FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
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: 0-23238
DEFLECTA-SHIELD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 42-1411117
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1800 North 9th Street, Indianola, 50125
Iowa (Zip Code)
(Address of principal executive
offices)
(515) 961-6100
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
As of November 13, 1996, 4,800,000 shares of the registrant's
Common Stock were outstanding.
DEFLECTA-SHIELD CORPORATION
INDEX
Page
PART I. Financial Information . . . . . . . . . . . . . . . . . . 3
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Balance Sheets at December 31, 1995 and
September 30, 1996 . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Operations for the Three
Months ended September 30, 1995 and 1996 . . . . . . . . . . . 4
Condensed Consolidated Statements of Operations for the Nine
Months ended September, 1995 and 1996 . . . . . . . . . . . . . 5
Condensed Consolidated Statements of Cash Flows for the Nine
Months ended September 30, 1995 and 1996 . . . . . . . . . . . 6
Notes to Condensed Consolidated Financial Statements . . . . . 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . 8
PART II. Other Information
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . 14
Item 5. Other Information . . . . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . 14
2
DEFLECTA-SHIELD CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
December 31, September 30,
1995 1996
---- ----
(Unaudited)
ASSETS
-------
Current assets:
Cash . . . . . . . . . . . . . . $ 533 $486
Accounts receivable, less
allowance for doubtful
accounts of $623 and
$800, respectively . . . . . . . 9,708 10,314
Inventories . . . . . . . . . . . 10,580 10,184
Deferred income taxes . . . . . . 1,635 1,635
Prepaid expenses . . . . . . . . 912 164
------- -------
Total current assets . . . . 23,368 22,783
Property and equipment, net . . . . 9,344 9,268
Intangible assets . . . . . . . . . 12,601 12,229
Other assets . . . . . . . . . . . 97 93
------- -------
$45,410 $44,373
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-term
debt . . . . . . . . . . . . . $1,523 $ 81
Accounts payable . . . . . . . . 4,233 4,883
Accrued expenses . . . . . . . . 2,423 2,722
------- -------
Total current liabilities . 8,179 7,686
Deferred taxes . . . . . . . . . . 275 275
Long-term debt, less current maturities 12,345 8,877
Stockholders' equity (Note 2):
Common stock . . . . . . . . . . 48 48
Additional paid-in capital . . . 18,556 18,556
Retained earnings . . . . . . . . 6,007 8,931
------- -------
Total stockholders equity . 24,611 27,535
------- -------
$45,410 $44,373
======= =======
The accompanying notes are an integral part of these statements.
3
DEFLECTA-SHIELD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Three Months Ended September 30,
1995 1996
Net sales . . . . . . . . . . . . . $16,007 $18,465
Cost of sales . . . . . . . . . . . 11,167 12,035
------- -------
Gross profit . . . . . . . . . . . 4,840 6,430
Operating expenses:
Selling . . . . . . . . . . . . . 2,552 2,386
General and administrative . . . 1,593 1,707
Amortization of other assets . . 131 113
------- -------
Income from operations . . . . . . 564 2,224
Interest expense . . . . . . . . . 407 250
------- -------
Income before income taxes . . . . 157 1,974
Income tax expense . . . . . . . . 61 729
------- -------
Net income . . . . . . . . . . . . $ 96 $ 1,245
======= ========
Net income per share . . . . . . . $ .02 $ 26
======= ========
Weighted average common
shares outstanding . . . . . . . . 4,800 4,800
The accompanying notes are an integral part of these statements.
