EXHIBIT 13
FOR BETTER LIVING, INC.
1995 Annual Report
A MESSAGE TO OUR STOCKHOLDERS
Our Company was profitable for 1995 as a result of record earnings at our
magazine subsidiary and a gain from the sale of securities. Quikset, our precast
concrete and plastics manufacturer, had an operating loss for 1995.
Quikset continues to identify and respond to the fundamental changes in its
market, which require more highly engineered, complex products. Quikset has
undergone extensive changes in personnel, plant, equipment and engineering
ability to supply its customers profitably; changes which are now largely
complete. We continue to believe that Quikset is on a course to long-term
profitability.
The Communications Group encountered paper cost increases of more than 40% in
1995. It is a credit to the Communications Group that they achieved record high
earnings once again in the face of this increase.
As I predicted in my letter to you last year, the California Franchise Tax Board
did appeal our favorable ruling in the dispute over the deductibility of oil and
gas expenses from 1978 through 1981. We are contesting their appeal vigorously
and have entered a motion to recover some attorney costs if we ultimately
prevail. We anticipate a ruling from the California Court of Appeal sometime
later this year.
Sincerely,
Richard G. Fabian
Chairman of the Board
March 15, 1996
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 30, 1995 AND DECEMBER 31, 1994
- --------------------------------------------------------------------------------
(In thousands)
December 30, December 31,
1995 1994
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,528 $ 1,828
Available-for-sale securities 1,559
Accounts receivable (less allowance for doubtful accounts
of $747,000 and $841,000 at December 30, 1995 and
December 31, 1994, respectively) 13,177 9,350
Inventories 8,401 8,406
Deferred income taxes 2,065 1,705
Other current assets 3,881 3,488
-------- --------
Total current assets 29,052 26,336
PROPERTY:
Property at cost 39,967 37,960
Less accumulated depreciation and amortization (28,614) (27,126)
-------- --------
Property, net 11,353 10,834
AVAILABLE-FOR-SALE SECURITIES 1,700 1,605
OTHER ASSETS 477 729
-------- --------
$ 42,582 $ 39,504
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
2
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 30, 1995 AND DECEMBER 31, 1994 (Continued)
- --------------------------------------------------------------------------------
(In thousands except share amounts)
December 30, December 31,
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ -- $ 1,225
Current portion of long-term debt and capital lease obligations 1,217 1,633
Accounts payable 4,139 5,029
Accrued salaries and wages 1,941 1,614
Deferred income 1,860 1,591
Accrued insurance 999 830
Other current liabilities 3,026 3,468
------- -------
Total current liabilities 13,182 15,390
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS 11,718 5,790
OTHER LIABILITIES (primarily deferred compensation) 1,039 1,356
COMMITMENTS
STOCKHOLDERS' EQUITY:
Preferred stock - par value $1 per share (authorized,
150,000 shares; outstanding, none)
Common stock - par value $.05 per share (authorized,
2,500,000 shares; outstanding, 877,816 shares) 44 44
Additional paid-in capital 1,083 1,083
Net unrealized gains on available-for-sale securities,
net of taxes 214 767
Retained earnings 15,302 15,074
------- -------
Total stockholders' equity 16,643 16,968
------- -------
$42,582 $39,504
======= =======
<FN>
See accompanying notes to consolidated financial statements.
</FN>
3
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993
- --------------------------------------------------------------------------------
(In thousands except per common share amounts)
Years ended
----------------------------------------
December 30, December 31, December 25,
1995 1994 1993
NET REVENUES $ 81,517 $ 71,396 $ 67,857
COST AND EXPENSES:
Cost of sales 50,422 45,563 40,986
Selling, general and administrative expenses 29,265 27,711 26,399
Interest expense 1,253 873 998
-------- -------- --------
Total cost and expenses 80,940 74,147 68,383
-------- -------- --------
INCOME (LOSS) BEFORE PROVISION
(BENEFIT) FOR TAXES 577 (2,751) (526)
PROVISION (BENEFIT) FOR TAXES 261 (915) (181)
-------- -------- --------
NET INCOME (LOSS) $ 316 $ (1,836) $ (345)
======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE $0.36 ($2.09) ($0.39)
===== ===== =====
<FN>
See accompanying notes to consolidated financial statements.
