ITEM 1 Business
Structured Asset Securities Corporation (the "Company") was incorporated in Delaware on January 2, 1987 as a limited- purpose finance corporation. All of the outstanding capital stock is owned by Lehman Commercial Paper Inc. ("LCPI"), an indirect wholly owned subsidiary of Lehman Brothers Holdings Inc. ("Holdings").
The Company's activities consist of the issuance and sale of debt securities (the "Bonds") collateralized by mortgages and/or mortgage-backed securities or serving as the depositor for one or more trusts (the "Trust(s)") which will issue pass-through certificates representing an undivided interest in such mortgage collateral. The Company may also serve as seller to, depositor of or sponsor for any Trust issuing Pass-through Certificates of interest (including stripped participation interests) in a pool of mortgage collateral or interest therein. The mortgage collateral may consist of "fully modified pass-through" mortgage-backed certificates guaranteed as to full and timely payment of principal and interest by the Government National Mortgage Association, which guaranty is backed by the full faith and credit of the United States Government, mortgage participation certificates issued and guaranteed as to the full and timely payment of interest and ultimate payment of principal by the Federal Home Loan Mortgage Corporation, guaranteed mortgage pass-through certificates issued and guaranteed as to the full and timely payment of principal and interest by the Federal National Mortgage Association, conventional mortgage pass-through certificates or mortgage-backed bonds issued with respect to or secured by a pool of mortgage loans, or a combination of such certificates.
The Company has filed registration statements on Form S-3 with the Securities and Exchange Commission ("the Commission") which permit the Company to issue from time to time, Bonds and Pass-through Certificates in the principal amount not to exceed $11.7 billion. The Company has also filed registration statements on Form S-3 for the issuance of $6 billion principal amount of Bonds. As of November 30, 1995, approximately $11.4 billion was available for issuance under the registration statements referred to above.
ITEM 2

ITEM 2 Properties
The Company owns no physical properties.
ITEM 3

ITEM 3 Legal Proceedings
There are no pending legal proceedings.
ITEM 4

ITEM 4 Submission of Matters to a Vote of Security Holders
Pursuant to General Instruction J of Form 10-K, the information required by Item 4 is omitted.
PART II
ITEM 5

ITEM 5 Market for Registrant's Common Stock and Related Stockholder Matters
The Company's sole class of capital stock is its $1.00 par value common stock which is all owned by LCPI. There is no public market for the Company's common stock.
ITEM 6

ITEM 6 Selected Financial Data
Pursuant to General Instruction J of Form 10-K, the information required by Item 6 is omitted.
ITEM 7