4
DEFLECTA-SHIELD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amounts)
Nine Months Ended
September 30,
1995 1996
---- ----
Net sales . . . . . . . . . . . . . . . $52,704 $54,743
Cost of sales . . . . . . . . . . . . . 34,733 36,185
------- -------
Gross profit . . . . . . . . . . . . . 17,971 18,558
Operating expenses:
Selling . . . . . . . . . . . . . . . 8,063 7,681
General and administrative . . . . . 4,864 5,066
Amortization of other assets . . . . 357 372
------- -------
Income from operations . . . . . . . . 4,687 5,439
. . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . 1,059 799
------- -------
Income before income taxes . . . . . . 3,628 4,640
Income tax expense . . . . . . . . . . 1,415 1,716
------- -------
Net income . . . . . . . . . . . . . . $2,213 $2,924
======= =======
Net income per share . . . . . . . . . $ .46 $ .61
======= =======
Weighted average common
shares outstanding . . . . . . . . . . 4,800 4,800
The accompanying notes are an integral part of these statements.
5
DEFLECTA-SHIELD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1995 1996
---- ----
Cash flow from operating activities:
Net income . . . . . . . . . . . . . . $ 2,213 $2,924
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation . . . . . . . . . . . 1,085 1,471
Amortization of other assets . . . 357 372
Change in deferred tax liability 395 -
Add (deduct) changes in assets and
liabilities:
Accounts receivable . . . . . . 942 (606)
Inventories . . . . . . . . . . (3,515) 396
Prepaid expenses . . . . . . . (658) 748
Other Assets . . . . . . . . . (436) 4
Accounts payable . . . . . . . (1,138) 650
Accrued expenses . . . . . . . (277) 299
------- -------
Net cash (used) provided by operating
activities . . . . . . . . . . . . . . . (1,032) 6,258
------- -------
Cash flows from investing activities:
Purchases of property and equipment . . (3,731) (1,395)
------- -------
Cash used by investing activities . . . (3,731) (1,395)
------- -------
Cash flows from financing activities: . .
Net proceeds (repayment) on line of credit 5,636 (3,461)
Repayment of debt . . . . . . . . . . . (1,059) (1,449)
------- -------
Net cash provided (used) by
financing activities . . . . . . . . . . 4,577 (4,910)
------- -------
Net decrease in cash . . . . . . . . . . (186) (47)
Cash at beginning of period . . . . . . . 747 533
------- -------
Cash at end of period . . . . . . . . . . $ 561 $ 486
======= =======
Cash paid during the period for interest $ 1,050 $ 815
Cash paid during the period for income taxes $ 2,237 $1,263
The accompanying notes are an integral part of this statement.
6
DEFLECTA-SHIELD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited consolidated financial statements of
Deflecta-Shield Corporation and its subsidiaries (collectively, the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information. In the
opinion of management, all adjustments (which were of a normal
recurring nature) considered necessary for a fair presentation have
been included. Operating results for the three and nine months ended
September 30, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-
K for the fiscal year ended December 31, 1995.
NOTE 2 - CHANGES IN STOCKHOLDERS' EQUITY (in thousands)
Additional
Common Paid-In Retained
Stock Capital Earnings
------- ------- --------
Balance at December 31, 1995 . . $ 48 $18,556 $6,007
Net income for the nine months
ended September 30, 1996 . . . -- -- 2,924
------- ------- -------
Balance at September 30, 1996 . $ 48 $18,556 $8,931
======= ======= =======
7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition
and results of operations should be read in conjunction with the
condensed consolidated financial statements included elsewhere herein
and in conjunction with the Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the
Company's Annual Report on Form 10-K for the Fiscal Year ended
December 31, 1995.
Results of Operations
The following tables set forth, for the periods indicated, certain
operating data as a percentage of net sales and the percentage change
in the dollar amounts of such items compared to the prior period.