</FN>
4
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993
- --------------------------------------------------------------------------------
(In thousands except per share amounts)
Net unrealized
gains on
available-
Common stock Additional for-sale
---------------- paid-in securities, Retained
Shares Amount capital net of taxes earnings Total
BALANCE, December 26, 1992 878 $ 44 $ 1,083 $ -- $ 17,430 $ 18,557
Net loss (345) (345)
Cash dividends ($.10 per share) (87) (87)
--- ---- ------- ----- -------- --------
BALANCE, December 25, 1993 878 44 1,083 16,998 18,125
Effect of change in accounting
principle, net of taxes 716 716
Net unrealized gains on
available-for-sale securities,
net of taxes 51 51
Net loss (1,836) (1,836)
Cash dividends ($.10 per share) (88) (88)
--- ---- ------- ----- -------- --------
BALANCE, December 31, 1994 878 44 1,083 767 15,074 16,968
Net unrealized gains on
available-for-sale securities,
net of taxes (553) (553)
Net income 316 316
Cash dividends ($.10 per share) (88) (88)
--- ---- ------- ----- -------- --------
BALANCE, December 30, 1995 878 $ 44 $ 1,083 $ 214 $ 15,302 $ 16,643
=== ==== ======= ===== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
5
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993
- --------------------------------------------------------------------------------
(In thousands)
Years ended
----------------------------------------
December 30, December 31, December 25,
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 316 $ (1,836) $ (345)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Depreciation and amortization of property 1,803 2,065 2,255
Other amortization 145 70 34
Provision for losses on accounts receivable 230 424 159
Deferred income taxes (412) (718) (912)
Deferred compensation 73 (50) 136
(Gain) loss on sales of available-for-sale securities (1,255) 4 (1,079)
Write-down of real estate to fair market value 502
Other (70) (18) 144
Changes in operating assets and liabilities:
Accounts receivable (4,057) 399 (378)
Inventories 5 950 (1,254)
Other current assets (451) (1,713) (194)
Other assets 661 (270) 20
Accounts payable (890) 399 1,248
Accrued salaries and wages 327 (739) 648
Deferred income 269 406 179
Other current liabilities (273) (548) 1,357
Other liabilities (390) (544) (151)
-------- -------- --------
Net cash (used in) provided by operating activities (3,969) (1,217) 1,867
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property (2,343) (1,574) (854)
Purchases of available-for-sale securities (717) (1,248)
Proceeds from sale of property and available-for-sale
securities 1,886 194 4,409
-------- -------- --------
Net cash (used in) provided by investing activities (457) (2,097) 2,307
-------- -------- --------
<FN>
See accompanying notes to consolidated financial statements.
</FN>
6
FOR BETTER LIVING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
(In thousands)
Years ended
----------------------------------------
December 30, December 31, December 25,
1995 1994 1993
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of debt and capital lease obligations $ (5,957) $ (7,204) $ (1,908)
Proceeds from short-term borrowings 3,025 1,225
Proceeds from long-term debt 7,146 7,000
Dividends paid (88) (88) (87)
-------- -------- --------
Net cash provided by (used in) financing activities 4,126 933 (1,995)
-------- -------- --------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (300) (2,381) 2,179
CASH AND CASH EQUIVALENTS,
beginning of year 1,828 4,209 2,030
-------- -------- --------
CASH AND CASH EQUIVALENTS, end of year $ 1,528 $ 1,828 $ 4,209
========= ======== =========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
7
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES AND OTHER
Nature of Operations - For Better Living, Inc. (the Company) was
incorporated in Delaware in 1969. The Quikset Organization, a wholly-owned
subsidiary, is primarily engaged in the manufacture and distribution of
precast concrete and plastic products, which are primarily marketed to
utility companies throughout the United States and Canada. Surfer
Publications, also a wholly-owned subsidiary, is primarily engaged in the
publication of specialty magazines. Surfer Publications also produces cable
television and home video programs.
Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of For Better Living, Inc. and its
wholly-owned subsidiaries (the Company). All significant intercompany
balances and transactions have been eliminated.
Fiscal Year-end - The Company's fiscal year ends on the last Saturday in
December.
Inventories - Inventories are stated principally at the lower of first-in,
first-out cost or market.
Cash Equivalents - The Company considers all highly-liquid investments with
a maturity of three months or less when purchased to be cash equivalents.
Property, Depreciation and Amortization - The cost of property is
depreciated over the estimated useful lives of the assets by application of
the straight-line method to specific assets. The cost of leasehold
improvements is amortized over the shorter of the estimated useful lives of
the assets or the remaining lease periods of the associated leases.
Income (Loss) Per Common Share - Income (loss) per common share is computed
by dividing net income (loss) by the weighted average number of shares of
common stock outstanding during each year. The number of common shares used
in computing earnings per common share for the fiscal years ended December
30, 1995, December 25, 1994 and December 25, 1993 is 877,816.
Deferred Income - Deferred income represents amounts received from
subscriptions in advance of magazine deliveries and is reflected in
revenues over the subscription term.
Reclassifications - Certain amounts as previously reported have been
reclassified to conform to the current period presentation.
Related Party Transactions - A director of the Company is associated with a
law firm that rendered legal services resulting in fees charged to the
Company during 1995 and 1994 of approximately $156,000 and $358,000,
respectively. Approximately $51,000 and $184,000 is included in other
current liabilities as of December 30, 1995 and December 31, 1994,
respectively.
8
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
Fair Value of Financial Instruments - The recorded amounts of assets and
liabilities at December 30, 1995 approximate fair value in accordance with
Financial Accounting Standards No. 107, Disclosures About Fair Value of
Financial Instruments.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from
those estimates.
Magazine Distribution - The Company has an agreement with an outside
service bureau who handles all subscription mailings of its specialty
magazines. The Company also has an agreement with a newsstand distributor
who handles all shipments, returns and collections with respect to single
copy magazine sales. The termination of either agreement could result in
delays in magazine distribution which could have a material adverse effect
on the Company's business, operating results and financial condition until
alternative sources of distribution could be obtained.