ITEM 7 Management's Discussion and Analysis of Financial Condition and Liquidity and Capital Resources and Results of Operations
Set forth below is management's discussion and analysis of financial condition and liquidity and capital resources and results of operations for the twelve months ended November 30, 1995, the eleven months ended November 30, 1994 and the twelve months ended December 31, 1993.
Financial Condition and Liquidity and Capital Resources
The Company's assets increased from $18.2 million at November 30, 1994 to $153.0 million at November 30, 1995 primarily related to the increase in financial instruments owned. Financial instruments owned at November 30, 1995 aggregated $146.0 million and represent the portion of issued securities retained by the Company and are carried at market or fair value, as appropriate.
Stockholder's equity increased from $9.0 million at November 30, 1994 to $149.0 million at November 30, 1995 as a result of net capital contributions from LCPI and income earned during the twelve months ended November 30, 1995. Capital contributions from LCPI are made to fund securities retained by the Company from new issuances. The Company continually monitors its capital position and makes capital distributions to LCPI as excess funds are realized from securities related transactions.
Results of Operations
For the twelve months ended November 30, 1995 and eleven months ended November 30, 1994:
During the twelve months ended November 30, 1995 the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-C1 totaling approximately $394.3 million principal amount, Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-3 totaling approximately $99.5 million principal amount, Structured Asset Securities Corporation Mortgage Pass-through Certificates, Series 1995-1 totaling approximately $73.2 million principal amount, Structured Asset Securities Corporation Mortgage Pass-through Certificates, Series 1995-2, Group II, totaling approximately $74.1 million principal amount, Structured Asset
ITEM 7 Management's Discussion and Analysis of Financial Condition and Liquidity and Capital Resources and Results of Operations (continued)
Securities Corporation Mortgage Pass-through Certificates, Series 1995-2, Group I, totaling approximately $174.2 million principal amount, LB Commercial Conduit Mortgage Trust Multiclass Pass-through Certificates, Series 1995-C2 totaling approximately $217.0 million principal amount, and Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-C4 totaling approximately $179.6 million principal amount. In addition, the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-C3 totaling approximately $322.8 million principal amount in a private placement.
Trading revenues totaled $9,579,548 for the twelve months ended November 30, 1995 and $7,674,075 for the eleven months ended November 30, 1994. Trading revenues are attributable to the issuance and sale of securities and valuing financial instruments owned at market or fair value.
Interest income increased from $5,868,153 during the eleven months ended November 30, 1994 to $11,998,933 during the twelve months ended November 30, 1995, attributable principally to the greater amount of interest earning securities held during 1995. Management fees increased from $3,395,253 during the eleven months ended November 30, 1994 to $5,407,152 during the twelve months ended November 30, 1995, reflecting the increased trading and operating activities of the Company. Management fees are the principal component of general and administrative expenses in the accompanying Statements of Operations.
For the eleven months ended November 30, 1994 and twelve months ended December 31, 1993:
During 1994, the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1994-C1 totaling approximately $421.9 million principal amount, of which approximately $333.3 million principal amount were offered pursuant to one of the Company's public registration statements and $88.6 million principal amount were offered in private placements. During 1993, the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1993-C1 totaling approximately $451.0 million principal amount. In addition, Structured Asset Securities Corporation Trust III, a trust established by the Company, issued Collateralized Mortgage Obligations, Series 1993-C2 totaling approximately $121.3 million principal amount. Also during 1993, the Company issued, through a trust, $79.3 million of securities, collateralized by a mortgage, in a private placement. In December 1992, the Company purchased a 25% partnership interest in Structured Asset Securities Corporation Trust II ("Trust II"). The Company acted as general partner of Trust II. An affiliate of the Company owned the remaining 75% as limited partner. On May 28, 1993, Trust II's assets were sold to an affiliate of the Company at current market value. For financial reporting purposes, the assets of Trust II have been consolidated with those of the Company and minority interest has been established for the affiliate's limited partner interest.
ITEM 7 Management's Discussion and Analysis of Financial Condition and Liquidity and Capital Resources and Results of Operations (continued)
Trading revenues totaled $7,674,075 for the eleven months ended November 30, 1994 and $419,283 for the twelve months ended December 31, 1993. Trading revenues are attributable to the issuance and sale of securities and valuing financial instruments owned at market or fair value.
Interest income decreased from $8,611,171 during the twelve months ended December 31, 1993 to $5,868,153 during the eleven months ended November 30, 1994, attributable principally to the sale of interest earning securities owned during the second quarter of 1994. Management fees increased from $1,196,023 during the twelve months ended December 31, 1993 to $3,395,253 during the eleven months ended November 30, 1994, reflecting the increased trading and operating activities of the Company. Management fees are the principal component of general and administrative expenses in the accompanying Statements of Operations.
ITEM 8

ITEM 8 Financial Statements and Supplementary Data
The financial statements required by this Item and included in this Report are referenced in the index appearing on page.
ITEM 9

ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
PART III
ITEM 10

ITEM 10 Directors and Executive Officers of the Registrant
Pursuant to General Instruction J of Form 10-K, the information required by Item 10 is omitted.
ITEM 11

ITEM 11 Executive Compensation
Pursuant to General Instruction J of Form 10-K, the information required by Item 11 is omitted.
ITEM 12

ITEM 12 Security Ownership of Certain Beneficial Owners and Management
Pursuant to General Instruction J of Form 10-K, the information required by Item 12 is omitted.
ITEM 13

