . . . . 644,000 804,000
----------- -----------
Net income from continuing operations . . . . . . 1,005,000 1,275,000
Discontinued operations (Note 7):
Loss from discontinued operations (net of
applicable income taxes of $166,000 for the
period ended June 30, 2001) . . . . . . . . . -- (271,000)
Estimated loss on disposal (net of applicable
income taxes of $1,996,000) . . . . . . . . . -- (3,256,000)
----------- -----------
Net income (loss) . . . . . . . . . . . . . . . . $ 1,005,000 $(2,252,000)
=========== ===========
4
Basic earnings per share from continuing
operations. . . . . . . . . . . . . . . . . . $ 0.20 $ 0.25
Basic loss per share from discontinued operations -- (0.05)
Basic loss per share on disposal of discontinued
operations. . . . . . . . . . . . . . . . . . -- (0.64)
----------- -----------
Basic earnings (loss) per share . . . . . . . . . $ 0.20 $ (0.44)
=========== ===========
Weighted average number of common shares - basic. 5,006,792 5,108,837
=========== ===========
Diluted earnings per share from continuing
operations. . . . . . . . . . . . . . . . . . $ 0.19 $ 0.24
Diluted loss per share from discontinued
operations. . . . . . . . . . . . . . . . . . -- (0.05)
Diluted loss per share on disposal of
discontinued operations . . . . . . . . . . . -- (0.62)
----------- -----------
Diluted earnings (loss) per share . . . . . . . . $ 0.19 $ (0.43)
=========== ===========
Weighted average number of common and common
equivalent shares - diluted. . . . . . . . . . . 5,250,466 5,228,373
=========== ===========
See accompanying notes to unaudited condensed consolidated
financial statements.
5
MITY ENTERPRISES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
THREE MONTHS ENDED JUNE 30,
2002 2001
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss). . . . . . . . . . . . . . . . $ 1,005,000 $(2,252,000)
Adjustments to reconcile net income to net cash
provided by operating activities:
Net loss from discontinued operations. . . . -- 3,527,000
Depreciation and amortization. . . . . . . . 287,000 277,000
Deferred taxes . . . . . . . . . . . . . . . 151,000 (1,934,000)
Net loss on disposal of equipment. . . . . . 3,000 --
Tax benefit from exercise of stock options . 3,000 --
Changes in assets and liabilities:
Accounts receivable. . . . . . . . . . . . (516,000) 77,000
Inventories. . . . . . . . . . . . . . . . (200,000) (52,000)
Prepaid expenses and other current assets. (29,000) 458,000
Accounts payable . . . . . . . . . . . . . 139,000 (64,000)
Accrued expenses and other current
liabilities . . . . . . . . . . . . . . . 222,000 753,000
----------- -----------
Net cash provided by continuing operations . . . 1,065,000 790,000
Net cash provided by discontinued operations . . 899,000 2,203,000
----------- -----------
Net cash provided by operating activities. . . . 1,964,000 2,993,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale securities . . . (551,000) (1,852,000)
Sales and maturities of available-for-sale
securities . . . . . . . . . . . . . . . . . . 1,759,000 1,173,000
Proceeds from sales of property & equipment. . . 6,000 --
Decrease in note receivable. . . . . . . . . . . 270,000 --
Purchases of property and equipment. . . . . . . (2,298,000) (530,000)
----------- -----------
Net cash used in continuing operations . . . . . (814,000) (1,209,000)
Net cash used in discontinued operations . . . . (44,000) --
----------- -----------
Net cash used in investing activities. . . . . . (858,000) (1,209,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from exercise of stock options. . . 73,000 130,000
----------- -----------
Net cash provided by continuing operations . . . 73,000 130,000
Net cash used in discontinued operations . . . . -- --
----------- -----------
Net cash used in financing activities. . . . . . 73,000 130,000
----------- -----------
Effect of exchange rate changes on cash. . . . . 10,000 5,000
----------- -----------
Net increase in cash and cash equivalents. . . . 1,189,000 1,919,000
Cash and cash equivalents at beginning of period 8,926,000 4,857,000
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD . . . $10,115,000 $ 6,776,000
=========== ===========
6
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for income taxes . . $ 146,000 $ 188,000
See accompanying notes to unaudited condensed consolidated
financial statements.
7
MITY ENTERPRISES, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. BASIS OF PRESENTATION
Interim Period Accounting Policies
In the opinion of the Company's management, the accompanying unaudited
condensed consolidated financial statements contain all normal recurring
adjustments necessary to present fairly the Company's financial position and
results of operations for the interim period. Results of operations for the
three months ended June 30, 2002 are not necessarily indicative of results to
be expected for the full fiscal year ending March 31, 2003.
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial statements. Although
the Company believes that the disclosures in these unaudited condensed
consolidated financial statements are adequate to make the information
presented for the interim periods not misleading, certain information and
footnote information normally included in annual consolidated financial
statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission, and these financial statements should be read in conjunction with
the Company's audited consolidated financial statements included in the
Company's annual report to shareholders for the fiscal year ended March 31,
2002. Certain amounts in prior period financial statements have been
reclassified to conform with current period presentations including the
reclassification of discontinued operations as discussed in footnote 7.