2. INVESTMENTS
The Company adopted Statement of Financial Accounting Standards No. 115
(SFAS 115), Accounting for Certain Investments in Debt and Equity
Securities, as of the beginning of fiscal year 1994. SFAS 115 requires the
classification of investments in debt and equity securities into three
categories: held-to-maturity, trading, and available-for-sale. Debt
securities that the Company has the positive intent and ability to hold to
maturity are classified as held-to-maturity securities and reported at
amortized cost. Debt and equity securities that are bought and held
principally for the purpose of selling in the near term are classified as
trading securities and reported at fair value, with unrealized gains and
losses included in the consolidated statements of operations. Debt and
equity securities not classified as either held-to-maturity or trading
securities are classified as available-for-sale securities and reported at
fair value, with unrealized gains and losses excluded from the consolidated
statements of operations and reported on the consolidated balance sheet in
a separate component of stockholders' equity, net of deferred taxes.
The Company has no held-to-maturity or trading securities. Realized gains
and losses on the sales of available-for-sale securities are determined on
the specific identification method and are included in the consolidated
statements of operations.
9
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- -------------------------------------------------------------------------------
Investments are classified as either current or noncurrent based upon
management's present intention to retain a specific security. Aggregate
cost and fair value of available-for-sale securities are as follows (in
thousands):
December 30, December 31,
1995 1994
Aggregate cost $1,342 $1,882
Aggregate market value 1,700 3,164
Gross unrealized gains 378 1,400
Gross unrealized losses 20 118
Net unrealized gains included in
stockholders' equity. net of taxes 214 767
Purchases 717
Proceeds from sale 1,795 134
Net gains and losses realized on the disposition of investments included in
the consolidated statements of operations for the fiscal years ended
December 30, 1995, December 31, 1994 and December 25, 1993 were $1,255,000,
$(4,000) and $1,079,000, respectively.
3. INVENTORIES
Inventories consist of the following (in thousands):
December 30, December 31,
1995 1994
Finished products $5,455 $5,404
Work-in-process 337 100
Raw materials and supplies 2,609 2,902
------ ------
$8,401 $8,406
====== ======
10
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- -------------------------------------------------------------------------------
4. PROPERTY
Property consists of the following (in thousands):
Accumulated
depreciation
Property, and Property,
at cost amortization net
December 30, 1995:
Land $ 2,287 $ -- $ 2,287
Buildings and leasehold improvements 9,691 5,626 4,065
Machinery and equipment 27,989 22,988 5,001
------- ------- -------
$39,967 $28,614 $11,353
======= ======= =======
December 31, 1994:
Land $ 2,287 $ -- $ 2,287
Buildings and leasehold improvements 9,660 5,203 4,457
Machinery and equipment 26,013 21,923 4,090
------- ------- -------
$37,960 $27,126 $10,834
======= ======= =======
5. BORROWING ARRANGEMENTS AND LONG-TERM DEBT
Long-term debt (exclusive of the current portion included in current
liabilities) consists of the following (in thousands):
December 30, December 31,
1995 1994
Secured line of credit, due June 27, 1997 $ 7,076 $ --
Secured term loan, due July 31, 2000 3,500 4,587
Subordinated income debentures, due December 15, 1997
(less unamortized discount of $72,000 and $107,000,
respectively) 496 514
Other 280 226
------- -------
$11,352 $ 5,327
======= =======
11
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
The Company borrowed $7,000,000 in 1994 secured by virtually all the
Company's machinery and equipment (the Term Loan). The Term Loan is to be
repaid in 75 monthly installments beginning in April 1994, with principal
payments as follows: 12 payments of approximately $117,000, 12 payments of
approximately $113,000, and 5l payments of approximately $83,000. The Term
Loan bears interest at the 30-day London Interbank Offered Rate, plus 2.97%
(8.7825% at December 30, l995). Because the Company was not in compliance
with all the covenants of the Term Loan at the end of 1994, the rate
increased to the 30-day London Interbank Offered Rate, plus 3.97%, until
the first month following the second quarter after the Company was in
compliance with the original covenants. The Company was in compliance at
December 30, 1995.
Also during 1994, the Company entered into a line of credit agreement (the
Credit Agreement) with its lead bank for $5,000,000. That line of credit
bore interest at the bank's reference rate and was secured by virtually all
the Company's receivables and inventory.
During 1994, the Company repaid two unsecured term loans prior to their due
date, incurring prepayment penalties of approximately $128,000.
In June 1995, the Company entered into a new revolving line of credit
agreement (the Line of Credit). The new Line of Credit replaced the Credit
Agreement which was paid in full in June 1995. The Line of Credit provides
the Company up to $10 million of available funds on a revolving basis
(based on a borrowing base formula, as defined) at an interest rate of
prime plus 1.25%. The prime rate was 8.75% at December 30, 1995. The Line
of Credit is collateralized by essentially all of the Company's accounts
receivable, inventories, plant and equipment (excluding land and
buildings), and certain intangible assets. The commitment under the Line of
Credit may be used to support letters of credit issued for the Company, the
face amounts of which are applied to total commitment. The terms of the
Line of Credit require the Company to maintain a minimum tangible net
worth. The Line of Credit expires June 27, 1997, but may be renewed for
successive two year periods.
The subordinated income debentures require annual sinking fund payments of
$53,000 over the remaining term. The interest rate is variable at the rate
of 1% per annum for each $100,000 of consolidated net income for the
immediately preceding fiscal year, with minimum and maximum rates of 5% and
10%, respectively. The interest rate was 5% per annum at December 30, 1995,
which rate will be effective through June 30, 1996. The interest rate will
be 5% per annum for the period July 1, 1996 through June 30, 1997. The
income debentures were discounted to approximate the market rate of
interest at date of issuance for similar obligations (approximately 11%).
