UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
FILED FEB. 24 1999 U.S. BANKRUPTCY COURT
CASE NAME: Knight Equipment & Manufacturing Corp. Petition Date: 08/27/1998
CASE NUMBER: 98-54130RBK
MONTHLY OPERATING REPORT SUMMARY FOR MONTH: DECEMBER YEAR 1998
MONTH SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY
98 98 98 98 99
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REVENUES (MOR-6) 196,843 245,332 256,366 41,255 132,164
INCOME BEFORE INT, DEPREC./ TAX (MOR-6) 66,557 100,577 103,563 (51,042) 27,520
NET INCOME (LOSS) (MOR-6) 43,650 81,704 84,152 (67,895) 7,736
PAYMENTS TO INSIDERS (MOR-9) 27,012 33,139 25,266 30,638 24,511
PAYMENTS TO PROFESSIONALS (MOR-9) 0 7,550 5,000 0 0
------- ------- ------- ------- -------
TOTAL DISBURSEMENTS (MOR-8) 215,921 155,400 477,086 145,135 86,048
======= ======= ======= ======= =======
*** The original of this document must be filed with the United States
Bankruptcy Court and a copy must be sent to the United States Trustees***
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REQUIRED INSURANCE MAINTAINED
AS OF SIGNATURE DATE
EXP.
DATE
----
CASUALTY YES (X) NO ( ) 8-28-99
LIABILITY YES (X) NO ( ) 8-28-99
VEHICLE YES (X) NO ( ) 8-28-99
WORKER'S YES (X) NO ( ) 8-28-99
- --------------------------------------------------------------------------------
CIRCLE ONE
Are all accounts receivable being collected within terms? Yes (No)
Are all post-petition liabilities, including taxes, being paid within terms?
(Yes) No
Have any pre-petition liabilities been paid? (Yes) No If so, describe:
NOTES PAYABLE FOR FIXED ASSETS (CRANES, FORKLIFT, TRUCK & BACKHOE) &
PAYROLL TAXES.
Are all funds received being deposited into DIP bank accounts? (Yes) No
Were any assets disposed of outside the normal course of business? Yes (No)
If so, describe ________________________________________________________
Are all U.S. Trustee Quarterly Fee Payments current? (Yes) No
What is the status of your Plan of Reorganization? Debtor has not yet filed a
plan but is in preliminary negotiations with various secured parties.
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ATTORNEY NAME: Deborah D. Williamson
FIRM: Cox & Smith, Incorporated
ADDRESS: 112 East Pecan
ADDRESS: Suite 1800
CITY, STATE ZIP: San Antonio, Texas 78205
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I certify under penalty of perjury that the following complete Monthly Operating
Report (MOR), consisting of MOR-1 through MOR-9 plus attachments, is true and
correct.
SIGNED: /s/ Scott S. Kalish
-------------------------------------
(ORIGINAL SIGNATURE)
TITLE: Treasurer
-------------------------------------
MOR-1 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
COMPARATIVE BALANCE SHEETS
FILING DATE* MONTH MONTH MONTH MONTH MONTH MONTH
08/27/98 SEPTEMBER 98 OCTOBER 98 NOVEMBER 98 DECEMBER 98 JANUARY 99
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash 94,343* 117,241 125,011 195,207 103,342 100,821
Accounts Receivable, Net 1,554,340 1,606,827 1,629,115 1,625,951 1,617,606 1,615,627
Inventory: Lower of Cost or Market 6,997,595 6,992,595 6,982,595 6,962,595 6,957,595 6,952,595
Prepaid Expenses 24,580 165,108 157,657 121,928 121,928 66,983
Investments
Other
---------- ---------- ---------- ---------- ---------- -----------
TOTAL CURRENT ASSETS 8,670,858 8,881,771 8,894,378 8,905,681 8,500,471 8,736,026
---------- ---------- ---------- ---------- ---------- -----------
PROPERTY, PLANT & EQUIP, @ COST 1,528,769** 1,534,072 1,534,072 1,534,072 1,534,072 1,534,072
Less Accumulated Depreciation 389,201 400,053 410,905 421,757 432,609 443,461
NET BOOK VALUE OF PP & E 1,139,568 1,134,019 1,123,167 1,112,315 1,101,463 1,090,611
OTHER ASSETS:
1. Tax Deposits - DEFERRED
CREDIT 64,044 64,044 64,044 64,044 64,044 64,044
2. Investments in Subs
3. Bond Issuance Cost; Net 113,858 113,588 113,588 113,588 113,588 113,588
4. Perry Gas Processor Files 35,000 35,000 35,000 35,000 35,000 35,000
---------- ---------- ---------- ---------- ---------- -----------
TOTAL ASSETS 10,023,328 10,228,422 10,230,177 10,230,628 10,144,566 10,039,269
========== ========== ========== ========== \ ========== ===========
* Per Schedules and Statement of Affairs
* ACTUAL CASH BALANCE ON 8/27/98, ALL OTHER INFORMATION REFLECTS 8/31/98
ENDING BALANCES, SINCE NO ADDITIONAL SIGNIFICANT ACTIVITIES WERE COMMENCED
UNTIL AFTER SEPTEMBER 1ST.