2. INVENTORIES
Inventories consisted of the following (excluding discontinued
operations):
JUNE 30, MARCH 31,
2002 2002
----------- -----------
Materials and supplies . . . . $ 949,000 $ 747,000
Work-in-progress . . . . . . . 300,000 174,000
Finished goods . . . . . . . . 209,000 314,000
----------- -----------
$ 1,458,000 $ 1,235,000
=========== ===========
8
3. RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS
On June 29, 2001, the Financial Accounting Standards Board issued SFAS
No. 141, "Business Combinations" and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 establishes accounting and reporting
standards for business combinations. SFAS No. 141 is not anticipated to have
a material effect on the Company's financial results. SFAS No. 142
establishes accounting and reporting standards for goodwill and intangible
assets, requiring annual impairment testing for goodwill and intangible
assets, and the elimination of periodic amortization of goodwill and certain
intangibles. The Company adopted the provisions of SFAS No. 142 for the
Company's fiscal year 2003 beginning April 1, 2002. Application of the
nonamortization provisions of the Statement is expected to result in an
increase in net income of $42,000 for fiscal 2003. The Company performed the
first of the required impairment tests of goodwill of $932,000 related to its
healthcare seating operation according to the provisions of SFAS No. 142 and
has determined that this goodwill is not impaired.
4. COMPREHENSIVE INCOME
In accordance with SFAS No. 130, "Reporting Comprehensive Income," the
Company's comprehensive income consists of foreign currency adjustments and
unrealized gains and losses on available-for-sale securities. For the three
months ended June 30, 2002, comprehensive income exceeded net income by
$129,000 related to $116,000 in foreign currency translation gains and $13,000
in unrealized gains on available for sale securities. For the three months
ended June 30, 2001, comprehensive income exceeded net income by $98,000
related to foreign currency translation gains.
5. BUSINESS SEGMENT INFORMATION
In accordance with SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information," management views the Company as being
two continuing business segments: multipurpose room furniture and healthcare
seating, with multipurpose room furniture being the principal business
segment. The Company also has a discontinued segment consisting of specialty
office systems furniture. The multipurpose room furniture business segment
manufactures and markets lightweight, durable, folding leg tables, folding
chairs, stacking chairs, lecterns, and other related products. The Company's
healthcare seating segment manufactures and markets healthcare chairs and
related products. The discontinued specialty office systems furniture
business segment manufactures and markets open plan systems panel furniture,
computer free standing furniture, panel clusters and other related products.
The Company's healthcare seating segment represents all of the Company's
foreign-based sales.
Reportable segment data of continuing operations reconciled to the
consolidated financial statements for the three months ended June 30, 2002 and
2001 is as follows:
9
THREE MONTHS ENDED JUNE 30,
2002 2001
----------- -----------
Net sales:
Multipurpose room furniture. . . . . . . . $ 9,329,000 $ 9,773,000
Healthcare seating . . . . . . . . . . . . 1,230,000 1,277,000
----------- -----------
$10,559,000 $11,050,000
=========== ===========
Income from continuing operations:
Multipurpose room furniture. . . . . . . . $ 1,335,000 $ 1,699,000
Healthcare seating . . . . . . . . . . . . 257,000 317,000
----------- -----------
$ 1,592,000 $ 2,016,000
=========== ===========
Depreciation and amortization expense:
Multipurpose room furniture. . . . . . . . $ 267,000 $ 238,000
Healthcare seating . . . . . . . . . . . . 20,000 39,000
----------- -----------
$ 287,000 $ 277,000
=========== ===========
Capital expenditures, net:
Multipurpose room furniture. . . . . . . . $ 2,249,000 $ 516,000
Healthcare seating . . . . . . . . . . . . 49,000 14,000
----------- -----------
$ 2,298,000 $ 530,000
=========== ===========
JUNE 30, MARCH 31,
2002 2002
----------- -----------
Total assets:
Multipurpose room furniture. . . . . . . . $30,387,000 $28,215,000
Healthcare seating . . . . . . . . . . . . 2,880,000 2,746,000
Discontinued operations (Specialty office
systems segment) . . . . . . . . . . . . 1,551,000 2,408,000
----------- -----------
$34,818,000 $33,369,000
=========== ===========
10
6. COMPUTATION OF NET INCOME (LOSS) PER SHARE
The following is the Company's reconciliation of basic and diluted net income
per share for the three months ended June 30, 2002 and 2001 respectively.