As of December 30, 1995, the Company had two standby letters of credit
outstanding, one for $97,000 and one for $922,000.
Cash interest payments on borrowing arrangements and long-term debt during
the fiscal years ended December 30, 1995, December 31, 1994 and December
25, 1993 were $1,080,000, $828,000 and $919,000, respectively.
12
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
Future principal payments on long-term debt as of December 30, 1995 are
summarized as follows (in thousands):
1996 $ 1,116
1997 8,584
1998 1,012
1999 1,013
2000 513
Thereafter 231
-------
$12,469
========
6. LEASES
The Company leases a significant portion of its facilities under operating
leases that expire at various times through 2034.
Future rental commitments at December 30, 1995 under operating leases are
summarized as follows (in thousands):
1996 $ 893
1997 657
1998 515
1999 484
2000 462
Thereafter 7,268
-------
Total minimum rental commitments $ 10,279
========
Rental expense under operating leases is summarized as follows (in
thousands):
Years ended
-----------------------------------------
December 30, December 31, December 25,
1995 1994 1993
Total rental expense $ 984 $ 1,068 $ 1,051
===== ======= =======
13
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
The Company also leases certain properties under capital leases. Property
held under capital leases is summarized as follows (in thousands):
December 30, December 31,
1995 1994
Land $ 80 $ 80
Buildings and leasehold improvements $570 $570
Machinery and equipment $511 $511
Accumulated amortization $653 $540
The Company leased $104,000 of machinery and equipment in 1994 under
capital leases.
Future minimum lease payments as of December 30, 1995 under capital leases
are summarized as follows (in thousands):
1996 $ 130
1997 87
1998 86
1999 69
2000 69
Thereafter 138
------
Total future minimum lease payments 579
Less amount representing interest at rates implicit
in the lease agreements (112)
------
Present value of net minimum lease payments 467
Less current portion (101)
------
Noncurrent portion $ 366
======
Interest paid on capital lease obligations was $37,000, $51,000 and $54,000
for the fiscal years ended December 30, 1995, December 31, 1994 and
December 25, 1993, respectively.
7. STOCKHOLDERS' EQUITY
The Company has adopted a Performance Share Plan (Plan) under which
performance share units (Units) may be awarded by the Board of Directors to
key employees of the Company. Units mature five years after the award date
(subject to certain extensions), have a maturity value equal to the
increase in the book value per common share (as defined) since the date of
award and vest to the participant at the
14
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
rate of 20% per year. The Plan permits, among other options, the
participant to receive the value of the matured Units in cash or, subject
to certain limitations, to apply the value of vested Units towards the
purchase of an equal number of the Company's $.05 par value common stock
(Stock) at the prevailing market price. As of December 30, 1995, the
Company had 85,624 Units outstanding, of which 52,109 were vested. Of the
vested Units, 1,938 could be surrendered to purchase shares of the
Company's Stock during 1996.
In October 1988, the Board of Directors adopted the For Better Living, Inc.
1988 Stock Option Plan (the Option Plan) and the stockholders of the
Company approved the Option Plan in May 1989. There are no options
outstanding under the Option Plan and the Board of Directors discontinued
the plan in March 1994.
In October 1995, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standard No. 123, Accounting for Stock-Based
Compensation, which requires adoption of the recognition and measurement
provisions for nonemployee transactions no later than after December 15,
1995. The new standard defines a fair value method of accounting for stock
options and other equity instruments. Under the fair value method,
compensation cost is measured at the grant date based on the fair value of
the award and is recognized over the service period, which is usually the
vesting period.
Pursuant to the new standard, companies are encouraged, but are not
required, to adopt the fair value method of accounting for employee
stock-based transactions. Companies are also permitted to continue to
account for such transactions under Accounting Principles Board Opinion No.
25, Accounting for Stock Issued to Employees, but would be required to
disclose in a note to the financial statements pro forma net income and, if
presented, earnings per share as if the Company had applied the new method
of accounting.
The accounting requirements of the new method are effective for all
employee awards granted after the beginning of the fiscal year of adoption.
The Company has not yet determined if it will elect to change to the fair
value method, nor has it determined the effect the new standard will have
on net income and earnings per share should it elect to make such a change.
Adoption of the new standard will have no effect on the Company's cash
flows.
8. TAXES BASED ON INCOME
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income
Taxes. This statement requires the recognition of deferred tax assets and
liabilities for the future tax consequences of events that have been
recognized in the Company's consolidated financial statements or tax
returns. The measurement of the deferred items is based on enacted tax
laws. In the event the future consequences of differences between financial
reporting bases and the tax bases of the Company's assets and liabilities
result in a deferred tax
15
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
asset, SFAS 109 requires an evaluation of the probability of being able to
realize the future benefits indicated by such an asset. A valuation
allowance related to a deferred tax asset is recorded when it is more
likely than not that some portion or all of the deferred tax asset will not
be realized.