** SCHEDULES SHOW PROPERTY, PLANTS & EQUIPMENT AT MARKET VALUE; WE HAVE
CONVERTED TO COST FOR REPORTING PURPOSES TO THE U.S. TRUSTEE.
MOR-2 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
COMPARATIVE BALANCE SHEETS
FILING DATE* MONTH MONTH MONTH MONTH MONTH
08/27/98 SEPTEMBER 98 0CTOBER 98 NOVEMBER 98 DECEMBER 98 JANUARY 99
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LIABILITIES & OWNERS EQUITY
LIABILITIES:
POST-PETITION LIABILITIES (MOR-4) 324,543 398,957 453,352 432,928 455,392
PRE-PETITION LABILITIES:
Notes Payable-Secured 2,755,328 2,750,590 2,736,099 2,724,453 2,716,923 2,710,957
Priority Debt 713,771 695,183 695,183 695,085 695,085 695,085
Federal Income Tax
FICA/Withholding 6,643 851 0 0 0 0
Unsecured Debt 6,198,744 6,064,866 5,925,845 5,799,616* 5,779,403 5,679,872
Other 2,436,612 2,436,509 2,436,509 2,436,386 2,436,386 2,436,386
---------- ---------- ---------- ---------- ---------- ----------
TOTAL PRE-PETITION LIABILITIES 12,111,098 11,947,999 11,793,636 11,655,540 11,627,797 11,522,300
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES 12,111,098 12,272,542 12,192,593 12,108,892 12,060,725 11,977,692
---------- ---------- ---------- ---------- ---------- ----------
OWNERS'S EQUITY (DEFICIT):
PREFERRED STOCK
COMMON STOCK 1,111 1,111 1,111 1,111 1,111 1,111
ADDITIONAL PAID-IN CAPITAL 356,210 356,210 356,210 356,210 356,210 356,210
RETAINED EARNINGS: Filing Date (2,445,091) (2,445,091) (2,445,091) (2,445,091) (2,445,091) (2,445,091)
RETAINED EARNINGS: Post Filing Date 0 43,650 125,354 209,506 141,611 149,347
---------- ---------- ---------- ---------- ---------- ----------
TOTAL OWNER'S EQUITY (NET WORTH) (2,087,770) (2,044,120) (1,962,416) (1,878,264) (1,946,159) (1,938,423)
---------- ---------- ---------- ---------- ---------- ----------
TOTAL LIABILITIES & OWNER'S EQUITY 10,023,328 10,228,422 10,230,177 10,230,628 10,114,566 10,039,269
========== ========== ========== ========== ========== ==========
* Per Schedules and Statement of Affairs
* THE REDUCTION IN UNSECURED DEBT RESULTED FROM A REDUCTION OF $105,429 IN
UNEARNED REVENUE FROM A BALANCE OF $255,173 AT 10/31/98 TO $119,744 AT 11/30/98.
THE UNEARNED REVENUE REPRESENTS THE PORTION OF A PREPAID CONTRACT, WHICH THE
COMPANY IS CURRENTLY WORKING ON, THAT HAS NOT BEEN EARNED BASED ON CONSTRUCTION
IN PROGRESS ACCOUNTING CALCULATIONS, A COPY OF WHICH HAS BEEN ATTACHED.