THREE MONTHS ENDED
JUNE 30,
--------------------------
2002 2001
----------- -----------
Net income from continuing operations . . . . . . .$ 1,005,000 $ 1,275,000
Discontinued operations:
Net loss from discontinued operations. . . . . . . -- (271,000)
Estimated loss on disposal . . . . . . . . . . . . -- (3,256,000)
----------- -----------
Net income (loss) as reported . . . . . . . . . . .$ 1,005,000 $(2,252,000)
=========== ===========
BASIC:
Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . . . 5,006,792 5,108,837
=========== ===========
Basic net income per share from continuing
operations. . . . . . . . . . . . . . . . . . . . $ 0.20 $0.25
Basic net loss per share from discontinued
operations. . . . . . . . . . . . . . . . . . . . -- (0.05)
Basic net loss per share on disposal of
discontinued operations . . . . . . . . . . . . . -- (0.64)
----------- -----------
Basic net income (loss) per share. . . . . . . . . $ 0.20 $(0.44)
=========== ===========
DILUTED:
Common and common equivalent shares outstanding:
Weighted average number of common shares
outstanding . . . . . . . . . . . . . . . . . . . 5,006,792 5,108,837
Common stock equivalents from options computed
on the treasury-stock method using the average
fair market value of common stock outstanding
during the period . . . . . . . . . . . . . . . 243,674 119,536
----------- -----------
Shares used in the computation . . . . . . . . . 5,250,466 5,228,373
=========== ===========
Diluted net income per share from continuing
operations. . . . . . . . . . . . . . . . . . . . $ 0.19 $0.24
Diluted net loss per share from discontinued
operations. . . . . . . . . . . . . . . . . . . . -- (0.05)
Diluted net loss per share on disposal of
discontinued operations . . . . . . . . . . . . . -- (0.62)
----------- -----------
Diluted net income (loss) per share. . . . . . . . $ 0.19 $(0.43)
=========== ===========
11
7. DISCONTINUED OPERATIONS
On June 29, 2001, the Company's Board of Directors approved the plan for
exiting and selling the assets of the specialty office seating and systems
segment of its business (the CenterCore and DO Group businesses). As a result
of these actions and in accordance with Accounting Principles Board Opinion
No. 30, Reporting the Results of Operations Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary Unusual and
Infrequently Occurring Events and Transactions ("APB 30"), the Company is
treating the DO Group and CenterCore segment of its operations as a
discontinued operation. The net losses from operations for the discontinued
DO Group and CenterCore segment of the Company were $271,000 for the three
months ended June 30, 2001, net of applicable income taxes. An additional
estimated $3,256,000 loss was accrued for the three months ended June 30, 2001
to account for the expected losses on disposal and estimated operating losses
through the disposal date. For the quarter ended June 30, 2002, the Company
estimated operating loss, net of applicable taxes, for the discontinued
segment would be $269,000. The actual operating loss, net of applicable
taxes, for the same period was $243,000, or $26,000 less than estimated.
Also, for the three months ended June 30, 2002, the net current assets of
discontinued operations has decreased from $1.6 million to $0.7 million as
receivables have been collected.
On September 12, 2001, the Company completed the sale of its JG
auditorium seating line. The Company sold its inventory, intellectual
property, tooling, and limited machinery and equipment related to this product
line for $88,000. The book value of these assets at the time of sale was
approximately $20,000.
On October 2, 2001, the Company completed the sale of its Domore seating
line. The Company sold inventory, intellectual property, tooling, machinery
and equipment, and limited furniture and fixtures related to this product line
and its Elkhart headquarters for $150,000 in cash and $350,000 of notes from
the buyer. The first note, totaling $100,000, which bears interest at the
prime rate (adjusted monthly) as published by the Wall Street Journal,
requires monthly payments of interest only. The principal amount of this note
is due in April 2003. The second note, totaling $250,000, which also bears
interest at the prime rate, required monthly payments of interest only from
November 2001 through January 2002 and has required monthly principal and
interest payments since February 2002. This note is being amortized over a
five year period with a balloon payment for the remaining unpaid principal
balance due at the end of three years in January 2005. The notes are secured
by a subordinated security interest in all of the assets of the buyer. Both
of these notes were discounted using a 20% interest rate and valued on the
balance sheet at $82,000 and $185,000 respectively. Due to the uncertainty of
the collectability of the notes, the Company has established a reserve for the
entire notes receivable balance and any accrued interest receivable.
Summarized financial information of the discontinued DO Group and
CenterCore segment consist of the following:
12
JUNE 30, MARCH 31,
2002 2002
---------- ----------
CURRENT ASSETS:
Accounts receivable. . . . . . . . . . . . . $ 615,000 $1,478,000
Inventories. . . . . . . . . . . . . . . . . 80,000 85,000
----------- -----------
Total current assets. . . . . . . . . . . . . . $ 695,000 $1,563,000
=========== ===========
NON-CURRENT ASSETS:
Property and equipment, net. . . . . . . . . $ 856,000 $ 845,000
----------- -----------
Total non-current assets. . . . . . . . . . . . $ 856,000 $ 845,000
=========== ===========
8. NOTE RECEIVABLE
During the quarter ended December 31, 2001, the Company invested $250,000
in the form of a note receivable in a startup development company that
designs, manufactures and markets caskets for the death care industry. The
caskets are made of thermoformed ABS, the same process and material used for
making the Company's tables, and give the appearance of polished marble or a
deep laquer finished wood. During the quarter ended June 30, 2002, the
Company invested an additional $250,000 in the form of a note receivable.
Subsequent to the end of the June quarter, the Company invested an additional
$150,000 in the form of a note receivable. After review of the collectability
of the note receivable, the Company decided to fully reserve the $500,000
balance of the note as of June 30, 2002. This resulted in a non-recurring
charge to general and administrative expenses of $500,000 for the quarter.
The Company may, at its discretion, invest an additional $350,000 in notes
receivable in two increments over the next six months. After this investment,
the Company has the option to convert these notes into common stock
representing approximately 51% of the outstanding stock of the startup
development company. In addition, the Company has an option to acquire the
remaining 49% of the outstanding stock.