The provision (benefit) for taxes based on income consists of the following
(in thousands):
Years ended
------------------------------------------
December 30, December 31, December 25,
1995 1994 1993
Currently payable:
Federal $(161) $(543) $ 553
State 10 346 178
Deferred:
Federal 343 (480) (749)
State 69 (238) (163)
----- ----- -----
$ 261 $(915) $(181)
===== ===== =====
As of December 30, 1995 and December 31, 1994, the Company had net deferred
tax assets as follows (in thousands):
December 30, December 31,
1995 1994
Restructuring provisions $ 236 $ 499
Deferred compensation plan 254 273
Vacation accruals 180 180
Allowance for doubtful accounts 323 364
Workers compensation plan 62 86
Inventory reserves 1,064 1,108
Net operating loss carryforward 119 104
California unitary assessment 262 262
Write-down of fixed asset 217 217
Miscellaneous loss reserves 229 290
Other 132 117
Alternative minimum tax credit carryforward 214
----- -----
Gross deferred tax assets 3,292 3,500
----- -----
16
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
December 31, December 31,
1995 1994
Excess of tax depreciation over financial depreciation $ (441) $ (263)
State taxes (222) (216)
Unrealized gain on available-for-sale securities (155) (555)
Other (233) (269)
------- -------
Gross deferred tax liabilities (1,051) (1,303)
------- -------
Net deferred tax asset $ 2,241 $ 2,197
======= =======
The Company estimates that the majority of its deferred tax assets will be
realized during the next three fiscal years.
Of the total net deferred tax assets shown above, $176,000 and $492,000,
respectively, are included in other assets as of December 30, 1995 and
December 31, 1994 on the accompanying consolidated balance sheets.
A reconciliation between the provision (benefit) for taxes computed by
applying the federal statutory rate to income before taxes and the actual
provision (benefit) for taxes is as follows (in thousands):
December 30, December 31, December 25,
1995 1994 1993
Provision (benefit) for taxes at statutory rate $ 202 $(935) $(184)
State taxes, after federal income tax benefit 52 (115) 10
Dividend exclusion (96) (16) (16)
Other, net 103 151 9
----- ----- -----
$ 261 $(915) $(181)
===== ===== =====
Effective income tax rate 45.2% 33.3% 34.4%
==== ==== ====
Income tax cash payments during the fiscal years ended December 30, 1995,
December 31, 1994 and December 25, 1993 were $77,000, $380,000 and
$207,000, respectively.
17
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
The Company received, in prior periods, notices of proposed assessments
from the California Franchise Tax Board (CFTB) relating to its 1978-1981
tax years. The principal issue raised in these notices was whether the
Company's oil and gas operations were part of a unitary business with the
other operations of the Company. The CFTB has taken the position that the
oil and gas operations are not unitary in nature and, therefore, has
disallowed, for California purposes, losses arising from oil and gas
operations. The Company paid the assessed taxes of $379,000 and associated
interest of $946,000 in 1992. It filed suit in 1994 and received a decision
in its favor in February 1995 for recovery of these amounts, plus interest.
The CFTB has appealed that decision however, and the matter is now pending
before the California Court of Appeal. The Company expects a decision
before the end of 1996.
Deductions similar to those questioned by the CFTB for the 1978-1981 tax
years were also taken by the Company in its subsequent tax years. The CFTB
is currently examining these subsequent periods and, as a result of its
examination, has issued a notice of proposed assessment of additional taxes
for tax years 1982-1987. The proposed assessment is for $272,000 in
additional taxes which would result in associated interest expense of
approximately $457,000 through the end of fiscal year 1995. The Company's
management believes that the ultimate outcome of this matter will not have
a material adverse effect on the Company's consolidated financial
statements.
9. SEGMENT INFORMATION
As of December 30, 1995, the significant industry segments of the Company
were (1) the manufacture and distribution of precast concrete and plastic
structures (The Quikset Organization), and (2) the publication of specialty
magazines (Communications Group). Total revenues by industry include both
revenues to unaffiliated customers, as reported in the company's
consolidated statements of operations and intersegment revenues.
Intersegment revenues are accounted for on the same basis as revenues to
unaffiliated customers.
The Quikset Organization markets a substantial portion of its products to
utility companies and general contractors serving the utility industry.
This segment's risk of loss due to granting credit to its customers is
reduced by, among other things, the use of applicable lien laws to secure
payments.
Operating profit is equal to net revenues less operating expenses. In
computing operating profit, taxes on income, general corporate expenses and
interest expense have been excluded.
Identifiable assets by industry are those assets that are used in the
Company's operations in each industry segment.