MOR-3 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
SCHEDULE OF POST-PETITION LIABILITIES
MONTH MONTH MONTH MONTH MONTH
SEPTEMBER 98 OCTOBER 98 NOVEMBER 98 DECEMBER 98 JANUARY 99
- ---------------------------------------------------------------------------------------------------
TRADE ACCOUNTS PAYABLES 15,856 52,791 43,025 33,453 34,640
TAX PAYABLE:
Federal Payroll Taxes 7,770 2,553 4,501 4,216 3,270
State Payroll & Sales 244 462 232 617 1,644
Ad Valorem Taxes 245 245 359 359 359
Other Taxes
TOTAL TAXES PAYABLE 8,259 3,260 5,092 5,192 5,273
SECURED DEBT POST-PETITION 201,600 275,589 340,000 340,000 340,000
ACCRUED INTEREST PAYABLE 1,383 3,991 931 3,764 18,276
*ACCRUED PROFESSIONAL FEES: 0 0 0 0 0
OTHER ACCRUED LIABILITIES:
1. INTEREST & PENALTIES
ON PRE-PETITION TAXES 2,525 2,525 2,313 2,313 2,313
2. PAYROLL COSTS (NET OF
TAXES) 25,057 14,306 16,496 13,317 8,395
3. NOTE PAYABLE FOR FINANCED
INSURANCE 69,863 46,495 46,495 34,889 46,495
------- ------- ------- ------- -------
TOTAL POST-PETITION LIABILITIES
(MOR-3) 324,543 398,957 453,352 432,928 455,392
======= ======= ======= ======= =======
* Payment Requires Court Approval
MOR-4 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
AGING OF POST-PETITION LIABILITIES
MONTH JANUARY 99
TRADE AD-VALOREM,
DAYS TOTAL ACCTS FED TAXES STATE TAXES OTHER TAXES OTHER
- --------------------------------------------------------------------------------
0-30 26,452 3,164 3,270 1,644 0 18,374
31-60 30,375 23,009 0 0 114 7,366
61-90 344,911 3,866 0 0 0 340,931
91+ 53,654 4,601 245 48,808
------- ------ ----- ----- --- -------
TOTAL 455,392 36,640 3,270 1,644 359 415,479
======= ====== ===== ===== === =======
AGING OF ACCOUNTS RECEIVABLE
MONTH SEPTEMBER 98 OCTOBER 98 NOVEMBER 98 DECEMBER 98 DECEMBER 98
- --------------------------------------------------------------------------------
0-30 DAYS 52,487 22,563 31,000 716 9,176
31-60 DAYS 2,312 52,112 17,000 5,500 4,216
61-90 DAYS 14,895 5,812 48,612 20,500 2,000
91+ DAYS 1,546,636 1,558,031 1,556,842 1,590,890 1,602,233
--------- --------- --------- --------- ---------
TOTAL 1,616,330 1,638,518 1,653,455 1,617,606 1,615,627
========= ========= ========= ========= =========
* THE $10,721 TRADE ACCOUNTS PAYABLE OVER 61 DAYS OF DECEMBER 31, 1998 ARE
INVOICES FOR RENTALS OF LAND (STORAGE AND WORK YARDS) OFFICE EQUIPMENT
(COPIERS) AND AUTOMOBILES (WHICH WERE SUBSEQUENTLY RETURNED).