During the quarter ended March 31, 2002, the Company paid $50,000 as a
good faith deposit in a separate startup development company to investigate
the commercial development of a new technology. If the Company chooses to
close the transaction, the good faith deposit will be converted into 18.9
percent of the equity of the startup development company. The Company has a
further option to purchase an additional 31.1 percent equity for $82,000. If
the Company chooses not to close the transaction, the Company can use the good
faith deposit for the purchase of product from the startup development
company.
During the quarter ended March 31, 2002, the Company also set up a dealer
for the Company's multipurpose room furniture in Australia and created a note
receivable for $365,000. This note, which bears interest at the prime rate,
requires monthly payments of interest and principal in the amount of $6,000
and is being amortized over a six and one half year period. The note is
secured by all of the assets of the dealership and by personal guarantees from
the principals of the dealership. The Company has created a reserve of
$110,000 for this note receivable. At June 30, 2002, the gross value of this
note receivable was $345,000. At June 30, 2002, $68,000 was the current
portion of this note receivable which is included in prepaid expenses and
other current assets.
13
9. RELATED PARTY TRANSACTION
On June 3, 2002, the Company announced that it had purchased from a
related party its table and cart manufacturing facility, corporate
headquarters and related real estate located in Orem, Utah. The facility and
real estate were previously owned by the uncle of Gregory L. Wilson, the
Company's Chairman. For the last 15 years, this facility has been leased. The
transaction was valued at $2.0 million and was based on a previously performed
independent appraisal. The Company believes that this purchase will increase
its pretax profit margin by approximately $70,000 per year.
14
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The following discussion should be read in conjunction with the attached
consolidated financial statements and the notes thereto and with MITY
Enterprises, Inc.'s (the "Company's") Annual Report on Form 10-K for the
fiscal year ended March 31, 2002.
The Company designs and manufactures institutional furniture and markets
its products in niche markets. The Company's current ongoing product lines
consist of multipurpose room furniture and healthcare seating. In addition,
the Company continues to pursue development of new products and the
acquisition of product lines or companies that will be complementary to the
Company's businesses.
MULTIPURPOSE ROOM FURNITURE. The Company's multipurpose room furniture
is marketed under the Mity-Lite (R) trade name. It consists of lightweight,
durable folding leg tables, stacking chairs, folding chairs, lecterns, and
other related products. These products are used in multipurpose rooms of
educational, recreational, hotel and hospitality, government, office,
healthcare, religious and other public assembly facilities. Historically,
growth in this segment has come from an expanding base of new customers, from
increasing sales to existing customers and from expansion of the multipurpose
room product line. The current and future growth of the multipurpose room
furniture operations depends largely upon its ability to successfully
introduce and market new product lines of multipurpose room furniture and its
ability to profitably increase its market penetration into existing and new
markets.
MULTIPURPOSE ROOM FURNITURE OUTLOOK. The downturn in the domestic and
international economy, particularly the downturn in the furniture industry and
some of the Company's target markets such as hospitality and recreation
industries, has negatively impacted the Company's historical sales growth
rates. The events of September 11, 2001 have also negatively impacted many of
the Company's markets, particularly travel-related markets such as the hotel
and hospitality, recreational and public assembly markets. The U.S. office
furniture market declined by 17 percent in calendar year 2001 and industry
experts further declines of 13 percent in 2002. However, industry experts
also predict significant improvements in calendar year 2003 with a nearly 9
percent increase. The Company has also seen significant competitive pressure
in its multipurpose room table markets from lower-priced thermo-formed and
blow-molded tables and expects this pressure to continue. During the quarter
ending June 30, 2002, sales volumes were 4 percent lower compared to the prior
year's first quarter. The Company anticipates that weakness in furniture
demand will continue until overall business and economic conditions improve.
Beginning in the fourth quarter of fiscal 2002, and continuing in the first
quarter of fiscal 2003, order rates improved. Consequently, the Company
currently anticipates that sales volumes during the quarter ending September
30, 2002 will be 5 to 10 percent higher than the prior year's second quarter.
However, the Company may not be successful in achieving this sales level in
the second quarter.
15
HEALTHCARE SEATING. Through its wholly-owned subsidiary, Broda
Enterprises, Inc., the Company markets a line of healthcare seating products
to customers mostly in Canada and the United States. Broda's operations are
based in Waterloo, Ontario, Canada. Broda focuses on providing products which
assist patients with advanced needs due to a debilitating condition or
disease, and has developed a line of premium-priced geriatric seating
products. Broda chairs are serving a very specific niche in the healthcare
market and thus are not competing in the commodity-oriented general healthcare
seating market.
HEALTHCARE SEATING OUTLOOK. The Company believes that the specialty
healthcare seating market is less subject to economic pressures than the
Company's multipurpose room furniture operations. For the quarter ended June
30, 2002, the Company's healthcare seating operations had not been negatively
impacted by the downturn in the U.S. and world economies. However, the
medical and healthcare industry is more subject to regulatory changes that
could affect the demand for Broda's products. The Company is not aware of any
regulatory changes in the near future that would have a substantial and
negative impact on this business. The Company's healthcare seating
operation's future growth depends largely upon increasing its market
penetration into the U.S. and other foreign markets.