18
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
REVENUES (in thousands)
Unaffiliated Inter-
customers segment Total
Fiscal year ended December 30, 1995:
The Quikset Organization $ 64,704 $ -- $ 64,704
Communications Group 14,889 14,889
Other 1,924 158 2,082
-------- ------ --------
81,517 158 81,675
Eliminations (158) (158)
-------- ------ --------
Consolidated net revenues $ 81,517 $ -- $ 81,517
======== ====== ========
Fiscal year ended December 31, 1994:
The Quikset Organization $ 60,267 $ -- $ 60,267
Communications Group 10,958 10,958
Other 171 158 329
-------- ------ --------
71,396 158 71,554
Eliminations (158) (158)
-------- ------ --------
Consolidated net revenues $ 71,396 $ -- $ 71,396
======== ====== ========
Fiscal year ended December 25, 1993:
The Quikset Organization $ 58,453 $ -- $ 58,453
Communications Group 8,130 8,130
Other 1,274 265 1,539
-------- ------ --------
67,857 265 68,122
Eliminations (265) (265)
-------- ------ --------
Consolidated net revenues $ 67,857 $ -- $ 67,857
======== ====== ========
19
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
OPERATING PROFIT (LOSS) (in thousands)
December 30, December 31, December 25,
1995 1994 1993
The Quikset Organization $ (41) $(1,745) $ 1,643
Communications Group 1,985 1,243 670
Other 2,038 (122) 1,393
------- ------- -------
Total operating profit (loss) 3,982 (624) 3,706
General corporate expenses (2,152) (1,254) (3,234)
Interest expense (1,253) (873) (998)
------- ------- -------
Income (loss) before provision (benefit)
for taxes $ 577 $(2,751) $ (526)
======= ======= =======
IDENTIFIABLE ASSETS, DEPRECIATION AND
AMORTIZATION AND PROPERTY ADDITIONS (in thousands)
Identifiable Depreciation Property
and
assets amortization additions
December 30, 1995:
The Quikset Organization $32,632 $ 1,692 $ 2,273
Communications Group 4,958 48 51
Corporate 2,447 174 19
Other 2,545 34
------- ------- -------
$42,582 $ 1,948 $ 2,343
======= ======= =======
December 31, 1994:
The Quikset Organization $30,108 $ 1,931 $ 1,477
Communications Group 3,917 42 71
Corporate 3,046 111 26
Other 2,433 51
------- ------- -------
$39,504 $ 2,135 $ 1,574
======= ======= =======
December 25, 1993:
The Quikset Organization $31,602 $ 2,090 $ 692
Communications Group 2,100 74 45
Corporate 3,725 57 117
Other 3,054 68
------- ------- -------
$40,481 $ 2,289 $ 854
======= ======= =======
20
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
10. PENSION PLAN
The Company has a defined benefit pension plan (Pension Plan) covering
certain employees. The benefits associated with the Pension Plan are
determined by a formula based on years of service. The Company's funding
policy is to contribute amounts that are sufficient to satisfy legal
funding requirements and are deductible for federal income tax purposes.
Pension expense for the fiscal years ended December 30, 1995, December 31,
1994 and December 25, 1993 consists of the following (in thousands):
December 30, December 31, December 25,
1995 1994 1993
Service cost $ 132 $ 170 $ 182
Interest cost 232 222 200
Return on plan assets (131) (134) (178)
Other (115) (100) (45)
----- ----- -----
$ 118 $ 158 $ 159
===== ===== =====
A reconciliation of the funded status of the Pension Plan with the
amount included in other current liabilities consists of the following
(in thousands):
December 30, December 31,
1995 1994
Plan assets at fair value $ 3,209 $ 3,144
------- -------
Actuarial present value of accumulated plan
benefits:
Vested 3,057 2,740
Nonvested 43 52
------- -------
3,100 2,792
Additional projected benefits 154 166
------- -------
Projected benefit obligation 3,254 2,958
------- -------
Excess of plan assets over projected benefit
obligation (45) 186
Less:
Unrecognized transition assets 21 32
Unrecognized net gain 201 397
Unrecognized prior service cost (148) (173)
------- -------
Pension liability $ (119) $ (70)
======= =======
21
FOR BETTER LIVING, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
Significant assumptions for the fiscal years ended December 30, 1995,
December 31, 1994 and December 25, 1993 were as follows:
Discount rate on projected benefit obligation 8%
==
Long-term rate of return on plan assets 8%
==
Assets held by the Pension Plan consist of unallocated insurance contracts
stated at contract value which approximates market value.
11. FOURTH QUARTER ADJUSTMENTS
During the fourth quarter of fiscal year 1994, the Company recorded certain
inventory write-offs and obsolescence reserves totaling $1,500,000, the
write down to fair market value of certain real estate in the amount of
$502,000, and a loss reserve for certain pending litigation of $200,000.
12. SUBSEQUENT EVENTS
The Company sold the Quikset Organization's Irvine, California headquarters
building in March of 1996. The building had a net book value of $886,000 at
December 30, 1995. The Company received approximately $989,000 in net
proceeds and recognized approximately a $109,000 gain on the sale during
the first quarter of 1996.
22
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors
of For Better Living, Inc.:
We have audited the accompanying consolidated balance sheets of For Better
Living, Inc. and subsidiaries as of December 30, 1995 and December 31, 1994, and
the related consolidated statements of operations, stockholders' equity and cash
flows for each of the three fiscal years in the period ended December 30, 1995.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of For Better Living, Inc. and
subsidiaries at December 30, 1995 and December 31, 1994, and the results of
their operations and their cash flows for each of the three fiscal years in the
period ended December 30, 1995 in conformity with generally accepted accounting
principles.
As described in Note 2, the Company adopted Statement of Financial Accounting
Standards No. 115, Accounting for Certain Debt and Equity Securities, effective
December 26, 1993.
Deloitte & Touche LLP
Costa Mesa, California
March 15, 1996
23
FOR BETTER LIVING, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1995, DECEMBER 31, 1994 AND DECEMBER 25, 1993
- --------------------------------------------------------------------------------
OPERATING REVENUES
Operating revenues at the Communications Group increased $3,931,000, or 36%, to
$14,889,000 following an increase of $2,828,000, or 35%, in 1994 and an increase
of $966,000, or 13%, in 1993.