MOR-5 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
STATEMENT OF INCOME (LOSS)
MONTH SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FILING TO
98 98 98 98 99 DATE
- --------------------------------------------------------------------------------------------------------
REVENUES (MOR-1) 196,843 245,332 256,366 41,255 132,164 871,960
TOTAL COST OF REVENUES 67,321 87,565 101,919 48,868 61,241 364,914
------- ------- ------- ------- ------- -------
GROSS PROFIT 129,522 157,767 154,447 (5,613) 70,923 507,046
======= ======= ======= ======= ======= =======
OPERATING EXPENSES:
Selling & Marketing 0 0 0 0 0 0
General & Administrative 35,942 16,501 20,618 14,791 18,892 106,744
Insiders Compensation 27,012 33,139 25,266 30,638 24,511 140,566
Professional Fees 11 7,550 5,000 0 0 12,561
Other (attach list) 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
TOTAL OPERATING EXPENSES 62,965 57,190 50,884 45,429 43,403 259,871
======= ======= ======= ======= ======= =======
INCOME BEFORE INT, DEPR/TAX (MOR-1) 66,557 100,577 103,563 (51,042) 27,520 247,175
INTEREST EXPENSE 12,055 8,021 8,559 6,001 11,297 45,933
DEPRECIATION 10,852 10,852 10,852 10,852 10,852 54,260
OTHER (INCOME) EXPENSES* 0 0 0 0 (2,365)* (2,365)*
OTHER ITEMS** 0 0 0 0 0 0
TOTAL INT, DEPR & OTHER ITEMS 22,907 18,873 19,411 16,853 19,784 97,828
------- ------- ------- ------- ------- -------
NET INCOME BEFORE TAXES 43,650 81,704 84,152 (67,895) 7,736 149,347
FEDERAL INCOME TAXES 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
NET INCOME (LOSS) (MOR-1) 43,650 81,704 84,152 (67,895) 7,736 149,347
======= ======= ======= ======= ======= =======
Accrual Accounting Required, Otherwise Footnote with Explanation.
* Footnote Mandatory
** Unusual and/or infrequent item(s) outside the ordinary course of business;
requires footnote
MOR-6 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
MONTH MONTH MONTH MONTH MONTH FILING TO
SEPTEMBER 98 OCTOBER 98 NOVEMBER 98 DECEMBER 98 JANUARY 99 DATE
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CASH RECEIPTS AND
DISBURSEMENTS
1. CASH - BEGINNING OF MONTH 94,343 117,241 125,011 195,207 103,342 94,343
======= ======= ======= ======= ======= =======
RECEIPTS:
2. CASH SALES 27,953 86,506 139,012 15,762 28,412 269,253
3. COLLECTION OF ACCOUNTS RECEIVABLE 16,063 37,466 7,000 53,551
4. LOANS & ADVANCES (attach list) 201,600 73,389 340,000 0 0 615,589
5. SALE OF ASSETS
6. OTHER (attach list) 9,266 2,675 22,207* 0 48,115 34,148
------- ------- ------- ------- ------- -------
TOTAL RECEIPTS** 238,819 163,170 517,282 53,270 83,527 972,541
======= ======= ======= ======= ======= =======
(Withdrawal) Contribution by Individual
Debtor MFR-2*
DISBURSEMENTS:
7. NET PAYROLL 88,038 71,850 68,290 60,104 57,410 308,282
8. PAYROLL TAXES PAID 25,079 23,605 19,039 21,415 18,491 89,138
9. SALES,USE & OTHER TAXES PAID 1,060 99 511 84 0 3,754
10. SECURED / RENTAL / LEASES 16,011 4,582 12,851 14,481 0 47,925
11. UTILITIES 12,265 5,905 4,487 3,107 3,905 25,764
12. INSURANCE 60,890 17,185 17,170 16,916 0 112,161
13. INVENTORY PURCHASES
14. VEHICLE EXPENSES 2,346 300 900 800 0 4,146
15. TRAVEL & ENTERTAINMENT 4,023 2,853 997 2,339 0 10,212
16. REPAIRS, MAINTENANCE & SUPPLIES 3,160 27,521 11,623 6,089 2,722 48,393
17. ADMINISTRATIVE & SELLING 3,049 0 0 0 20 3,049
18. OTHER (attach list) 0 0 306,218** 0 0 306,218
------- ------- ------- ------- ------- -------
TOTAL DISBURSEMENTS FROM OPERATIONS 215,921 153,900 442,086 145,135 82,548 957,042
======= ======= ======= ======= ======= =======
19. PROFESSIONAL FEES 0 0 5,000 0 0 5,000
20. U.S. TRUSTEE FEES 0 1,500 0 0 3,500 1,500
21. OTHER REORGANIZATION EXPENSES (ATTACH LIST) 0 0 0 0 0 0
------- ------- ------- ------- ------- -------
TOTAL DISBURSEMENTS** 215,921 155,400 447,086 145,135 86,046 933,542
======= ======= ======= ======= ======= =======
22. NET CASH FLOW 22,898 7,770 70,196 (91,885) (2,521) 8,999
23. CASH - END OF MONTH (MOR-2) 117,241 125,011 195,207 103,342 100,821 103,342
* Applies to Individual debtor's only
** Numbers for the current month should balance (match) RECEIPTS and
CHECKS/OTHER DISBURSEMENTS lines on MOR-8
* REFUND; $22,197 RECEIVED FROM POTENTIAL LENDER FOR UNUSED PREPAID DUE
DILIGENCE WORK AND $10 FOR REBATE FOR ELECTRIC COOP.