Percentage of Net Sales Percentage
Increase (Decrease)
Three Months Ended Three Months Ended
September 30, September 30,
1996 over
1995 1996 1995
---- ---- ----
Net sales . . . . . . . . 100.0% 100.0% 15.4%
Cost of sales . . . . . . 69.8 65.2 7.8
----- ----- -----
Gross profit . . . . . . 30.2 34.8 32.9
Selling expenses . . . . 15.9 12.9 (6.5)
General and administrative
expenses . . . . . . . . 10.0 9.3 7.2
Amortization of other
assets . . . . . . . . . .8 .6 (13.7)
----- -----
Income from operations . 3.5 12.0 294.3
Interest expense . . . . 2.5 1.3 (38.6)
----- -----
Income before income
taxes . . . . . . . . . . 1.0% 10.7% 1,157.3
===== =====
Percentage of Net Sales Percentage
Increase (Decrease)
Nine Months Ended Nine Months Ended
September 30, September 30,
1996 over
1995 1996 1995
---- ---- ----
Net sales . . . . . . . . 100.0% 100.0% 3.9%
Cost of sales . . . . . . 65.9 66.1 4.2
------ ------
Gross profit . . . . . . 34.1 33.9 3.3
Selling expenses . . . . 15.3 14.0 (4.7)
General and administrative
expenses . . . . . . . . 9.2 9.3 4.2
Amortization of other
assets . . . . . . . . . .7 .7 4.2
------ ------
Income from operations . 8.9 9.9 16.0
Interest expense . . . . 2.0 1.4 (24.6)
------ ------
Income before income
taxes . . . . . . . . . . 6.9% 8.5% 27.9
====== ====== ======
8
Three Months ended September 30, 1996 Compared to Three Months Ended
September 30, 1995
Net Sales. Net sales were $18,465,000 for the three months ended
September 30, 1996, compared to $16,007,000 for the three months
ended September 30, 1995, an increase of $2,458,000, or 15.4%. Net
sales of light truck products increased by $2,192,000 and net sales
of heavy truck products increased by $266,000. Net sales of Delta
III products increased by $289,000 in the three months ended
September 30, 1996, as compared to the three months ended September
30, 1995. The remainder of the change in net sales of light truck
products, a net increase of $1,903,000, was primarily attributable to
bug deflectors and running board products.
Gross Profit. Gross profit was $6,430,000 for the three months ended
September 30, 1996, compared to $4,840,000 for the three months ended
September 30, 1995, an increase of $1,590,000, or 32.9%. The increase
in gross profit was primarily attributable to an increase in
manufacturing efficiency and an increase in the average sale price of
some light truck products. As a percentage of net sales, gross
profit increased to 34.8% for the three months ended September 30,
1996, compared to 30.2% for the three months ended September 30,
1995, an increase of 4.6% of net sales. This increase in gross
profit percentage was primarily attributable to increased sales of
light truck products.
Selling Expenses. Selling expenses were $2,386,000 for the three
months ended September 30, 1996, compared to $2,552,000 for the three
months ended September 30, 1995, a decrease of $166,000, or 6.5%. As
a percentage of net sales, selling expense decreased to 12.9% for the
three months ended September 30, 1996, from 15.9% for the three
months ended September 30, 1995. This decrease of 3.0% of net sales
was primarily attributable to a decrease in variable selling expenses
of 2.1% of net sales for the three months ended September 30, 1996,
compared to the three months ended September 30, 1995. The remaining
change in selling expenses, a decrease of 0.9% of net sales was
primarily attributable to a decrease in advertising expense.
General and Administrative Expenses. General and administrative
expenses were $1,707,000 for the three months ended September 30,
1996, compared to $1,593,000 for the three months ended September 30,
1995, an increase of $114,000, or 7.2%. This increase was primarily
attributable to an increase in product development expense of
$125,000 for the three months ended September 30, 1996, compared to
the three months ended September 30, 1995. As a percentage of net
sales, general and administrative expense decreased to 9.3% for the
three months ended September 30, 1996, from 10.0% for the three
months ended September 30, 1995.
Interest Expense. Interest expense was $250,000 for the three
months ended September 30, 1996, compared to $407,000 for the three
months ended September 30, 1995, a decrease of $157,000, or 38.6%.