Operating revenues at the Quikset Organization (Quikset) increased $4,437,000,
or 7.4%, to $64,704,000 following an increase of $1,814,000, or 3.1%, in 1994
and a decrease of $1,636,000, or 2.7%, in 1993.
Increases in operating revenue at the Communications Group were due to increased
sales of advertising, subscription sales and newsstand sales for all the
publications: Surfer, Powder, Snowboarder and Bike. Advertising sales also
increased for the Communications Group's television programs, Surfer Magazine
and SBTV (Snowboarder Television).
Increases in operating revenue at the Quikset Organization were due to greater
demand for Quikset's products in most product lines and throughout most of
Quikset's market.
There were also increases in operating revenues at the corporate level of
$1,753,000, or 1025%, to $1,924,000 in 1995 primarily due to the sale of
securities, following a decrease of $1,103,000, or 87%, in 1994 and a decrease
of $319,000, or 20%, in 1993.
OPERATING PROFITS
Operating profit at the Communications Group increased $742,000 to $1,985,000,
or 60%, in 1995, following an increase of $573,000, or 85%, in 1994 and
$205,000, or 44%, in 1993. Most of the increase in the Communications Group's
operating profit is a result of increased sales. The Communications Group had
paper price increases in excess of 40%, which significantly impacted
profitability.
Operating profit of the Quikset Organization increased $1,704,000, or 98%, to a
loss of $41,000 in 1995, following a decrease of $3,388,000, or 206%, in 1994
and a decrease of $389,000, or 19%, in 1993. Quikset's operating loss was the
result of manufacturing and inventory variances caused, in part, by the
introduction of a more complex, highly-engineered product line.
INTEREST AND OTHER EXPENSES
The Company's interest expense increased $380,000, or 44%, to $1,253,000 in
1995, following a decrease of $125,000, or 13%, in 1994 and a decrease of
$209,000, or 17%, in 1993. The increase in the interest expense for 1995 was a
result of borrowings under the Company's credit line associated with an increase
in sales and accounts receivable.
General corporate expenses increased $898,000, or 72%, to $2,152,000 in 1995,
following a decrease of $1,980,00, or 61%, in 1994 and an increase of
$1,192,000, or 58%, in 1993. General corporate expenses were lower in 1994 due
to the reversal of previously accrued reserves which were no longer necessary.
24
FOR BETTER LIVING, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1995, DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
The increase in general corporate expenses in 1993 was primarily the result of
the Company recognizing approximately $1,300,000 in costs associated with the
reorganization and restructuring of its corporate office. These reorganization
and restructuring costs were primarily comprised of severance and associated
costs related to the separation of certain Company officers and other employees,
expenses relating to ongoing contractual arrangements with several of these
employees, a loss incurred on the abandonment of certain rental property and
costs associated with the relocation of the Company's corporate office. These
costs were recorded in the third quarter of 1993 and were included in selling,
general and administrative expenses in the accompanying consolidated statements
of operations. Approximately $100,000 of the recognized expenditures were
disbursed in fiscal year 1993, with $708,000 and $162,000 being disbursed in
fiscal years 1994 and 1995, respectively. The remaining costs associated with
contractual arrangements will be disbursed in future years.
AVAILABILITY OF FUNDS TO SUPPORT CURRENT AND FUTURE OPERATIONS
Cash and cash equivalents decreased $300,000, or 16.4%, to $1,528,000 in 1995,
following a decrease of $2,381,000, or 57%, in 1994 and an increase of
$2,179,000, or 107%, in 1993.
The primary sources of cash in 1995 were $7,146,000 from long-term borrowings
and $3,025,000 from short-term borrowings and $1,795,000 for the sale of
securities. The primary uses of cash were $3,969,000 used in operating
activities, including increases in accounts receivable, and $2,343,000 for
purchases of property, predominately for the Quikset Organization.
Management believes that its cash position, together with available credit and
funds anticipated to be generated by operations, will provide sufficient
resources to finance operating activities.
25
BUSINESS
For Better Living, Inc. was incorporated in Delaware in 1969 and first issued
publicly traded equity securities in 1972. The Company is primarily engaged in
(1) the manufacture and distribution of precast concrete and plastic products,
and (2) the publication of specialty magazines. Following is a description of
the Company's segments and the principal operations of each as of December 30,
1995 (see Note 9 in the accompanying consolidated financial statements):
Concrete and Plastic Products
Associated Concrete Products, Inc., Dalworth Concrete Products, Inc. and DeKalb
Concrete Products, Inc. (Concrete) and Associated Plastics, Inc. (Plastics)
comprise the concrete and plastic products segment (The Quikset Organization).
Concrete designs, manufactures and distributes underground precast concrete
structures. These products are marketed primarily to utility companies and
general contractors by Concrete's eleven plants located in California, Texas,
Arkansas, Georgia and Florida. Concrete has developed a patented line of precast
concrete sectional boxes to house underground transformers, distribution systems
and splicing manholes which are marketed under the trade name of Quikset.
26
FOR BETTER LIVING, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
Concrete obtains its raw materials from domestic sources. Alternate sources are
readily available.
Although no reliable industry statistics are available, the Company believes
that Concrete is one of the larger producers of underground precast concrete
structures in the United States; however, in addition to other manufacturers of
precast concrete and plastic products, Concrete also competes with contractors
who pour structures on site.