ITEM 13 Certain Relationships and Related Transactions
Pursuant to General Instruction J of Form 10-K, the information required by Item 13 is omitted.
PART IV
ITEM 14

ITEM 14 Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) (1) and (2) Financial Statements and Schedules
See Index to Financial Statements appearing on Page
(3) Exhibits
Not applicable.
(b) Reports on Form 8-K: None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
STRUCTURED ASSET SECURITIES CORPORATION (Registrant)
By: THEODORE P. JANULIS Theodore P. Janulis President
Date: February 23, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SIGNATURE .................... POSITION DATE
THEODORE P. JANULIS .......... President February 23, 1996 Theodore P. Janulis
DAVID GOLDFARB ............... Controller February 23, 1996 David Goldfarb
BRIAN R. ZIPP ................ Director February 23, 1996 Brian R. Zipp
MICHAEL J. O'HANLON .......... Chairman and Director February 23, 1996 Michael J. O'Hanlon
STRUCTURED ASSET SECURITIES CORPORATION
NOTES to FINANCIAL STATEMENTS
Report of Independent Auditors .......................................
Statements of Operations for the twelve months ended November 30, 1995, eleven months ended November 30, 1994 and twelve months ended December 31, 1993 ..................................................
Statements of Financial Condition as of November 30, 1995 and 1994 .........................................
Statements of Changes in Stockholder's Equity for the twelve months ended November 30, 1995, eleven months ended November 30, 1994 and twelve months ended December 31, 1993 ..............................
Statements of Cash Flows for the twelve months ended November 30, 1995, eleven months ended November 30, 1994 and twelve months ended December 31, 1993 ..................................................
Notes to Financial Statements ................................. to
Consent of Independent Auditors ......................................
Report of Independent Auditors
The Board of Directors and Stockholder of Structured Asset Securities Corporation
We have audited the accompanying statements of financial condition of Structured Asset Securities Corporation as of November 30, 1995 and November 30, 1994, and the related statements of operations, changes in stockholder's equity and cash flows for the year ended November 30, 1995, for the eleven-month period ended November 30, 1994 and for the year ended December 31, 1993. 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 audits 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, the financial statements referred to above present fairly, in all material respects, the financial position of Structured Asset Securities Corporation at November 30, 1995 and November 30, 1994, and the results of its operations and its cash flows for the year ended November 30, 1995, for the eleven month period ended November 30, 1994 and for the year ended December 31, 1993, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
January 10, 1996
STRUCTURED ASSET SECURITIES CORPORATION STATEMENTS of OPERATIONS
See notes to financial statements
STRUCTURED ASSET SECURITIES CORPORATION STATEMENTS of FINANCIAL CONDITION
ASSETS
See notes to financial statements
See notes to financial statements.
See notes to financial statements
STRUCTURED ASSET SECURITIES CORPORATION
NOTES to FINANCIAL STATEMENTS
1. Organization:
Structured Asset Securities Corporation ("the Company") is a limited-purpose finance corporation. All of the outstanding capital stock is owned by Lehman Commercial Paper Inc.("LCPI"), an indirect wholly owned subsidiary of Lehman Brothers Holdings Inc. ("Holdings").
The Company's activities consist of the issuance and sale of debt securities (the "Bonds") collateralized by mortgages and/or mortgage-backed securities or serving as the depositor for one or more trusts (the "Trust(s)") which will issue Pass-through Certificates, representing an undivided interest in such mortgage collateral.
The Company has filed registration statements on Form S-3 with the Securities and Exchange Commission which permit the Company to issue, from time to time, Bonds and Pass-through Certificates in principal amount not to exceed $11.7 billion. The Company has also filed registration statements on Form S-3 for the issuance of $6 billion principal amount of Bonds. During the twelve months ended November 30, 1995, the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-C1 totaling approximately $394.3 million principal amount, Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-3 totaling approximately $99.5 million principal amount, Structured Asset Securities Corporation Mortgage Pass-through Certificates, Series 1995-1 totaling approximately $73.2 million principal amount, Structured Asset Securities Corporation Mortgage Pass-through Certificates, Series 1995-2, Group II, totaling approximately $74.1 million principal amount, Structured Asset Securities Corporation Mortgage Pass-through Certificates, Series 1995-2, Group I, totaling approximately $174.2 million principal amount, LB Commercial Conduit Mortgage Trust Multiclass Pass-through Certificates, Series 1995-C2 totaling approximately $217.0 million principal amount, and Multiclass Pass-through Certificates, Series 1995-C4 totaling approximately $179.6 million principal amount. In addition, the Company issued Structured Asset Securities Corporation Multiclass Pass-through Certificates, Series 1995-C3 totaling approximately $322.8 million principal amount in a private placement. As of November 30, 1995, approximately $11.4 billion was available for issuance under the registration statements referred to above.