DISCONTINUED OPERATIONS. The Company's specialty office systems
operations located in Marked Tree, Arkansas and known as CenterCore and DO
Group, have experienced various operational challenges. Since acquiring and
taking over the direct management of DO Group, the Company has worked to
identify and resolve operational and other problems. The Company took action
to reduce the amount of losses incurred at DO Group and CenterCore by reducing
personnel costs through layoffs and implementing more sound business
practices. The Company devoted additional management as well as outside
consulting resources to the resolution of these problems. In spite of these
cutbacks and other management initiatives, DO Group and CenterCore continued
to sustain losses through June 2001. Beginning in July 2001 and through the
end of fiscal 2002, these operations were once again profitable and most of
the operational inefficiencies and information system problems were resolved.
On June 29, 2001, the Company's Board of Directors approved the plan for
exiting and selling the assets of the CenterCore and DO Group businesses. The
Company currently anticipates that this exit will be completed by the end of
the third quarter of fiscal 2003.
As a result of these actions and in accordance with APB 30, the Company
is treating the DO Group and CenterCore segment of its operations as a
discontinued operation. The net losses from operations for the discontinued
DO Group and CenterCore segment of the Company were $271,000 for the three
months ended June 30, 2001, net of applicable income taxes. An additional
estimated $3,256,000 loss was accrued for the three months ended June 30, 2001
to account for the expected losses on disposal and estimated operating losses
through the disposal date. For the quarter ended June 30, 2002, the Company
estimated operating loss, net of applicable taxes, for the discontinued
segment would be $269,000. The actual operating loss, net of applicable
taxes, for the same period was $243,000, or $26,000 less than estimated.
Also, for the three months ended June 30, 2002, the net current assets of
discontinued operations has decreased from $1.6 million to $0.7 million as
receivables have been collected.
16
On September 12, 2001, the Company completed the sale of its JG
auditorium seating line. The Company sold its inventory, intellectual
property, tooling, and limited machinery and equipment related to this product
line for $88,000. The book value of these assets at the time of sale was
approximately $20,000.
On October 2, 2001, the Company completed the sale of its Domore seating
line. The Company sold inventory, intellectual property, tooling, machinery
and equipment, and limited furniture and fixtures related to this product line
and its Elkhart, Indiana headquarters for $150,000 in cash and $350,000 of
notes from the buyer. The book value of these assets at the time of sale was
approximately $315,000. The first note, totaling $100,000, which bears
interest at the prime rate (adjusted monthly) as published by the Wall Street
Journal, requires monthly payments of interest only. The principal amount of
this note is due in April 2003. The second note, totaling $250,000, which
also bears interest at the prime rate, required monthly payments of interest
only from November 2001 through January 2002 and has required monthly
principal and interest payments since February 2002. This note is being
amortized over a five year period with a balloon payment for the remaining
unpaid principal balance due at the end of three years in January 2005. The
notes are secured by a subordinated security interest in all of the assets of
the buyer. Both of these notes will be discounted using a 20% interest rate
and will be valued on the balance sheet at $82,000 and $185,000 respectively.
Due to the uncertainty of the collectability of the notes, the Company has
established a reserve for the entire notes receivable balance and any accrued
interest receivable.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
This discussion and analysis of financial condition and results of
operations is based upon the Company's consolidated financial statements which
have been prepared in accordance with accounting principles generally accepted
in the United States. These principles require the use of estimates and
assumptions that affect amounts reported and disclosed in the financial
statements and footnotes. The critical accounting policies for the Company
which require management to make assumptions about matters that are uncertain
at the time of the estimate include the allowance for doubtful accounts
receivable, the reserve for obsolete inventory, accruals for warranty expense,
values for the discontinued operations, intangible assets, notes receivable,
and income taxes.
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE: The Company exercises considerable
judgment in determining the ultimate collectability of its accounts
receivable. Several factors are used in making these judgments including the
customer credit quality, historical write-off experience and current economic
trends. The Company reviews these factors quarterly, and the allowance is
adjusted accordingly. If the financial condition of the Company's customers
were to deteriorate, an additional allowance may be required.
RESERVE FOR OBSOLETE INVENTORY: Inventories are stated at the lower of cost,
on a first in, first out basis, or market. Additionally, the Company
evaluates its inventory reserves in terms of excess and obsolete exposures.
This evaluation includes such factors as anticipated usage, inventory turnover
and ultimate product sales value.
17
ACCRUALS FOR WARRANTY EXPENSE: The Company provides for the estimated cost of
product warranties at the time revenue is recognized. This warranty
obligation is affected by failure rates, the introduction of new products, and
the costs of material and labor to repair or replace the product. The Company
regularly assesses the adequacy of its accrual for warranty expense based upon
historical warranty rates and anticipated future warranty rates.
VALUES FOR THE DISCONTINUED OPERATIONS: During the quarter ended June 30,
2001, the Company developed and approved a plan for exiting and selling the
specialty office seating and systems furniture segment of its operations. As
a result of these actions, the Company is treating this segment as a
discontinued operation. In the quarter ended June 30, 2001, an additional
estimated $3,256,000 loss was accrued to account for the expected loss on
disposal of this business segment and estimated operating losses through the
disposal date. Considerable judgment was used to make this estimate based on
many factors including the net expected realizable value of the accounts
receivable and inventory, the selling value of the fixed assets, the
realization of tax benefits, the likelihood of finding a buyer within a
reasonable period of time, likely asset purchase structures, and the ability
to continue to run the business while searching for a buyer without sustaining
continued losses. Due to the high level of uncertainty in this process,
actual gains or losses may be less than or greater than those estimated.