Interest bearing debt averaged approximately $9,269,000 for the three
months ended September 30, 1996, compared to approximately
$17,422,000 for the three months ended September 30, 1995.
9
Nine Months ended September 30, 1996 Compared to Nine Months Ended
September 30, 1995
Net Sales. Net sales were $54,743,000 for the nine months ended
September 30, 1996, compared to $52,704,000 for the nine months ended
September 30, 1995, an increase of $2,039,000, or 3.9%. Net sales of
light truck products increased by $2,862,000 and net sales of heavy
truck products decreased by $823,000. The increase in net sales of
light truck products was attributable to sales increases of $985,000
in Delta III products, $467,000 in Trailmaster products, and $466,000
in Fibernetics products. The remainder of the change in net sales of
light truck products, an increase of $944,000, was primarily
attributable to bug deflector products. Sales of heavy truck
products in the nine months ended September 30, 1996 were affected by
lower sales of new heavy trucks during the first six months of 1996
which adversely affected demand for the Company's heavy truck
products.
Gross Profit. Gross profit was $18,558,000 for the nine months
ended September 30, 1996, compared to $17,971,000 for the nine months
ended September 30, 1995, an increase of $587,000, or 3.3%. The
increase in gross profit was primarily attributable to an increase in
manufacturing efficiency and an increase in the average sale price of
some light truck products, offset by cost increases in raw materials,
the incurrence of additional overhead to accommodate planned business
consolidations, and the decrease in heavy truck product sales. As a
percentage of net sales, gross profit decreased to 33.9% for the nine
months ended September 30, 1996, compared to 34.1% for the nine
months ended September 30, 1995, a decrease of 0.2% of net sales.
This decrease in gross profit percentage was primarily attributable
to decreased sales of heavy truck products, offset in part by an
increase in gross profit on sales of light truck products.
Selling Expenses. Selling expenses were $7,681,000 for the nine
months ended September 30, 1996, compared to $8,063,000 for the nine
months ended September 30, 1995, a decrease of $382,000, or 4.7%. As
a percentage of net sales, selling expense decreased to 14.0% for the
nine months ended September 30, 1996, from 15.3% for the nine months
ended September 30, 1995. This decrease of 1.3% of net sales was
primarily attributable to a decrease in variable selling expenses of
1.6% of net sales for the nine months ended September 30, 1996
compared to the nine months ended September 30, 1995, and a decrease
in sales personnel expense (compensation and associated costs,
including travel, decreased as a percentage of net sales by 0.4% for
the nine months ended September 30, 1996, compared to the nine months
ended September 30, 1995). The remaining change in selling expenses,
an increase of 0.7% of net sales, was primarily attributable to an
increase in advertising expense and an increase in bad debts expense.
General and Administrative Expenses. General and administrative
expenses were $5,066,000 for the nine months ended September 30,
1996, compared to $4,864,000 for the nine months ended September 30,
1995, an increase of $202,000, or 4.2%. As a percentage of net
sales, general and administrative expenses increased to 9.3% for the
nine months ended September 30, 1996, from 9.2% for the nine months
ended September 30, 1995. This increase of 0.1% of net sales was
primarily attributable to an increase of 0.8% of net sales for
product development expense. The remaining change in general and
administrative expenses, a decrease of 0.7% of net sales, was
primarily attributable to a decrease of general and administrative
wages and associated costs, including travel.
10
Interest Expense. Interest expense was $799,000 for the nine
months ended September 30, 1996, compared to $1,059,000 for the nine
months ended September 30, 1995, a decrease of $260,000, or 24.6%.
Interest bearing debt averaged approximately $11,221,000 for the nine
months ended September 30, 1996, compared to approximately
$15,367,000 for the nine months ended September 30, 1995.
Seasonality and Quarterly Data
Although the Company deviated from the pattern in 1995, it has
historically generated the majority of its net sales and income from
operations in the second and third quarters of each year. The
Company expects results to move toward the historical pattern in 1996
and future years. This seasonal pattern combined with effects of new
product introductions and the timing of customer orders can cause the
Company s results of operations to vary from quarter to quarter.