Plastics produces plastic products using a fiber reinforced plastic process and
a "structural foam" process developed for injection molding. A number of
products are now manufactured out of plastic material and are similar to
existing product lines of Concrete.
These products are marketed primarily to electrical and telephone utility
companies throughout the United States and parts of Canada by Plastics' two
plants located in California and Arkansas. The primary raw materials used by
Plastics are acrylonitrile-butadiene-styrene copolymers, polyester resins and
glass fiber reinforcements, which are purchased from alternate domestic sources.
Specialty Magazine Publications
Surfer Publications (Communications Group) constitutes the specialty magazine
publications segment. As of December 30, 1995, this segment published Surfer,
Powder, Snowboarder and Bike Magazines (published twelve, seven, seven and nine
times, respectively, per year). In February 1994, the first issue of Bike was
published. The Communications Group also produces cable television and home
video programs.
The in-house staff sells advertising, markets circulation and produces the
editorial product (which is prepared electronically to press-ready film). The
magazines are distributed to newsstands under contract with right of return for
unsold copies. Subscription fulfillment, printing and television post-production
services are procured from outside sources.
Product Development
The Company believes that its future growth depends upon its ability to continue
developing new products and refining its existing products with a plus that is
better than competition.
During the fiscal years ended December 30, 1995, December 31, 1994 and December
25, 1993, the Company spent $248,000, $179,000 and $341,000, respectively, for
product development. These activities were primarily directed toward the
improvement of existing products.
Employees
As of December 30, 1995, the Company employed 522 persons.
27
FOR BETTER LIVING, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The common stock of For Better Living, Inc. is traded on the Nasdaq Small-Cap
Market under the symbol FBTR. The per-share range of closing high and low bid
quotations and the dividends declared and paid, by quarter, for the fiscal years
ended December 30, 1995 and December 31, 1994 were as follows:
Quarter
----------------------------------------------
First Second Third Fourth
FISCAL YEAR ENDED DECEMBER 30, 1995:
High bid $ 9.00 $ 8.63 $ 8.63 $ 9.00
Low bid 8.50 8.50 8.50 8.50
Dividends 0.10
Quarter
----------------------------------------------
First Second Third Fourth
FISCAL YEAR ENDED DECEMBER 31, 1994:
High bid $ 9.00 $ 9.00 $ 9.00 $ 9.00
Low bid 8.00 8.50 9.00 9.00
Dividends 0.10
The market quotations were obtained from the NASD statistical report. Such
quotations reflect interdealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions. There were 200 record
holders of the Company's common stock as of March 15, 1996.
FORM 10-K AVAILABLE
The Company will furnish without charge to security holders a copy of its most
recent Annual Report on Form 10-K filed with the Securities and Exchange
Commission. Direct your request to Karl M. Stockbridge, Executive Vice
President, For Better Living, Inc., 13620 Lincoln Way, Suite 380, Auburn,
California 95603.
28
FOR BETTER LIVING, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
(In thousands except per share amounts)
December 30, December 31, December 25, December 26, December 27,
1995 1994 1993 1992 1991
Net revenues $ 81,517 $ 71,396 $ 67,857 $ 68,846 $ 71,906
Net income (loss) $ 316 $ (1,836) $ (345) $ 720 $ 455
Total assets $ 42,582 $ 39,504 $ 40,481 $ 39,522 $ 43,959
Long-term
obligations $ 11,718 $ 5,790 $ 5,615 $ 7,486 $ 9,363
Weighted average
number of common
shares outstanding 878 878 878 878 885
Income (loss) per
common share $ 0.36 $ (2.09) $ (0.39) $ 0.82 $ 0.51
Cash dividends
declared per
common share $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.10
29
FOR BETTER LIVING, INC. AND SUBSIDIARIES
COMPANY INFORMATION
FOR THE YEARS ENDED DECEMBER 30, 1995,
DECEMBER 31, 1994 AND DECEMBER 25, 1993 (Continued)
- --------------------------------------------------------------------------------
DIRECTORS INDEPENDENT ACCOUNTANTS
Richard G. Fabian Deloitte & Touche LLP
Chairman of the Board 695 Town Center Drive
For Better Living, Inc. Costa Mesa, California 92626
Episcopal Priest
F. G. Fabian, Jr. COMMON STOCK
Chairman Emeritus REGISTRAR AND TRANSFER AGENT
For Better Living, Inc.
U.S. Stock Transfer Corporation
William S. Farmer 1745 Gardena Avenue, Suite 200
Attorney at Law Glendale, California 91204
Collette & Erickson
Danna Lewis-Gordon CORPORATE OFFICE
President
Surfer Publications 13620 Lincoln Way, Suite 380
Auburn, California 95603
Karl M. Stockbridge Tel: (916) 823-9600
Executive Vice President Fax: (916) 823-9650
For Better Living, Inc.
Peter F. Sullivan OPERATING COMPANIES
Marketing Manager Eastern Area
Pre-Sales Consulting THE QUIKSET ORGANIZATION
J.D. Edwards & Company 2301 Dupont Drive, Suite 100
Irvine, California 92715
OFFICERS SURFER PUBLICATIONS
33046 Calle Aviador
Richard G. Fabian San Juan Capistrano, California 92675
Chairman of the Board
Karl M. Stockbridge
Executive Vice President
30