INTANGIBLE ASSETS: The Company periodically reviews the carrying value of its
intangible assets which represents goodwill that arose upon its acquisition of
Broda Enterprises. This review is performed using estimates of future cash
flows. If the carrying value of the intangible asset is considered impaired,
an impairment charge is recorded for the amount by which the carrying value of
the intangible asset exceeds its fair value. No impairment charges have been
recorded related to Broda goodwill.
NOTES RECEIVABLE: The Company currently has two notes receivable with startup
development companies. The Company reviews these notes to determine likely
collectability. Since the notes are with startup development companies
without a history of an ability to create future cash flows, the Company bases
its belief in their collectability upon its understanding of the potential
future success of the products being developed. At this time, the Company has
reserved $500,000 on one of these notes receivable. Due to the high level of
uncertainty in the success of these products, these notes receivable may not
be ultimately realized. The Company also has a note receivable with a dealer
in Australia. The Company has created a reserve for a portion of this note
receivable based upon what the Company believes the liquidation value of this
operation to be.
INCOME TAXES: The Company has not provided a valuation allowance against the
deferred tax assets recorded in the financial statements. The Company
evaluates quarterly the realizability of its deferred tax assets based upon
expected future taxable income. Management believes that it is more likely
than not that future earnings will be sufficient to recover deferred tax
assets.
18
COMPARISON OF CONTINUING OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2002
AND 2001
NET SALES. The Company's first quarter fiscal 2003 net sales of
$10,559,000 were down 4 percent as compared with the first quarter net sales
in the prior fiscal year. For the quarter ended June 30, 2002, the decrease
reflects sales decreases, as compared to the quarter ended June 30, 2001, of 4
percent in the Company's healthcare chair operations and 5 percent in the
Company's multipurpose room operations. The Company's total international
sales represented 10 percent of net sales for the quarter ended June 30, 2002
as compared to 13 percent in the first quarter of fiscal 2002. The Company
attributes most of the decrease in sales in the multipurpose room operations
to lower table sales while chair sales increased only slightly. The Company
expects that its sales of multipurpose room furniture will be 5 to 10 percent
higher in the second quarter of fiscal 2003 compared to the second quarter of
fiscal 2002.
GROSS PROFIT. Gross profit as a percentage of net sales in the quarter
ended June 30, 2002 increased by 1 percentage point over the same quarter in
the prior fiscal year to 43 percent. This increase was due to lower material
and labor costs at the Company's multipurpose room furniture operation. This
increase was partially offset by higher overhead costs as a percent of sales
at the Company's multipurpose room furniture operations and a lower gross
margin at the Company's healthcare seating operations due primarily to higher
overhead costs.
SELLING EXPENSES. Selling expenses were 15 percent of net sales in the
first quarter of fiscal 2003 as compared to 16 percent for the first quarter
of the prior fiscal year. Actual expenses decreased by $149,000.
Multipurpose room furniture selling costs decreased by $212,000 over the prior
fiscal year. This decrease resulted from lower costs for sales literature,
advertising, trade shows, and personnel. Selling expenses at the healthcare
seating operations increased by $63,000 over the prior fiscal year due
primarily to increased personnel and travel costs partially offset by lower
costs for commissions.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
were 10 percent of net sales for the first quarter of fiscal 2003 as compared
to 5 percent for the first quarter of the prior fiscal year. Actual spending
increased by 77 percent or $438,000. The increase was primarily due to a
non-recurring charge of $500,000 that fully reserved the June 30, 2002 balance
in a note receivable to a startup development company. The reserve was made
due to concerns about the collectability of the note. This startup
development company designs, manufactures and markets caskets made of
thermoformed ABS. This increase was partially offset by lower personnel costs.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
were 3 percent of net sales for the first quarter of fiscal 2003 as compared
to 3 percent for the first quarter of the prior fiscal year. Actual spending
increased by $3,000.
OTHER INCOME AND EXPENSE. Other income and expense netted to $57,000 for
the first quarter of fiscal 2003. First quarter interest income was $100,000,
an increase of $30,000 from the first quarter of the prior fiscal year. The
increase was due to interest earned on the higher cash balance held in the
current fiscal year. Other expenses, which totaled $43,000 for the current
quarter, consisted of $34,000 in realized foreign currency exchange losses, a
$3,000 net loss on asset disposal and other losses of $6,000.
NET INCOME FROM CONTINUING OPERATIONS. For the reasons stated above, the
Company's fiscal 2003 first quarter net income from continuing operations of
$1,005,000 decreased $270,000 or 21 percent over the first quarter net income
from continuing operations in the prior fiscal year.
19
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents, which consist primarily of high-quality
commercial paper and repurchase agreements collateralized with U.S. Treasury
securities, totaled $10.12 million at June 30, 2002 as compared to $8.93
million at March 31, 2002.