** PAYMENT OF ORIGINAL DIP LOAN INCLUSIVE OF PRINCIPAL, INTEREST AND LENDERS
EXPENSES.
MOR-7 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
CASH ACCOUNT RECONCILIATION
MONTH OF JANUARY 99
HELD IN
BANK NAME ESCROW
ACCOUNT NUMBER #20052910 #2576000025 ATTORNEY'S
ACCOUNT TYPE OPERATING BOND FUND ESCROW OTHER FUNDS TOTAL
--------- ------- ---------- ----------- -----
BANK BALANCE 15,769 96,732 0 3,319 115,820
DEPOSIT IN TRANSIT 0 0 0 0 0
OUTSTANDING CHECKS 14,999 0 0 0 14,999
ADJUSTED BANK BALANCE 770 96,732 0 3,319 100,821
BEGINNING CASH - PER BOOKS 4,026 94,471 0 4,845 103,342
RECEIPTS 81,162 2,261 0 104 83,527
TRANSFERS BETWEEN ACCOUNTS 0 0 0 0 0
(WITHDRAWAL) CONTRIBUTION - BY 0 0 0 0 0
INDIVIDUAL DEBTOR MFR-2
CHECKS/OTHER DISBURSEMENTS 84,418 0 0 1,630 86,048
ENDING CASH - PER BOOKS 770 96,732 0 3,319 100,821
*** Numbers for the current month should balance (match) TOTAL RECEIPTS and
TOTAL DISBURSEMENTS lines on MOR-7.
*RECAP OF OTHER ACCOUNTS:
ATASCOSA NATIONAL BANK N/A 2,532
JOURDANTON STATE BANK 4033590 57
PETTY CASH N/A 628
FROST BANK - FIRST PAY N/A 102
--------
3,319
MOR-8 Revised 07/01/98
CASE NAME: Knight Equipment & Manufacturing Corp. CASE NUMBER: 98-54130-RBK
PAYMENTS TO INSIDERS AND PROFESSIONALS
Of the total disbursements shown for the month, list the amount paid to insiders
(as defined in Section 101(31) (A)-(F) of the U. S. Bankruptcy Code) and the
professionals. Also, for insiders identify the type of compensation paid (e.g.,
salary, commission, bonus, etc.) (Attach additional pages as necessary.)
MONTH MONTH MONTH MONTH MONTH
INSIDERS: NAME/POSITION/COMP TYPE SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY
98 98 98 98 99
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1. DERAL KNIGHT - CEO - SALARY 9,926 12,407 9,926 12,407 9,926
2. DERAL KNIGHT - CEO - AUTO 1,746 1,746 0 0 0
3. BARRY LAIDLAW - PRES. -SALARY 5,385 6,731 5,385 6,731 5,385
4. BARRY LAIDLAW - PRES. - AUTO 755 755 755 0 0
5. SCOTT KALISH - TREAS. - SALARY 6,000 7,500 6,000 7,500 6,000
6. SHIRLEY J. BOYLE - SEC. - SALARY 3,200 4,000 3,200 4,000 3,200
------ ------ ------ ------ ------
TOTAL INSIDERS (MOR-1) 27,012 33,139 25,266 30,638 24,511
====== ====== ====== ====== ======
PROFESSIONALS MONTH MONTH MONTH MONTH MONTH
NAME/ORDER DATE SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY
98 98 98 98 99
- ------------------------------------------------------------------------------------------
1. The PWS Group 0 7,500* 0 0 0
2. Attorneys representing
Rickel Securities** 0 0 5,000 0 0
3.
4.
5.
6.
--- ----- ----- --- ---
TOTAL PROFESSIONALS (MOR-1) 0 7,550 5,000 0 0
=== ===== ===== === ===
* Application of Prepayment, Non Cash Transaction
MOR-9