Liquidity and Capital Resources
The Company's primary sources of working capital are cash flow
from operations and borrowings by the Company under its credit
facility. As of September 30, 1996, the Company had cash balances of
approximately $486,000 and working capital of approximately
$15,097,000.
Net cash provided (used) by operating activities was approximately
$6,258,000 and ($1,032,000) for the nine months ended September 30,
1996, and September 30, 1995, respectively.
The Company's capital expenditures totaled approximately
$1,395,000 and $3,731,000 for the nine months ended September 30,
1996, and September 30, 1995, respectively.
In August 1994, the Company initiated the construction of a new
distribution facility in Indianola, Iowa. Total capital expenditures
of the Company associated with the Indianola, Iowa facility,
including computer hardware and software, were $3.7 million, with
approximately $1.6 million expended in 1994 and approximately $2.1
million expended in 1995. Phase I of the facility was operational in
early January, 1995. Phase II of the facility, an expansion of
approximately 60,000 square feet was completed and occupied in July
1995. The costs incurred in the fourth quarter of 1994 and in the
first six months of 1995 in connection with this project, primarily
consisting of costs and expenses associated with acquiring and
training the initial workforce for the Indianola facility, were
expensed as these costs were incurred. The Company is currently
studying the appropriate means of consolidating portions of its
manufacturing and distribution facilities. The locations into which
various activities would be consolidated have not been determined.
The Company anticipates that costs and expenses associated with any
relocation and consolidation of the Company s distribution and
manufacturing functions would be substantially offset by cost savings
generated through such relocation and consolidation. The timing of
the incurrence of such charges in relation to the generation of such
savings may cause the Company's results of operations to vary from
quarter to quarter.
On July 21, 1994, the Company entered in to a $24 million
Revolving Credit and Acquisition Facility (the "Credit Agreement")
with Heller Financial, Inc. (the "Lender"), pursuant to which the
Lender is providing Deflecta-Shield with a $6.0 million revolving
credit facility (the "Revolver") and an $18.0 million acquisition
facility (the "Acquisition Facility"). Approximately $2 million of
the Revolver was used to finance the purchase of the assets of
11
Trailmaster Products, Inc., with the balance of the purchase price
paid with cash generated from operations of Deflecta-Shield's
subsidiaries. Approximately $5.8 million of the Acquisition Facility
was used to finance the purchase of Delta III, Inc., with the balance
of the purchase price paid with a note made by the acquired
subsidiary for approximately $1.5 million. Deflecta-Shield's
obligations under the Credit Agreement are guaranteed by its direct
and indirect wholly owned subsidiaries. Some of these guarantees are
secured by the assets of certain subsidiaries. Availability under
the Acquisition Facility is subject to the sole and absolute
discretion of the Lender. It is anticipated that future acquisitions
by Deflecta-Shield and its subsidiaries will be funded primarily
through the Acquisition Facility. No such acquisitions are currently
contemplated.
The Credit Agreement provides for the revolving credit and
acquisition loans up to the amount of the respective commitments
until July 21, 1999. Under the terms of the Credit Agreement,
Deflecta-Shield paid a closing fee of $60,000, and is obligated to
pay a fee of .5% per annum of the unused Revolver and .2% per annum
of the unused portion of the Acquisition Facility during the term of
the Credit Agreement. The Revolver is limited by levels of inventory
and receivables which, together with other assets, secure the
borrowings under the Credit Agreement. Interest on all loans under
the Credit Agreement is payable at varying rates, ranging from the
Lender's base rate (the "Base Rate") plus .5% for loans under the
Revolver, to a maximum of the Base Rate plus 2% for the final $6
million drawn under the Acquisition Facility.