The following table highlights certain key cash flow and capital
information pertinent to the discussion that follows:
THREE MONTHS ENDED
JUNE 30, 2002
------------------
Net cash provided by operating activities. . . . 1,964,000
Net sales of available-for-sale securities . . . 1,208,000
Decrease in note receivable. . . . . . . . . . . 270,000
Purchases of property and equipment. . . . . . . (2,298,000)
Net proceeds from exercise of stock options. . . 73,000
The increase in cash and cash equivalents was due primarily to cash
provided by operating activities ($1.96 million), the net sale of
available-for-sale securities ($1.21 million), the net decrease in note
receivable ($0.27 million) and net proceeds related to the exercise of stock
options ($0.07 million). This increase was partially offset by purchases of
property and equipment ($2.30 million).
Historically, the Company has financed its growth primarily through cash
flow from its operations. The Company's subsidiary, Broda Enterprises, has a
line of credit. The limit on this facility is $0.66 million. As of June 30,
2002, no amount was drawn under this facility. This credit facility requires
the maintenance of certain financial ratios and levels of working capital. As
of June 30, 2002, the Company was in full compliance with the loan covenants
related to the Broda Enterprises' credit facility. The Company's liquidity
depends only partially upon the availability of the Broda Enterprises credit
facility.
20
The Company currently believes that cash flow from its current operations
together with existing cash reserves and available line of credit will be
sufficient to support its working capital requirements for its existing
operations for at least the next 12 months. During the last fiscal year, the
Company's discontinued Arkansas operations were no longer a drain on the
Company's cash resources but were a major contributor to the growing cash
position. However, during the last quarter, the Arkansas operations lost
$243,00 net of applicable tax benefit. If sales decreases continue and costs
do not decline at the same rate, or the discontinued operations again generate
negative cash flows, the Company's cash flow may be impeded. No assurances
can be given as to the sufficiency of the Company's working capital to support
the Company's operations. If the existing cash reserves, cash flow from
operations and debt financing are insufficient or if working capital
requirements are greater than currently estimated, the Company could be
required to raise additional capital. There can be no assurance the Company
will be capable of raising additional capital or that the terms upon which
such capital will be available to the Company will be acceptable. Additional
sources of equity capital are available to the Company through the exercise by
holders of outstanding options. At June 30, 2002, the proceeds which would
have been received by the Company upon exercise of outstanding options which
were exercisable on that date were approximately $2.96 million. There is no
assurance that such options will be exercised.
The Company's material cash commitments at June 30, 2002 include current
liabilities of $6.29 million to be repaid from funds generated from
operations. Current liabilities consist of the following:
JUNE 30, MARCH 31,
2002 2002
---------- ----------
Accounts payable. . . . . . . . . . . . . . . . $1,802,000 $1,649,000
Accrued payroll . . . . . . . . . . . . . . . . 948,000 1,044,000
Accrued warranty expense. . . . . . . . . . . . 407,000 375,000
Reserve for loss at discontinued operations . . 2,308,000 2,534,000
Other accruals. . . . . . . . . . . . . . . . . 824,000 448,000
---------- ----------
Total current liabilities . . . . . . . . . . . $6,290,000 $6,050,000
========== ==========
The Company has also entered into two lease agreements for Broda's production
and office facilities under which it is obligated to pay $16,000 Canadian
(approximately US $10,000) per month through August 2004.
21
During the quarter ended December 31, 2001, the Company invested $250,000
in the form of a note receivable in a startup development company that
designs, manufactures and markets caskets for the death care industry. The
caskets are made of thermoformed ABS, the same process and material used for
making the Company's tables, and give the appearance of polished marble or a
deep laquer finished wood. During the quarter ended June 30, 2002, the
Company invested an additional $250,000 in the form of a note receivable.
Subsequent to the end of the June quarter, the Company invested an additional
$150,000 in the form of a note receivable. After review of the collectability
of the note receivable, the Company decided to fully reserve the $500,000
balance of the note as of June 30, 2002. This resulted in a non-recurring
charge to general and administrative expenses of $500,000 for the quarter.
The Company may, at its discretion, invest an additional $350,000 in notes
receivable in two increments over the next six months. After this investment,
the Company has the option to convert these notes into common stock
representing approximately 51% of the outstanding stock of the startup
development company. In addition, the Company has an option to acquire the
remaining 49% of the outstanding stock.
During the quarter ended March 31, 2002, the Company paid $50,000 as a
good faith deposit in a separate startup development company to investigate
the commercial development of a new technology. If the Company chooses to
close the transaction, the good faith deposit will be converted into 18.9
percent of the equity of the startup development company. The Company has a
further option to purchase an additional 31.1 percent equity for $82,000. If
the Company chooses not to close the transaction, the Company can use the good
faith deposit for the purchase of product from the startup development
company.
On September 24, 2001, the Company announced its intention to repurchase
up to 125,000 shares of the Company's common stock. On February 14, 2002, the
Company announced its intention to repurchase up to an additional 150,000
shares, bringing the total number of shares approved for repurchase to
275,000. As of June 30, 2002, approximately 155,000 shares had been
repurchased. Additional repurchases will reduce the Company's liquidity.
The Company is in the process of developing new products including a new
generation of multipurpose room tables. The Company anticipates additional
research and development expenditures in the next fiscal year, and that if
such product development efforts are successful, capital expenditures of
approximately $6 million may be required over the next 9 to 15 months. The
Company anticipates funding this capital expenditures using existing capital
reserves as well as using cash from operations. However, there is no
assurance that such resources will be sufficient and that the Company will not
need to raise additional capital.