The Credit Agreement contains certain covenants covering Deflecta-
Shield and its subsidiaries on a consolidated basis, including,
without limitation, covenants relating to the maximum amount of
indebtedness which the entities may incur and limitations on capital
expenditures and payment of dividends by Deflecta-Shield.
As of September 30, 1996, the outstanding principal balance,
together with accrued interest, under the credit facility was
approximately $8,934,000. During 1995, the Lender agreed to make
$3,000,000 of the Acquisition Facility available on a revolving
basis. At September 30, 1996, the aggregate amount available under
the revolving credit facility and the revolving portion of the
acquisition facility was approximately $66,000. The Company believes
that cash flow from operations and available borrowings under the
credit facility are adequate to meet the Company's liquidity needs
for the next 12 months.
In the ordinary course of business, the Company is subject to
examination by the Internal Revenue Service (the IRS ). In October
1993, the IRS initiated an examination of the 1990 Federal income tax
return of DFM Corp. The examination was subsequently expanded to
include the 1991 and 1992 Federal income tax returns. As of
September 1996, the examination has been substantially completed, and
the Company anticipates settlement of all matters in connection with
this examination for a total assessment of between $245,000 and
$300,000 in additional Federal income tax for the periods examined.
The Company believes that it has made adequate provisions for the
additional assessment of taxes.
12
Forward Looking Information
Information included in this Report on Form 10-Q relating to sales
and earnings expectations constitutes forward-looking statements that
involve a number of risks and uncertainties. From time to time,
information provided by the Company or statements made by its
employees may contain other forward-looking statements. Factors that
could cause actual results to differ materially from the forward-
looking statements include but are not limited to: general economic
conditions, including their impact on the sale of new light trucks;
sales of new heavy trucks, which are cyclical; competitive factors,
including pricing pressures; changes in product and sales mix; the
timely development and introduction of competitive new products by
the Company and market acceptance of those products; inventory risks
due to changes in market demand or the Company's business strategies;
difficulties which may be encountered in the consolidation of the
Company's manufacturing and distribution facilities; changes in
effective tax rates; and the fact that a substantial portion of the
Company's sales are generated from orders received during the
quarter, making prediction of quarterly revenues and earnings
difficult. The words believe, expect, anticipate, project,
and similar expressions identify froward looking statements. Readers
are cautioned not to place undue reliance on these forward looking
statements, which speak only as of the date made. The Company
undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future
events or otherwise.
13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company's insurer has, along with the other defendants to the
suit, reached a settlement in the case of Emitee v. Toyota, et al.
Pursuant to the settlement, the Company's insurer will contribute
$30,000 to a global settlement of the claim.
The Company's Trailmaster subsidiary has been named a defendant in
Nyilos v. Trailmaster Products Inc., et al., a breach of warranty and
negligence lawsuit pending in Macomb County, Michigan. The suit arises
out of a rollover accident which occurred on October 1, 1994. The
complaint alleges that Trailmaster had made and breached certain
warranties and that it was negligent and claims unspecified damages in
excess of $10,000. This case is at a very early stage and the ultimate
outcome cannot yet be determined.
Item 5. Other Information
Ronald C. Fox was hired as Chief Financial Officer of the Company
effective October 28, 1996.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.(iii)(A)(1) Amended and Restated Deflecta-Shield
Corporation 1993 Stock Plan.
Exhibit 10.(iii)(A)(1)(a) Amended and Restated Deflecta-Shield
Corporation 1996 Stock Plan.
Exhibit 10.(iii)(A)(7) Employment Letter Agreement dated October
28, 1996 between the Company and Ronald C.
Fox.
Exhibit 27. Financial Data Schedule.
(b) Reports on Form 8-K
None during the fiscal quarter ended September 30, 1996.
14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Date: November 13, 1996
DEFLECTA-SHIELD CORPORATION
By: /s/ RONALD C. FOX
--------------------
Ronald C. Fox,
Chief Financial Officer
(Duly authorized officer
and Principal Financial
and Accounting Officer)
15