FORWARD-LOOKING STATEMENTS AND FACTORS THAT MAY AFFECT FUTURE RESULTS OF
OPERATIONS
Certain statements made above in this filing that are not historical
facts are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Reform Act"). 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.
22
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, cost
reductions to preserve margins, the planned exit or sale of the discontinued
DO Group and CenterCore operations. 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:
- references to predicted declines in the institutional furniture and U.S.
office furniture markets and the Company's belief that weakness in furniture
demand will continue;
- statements that the Company anticipates that its sales volumes during the
second quarter of fiscal 2003 may be 5 to 10 percent above sales levels of the
second quarter of fiscal 2002;
- references to anticipated continued competitive pressure in multipurpose
room table markets;
- the statement that the Company's healthcare seating operations are less
subject to economic pressures than its multipurpose room furniture operations
but more subject to changes in the regulatory environment;
- statements that the Company believes the exit and sale of the DO Group
and CenterCore businesses will be completed by the end of the third quarter of
fiscal 2003;
- references to the estimated loss to be incurred from the exit or sale of
the DO Group and CenterCore businesses; statements that the
Company believes the purchase of its table and cart manufacturing facility,
corporate headquarters and related real estate will increase its profit margin
by approximately $70,000 per year;
- statements related to the Company's expectation that increased research
and development costs in developing new products will continue during at least
the next fiscal year, and that if such product development efforts are
successful, capital expenditures of approximately $6 million may be required
over the next 9 to 15 months;
- statements relating to the Company's belief that cash flow from its
current operations, existing cash reserves, and available line of credit will
be sufficient to support its working capital requirements to fund existing
operations for at least the next 12 months;
- statements relating to the Company's possible need to raise additional
capital if its cash flow from operations and debt financing are insufficient
to fund the Company's working capital requirements; and
- statements related to anticipated capital expenditures.
23
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 results
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 continued downturn in domestic and international economies and business
conditions specifically in the institutional furniture industry;
- continued global tension related to the events of September 11, 2001 and
U.S. military actions related thereto;
- increased competition in the Company's core businesses;
- the Company's inability for any reason to exit or sell the CenterCore and
DO Group businesses in a timely manner and find buyers for the assets of such
operations on acceptable terms;
- a downturn in the Company's discontinued operations and the Company's
inability to fund losses if they occur in the Company's DO Group and
CenterCore operations;
- loss of important customer contracts through increased price-based and
product quality competition especially in the Company's multipurpose room
furniture segment;
- limited management and key employee resources;
- declines in sales volumes and profit margins in the Company's core
businesses;
- lower than expected revenue, revenue growth, cash flow and gross margins
from the multipurpose room and healthcare seating operations, higher materials
and labor costs, or the Company's inability, for any reason, to profitably
introduce new products or implement its marketing strategies in the healthcare
seating and multipurpose room markets;
- management's inability for any reason to manage effectively the Company's
operations;
- the Company's inability for any reason to develop new products and expand
successfully into new markets;
- the market's acceptance of products currently being developed by the
Company;
- the Company's ability to manufacture and market at current margins high
quality, high performance products at competitive prices;
- import restrictions and economic conditions in the Company's foreign
markets and foreign currency risks associated therewith;
24
- the Company's ability to maintain relatively low cost labor rates;
- the Company's ability to source a sufficient volume of acceptable raw
materials at current prices;
- increased product warranty service costs if warranty claims increase as a
result of the Company's new product introductions or acquisitions or for any
other reason;
- the Company's ability to refine and enhance the quality and productivity
of its manufacturing process;
- the Company's ability to locate and successfully consummate and integrate
acquisitions, if any, of complementary product lines or companies on terms
acceptable to the Company;
- the Company's ability to retain and maintain relationships with key
customers;
- the Company's ability to raise capital, if needed;
- the availability of insurance funding for the Company's healthcare
seating products; and
- regulatory developments that adversely affect demand for the Company's
products, particularly the Company's healthcare seating products.
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 3. 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. The
majority of the Company's sales and expenses are transacted in U.S. dollars
with limited transactions occurring in Canadian dollars or other foreign
currencies. Foreign currency exchange rate fluctuations did not have a
material impact on the financial results of the Company during the quarter
ended June 30, 2002. The Company's healthcare chair operations have
occasionally entered into forward contracts for specific US$ denominated
accounts receivable. As of June 30, 2002, no forward contracts were
outstanding. The economic impact of foreign exchange rate movements on the
Company is complex because such changes are often linked to variability in
real growth, inflation, interest rates, governmental actions and other
factors.
25
PART II: OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None.
(b) Reports on Form 8-K
On May 22, 2002 the Company filed a current report on Form
8-K announcing its financial results for the fourth fiscal
quarter and fiscal year 2002.
On June 25, 2002 the Company filed a current report on Form
8-K announcing management changes.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MITY Enterprises, Inc.
Date: July 31, 2002 /s/ Bradley T Nielson
-------------------------------------
Bradley T Nielson
President and Chief Executive Officer
(Principal Executive Officer)
Date: July 31, 2002 /s/ Paul R. Killpack
-------------------------------------
Paul R. Killpack
Chief Financial Officer
(Principal Financial and Accounting
Officer)