The Company has issued Bonds and acted as depositor for various Trusts which have issued Pass-through Certificates collateralized by mortgages and/or mortgage securities. The Company has surrendered to the Trusts all future economic interests in the Bonds, Pass-through Certificates and related collateral. According to the terms of the various Trust agreements, the security holders can look only to the related collateral for repayment of both principal and interest. In accordance with generally accepted accounting principles, the Bonds, Pass-through Certificates, and related collateral have been removed from the accompanying Statements of Financial Condition.
During the twelve months ended November 30, 1995, LCPI contributed $234.3 million in capital to the Company, and the Company made capital distributions to LCPI of $102.9 million.
The December 31, 1993 Statement of Operations includes the consolidated accounts of the Company and those of Structured Asset Securities Corporation Trust II ("Trust II"), a partnership in which the Company had a 25% ownership interest and acted as general partner. An affiliate of the Company owned the remaining 75% interest in Trust II as a limited partner. On May 28,
1. Organization (continued):
1993, Trust II's assets, which primarily consisted of approximately $99 million in mortgage loans, were sold to an affiliate of the Company at current market value. The accompanying December 31, 1993 Statement of Operations reflects the affiliate's minority interest share in earnings in Trust II.
2. Summary of Significant Accounting Policies:
Deferred registration costs:
Deferred registration costs relate to filing fees and other related costs paid by the Company in connection with filings for the registration of the securities which were or are to be issued by the Company. These costs are deferred in anticipation of future revenues upon the issuance of securities from the respective shelf that has been established. Amortization of the costs is based upon the percentage of issued securities to the respective shelf from which the securities are issued and is included as a component of trading revenue in the Statements of Operations.
Financial instruments owned, at fair value:
Financial instruments owned principally represent subordinated interests in pools of mortgage loans, with the remaining instruments representing the right to receive certain future interest payments on the underlying loans. Financial instruments owned are valued at market or fair value, as appropriate, with unrealized gains and losses reflected in trading revenue in the Statements of Operations. Market value is generally based on listed market prices. If listed market prices are not available, fair value is determined based on other relevant factors, including broker or dealer price quotations, and valuation pricing models which take into account time value and volatility factors underlying the financial instruments.
All securities transactions are recorded in the accompanying financial statements on a trade date basis.
Income taxes:
The Company is included in the consolidated U.S. federal income tax return of Holdings and in combined state and local returns with other affiliates of Holdings. The Company computes its income tax provision on a separate return basis in accordance with the terms of a tax allocation agreement between Holdings and its subsidiaries. The income tax provision is greater than that calculated by applying the statutory federal income tax rate principally due to state and local taxes.
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 amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates.
3. Investment in Collateralized Mortgage Obligation Trusts:
The investment consists of seventeen $10 deposits made with an owner trustee to establish the Trusts pursuant to deposit trust agreements.
4. Related Party Transactions:
In connection with the Company's activities, mortgage collateral is purchased from and recorded at an affiliate's carrying value, which for such broker/dealer affiliates represents market value.
Certain directors and officers of the Company are also directors and officers of Lehman Brothers Inc., LCPI and/or other affiliates of the Company.
Pursuant to a management agreement (the "Agreement"), the Company is charged a management fee for various services rendered on its behalf by LCPI. The Agreement provides for an allocation of costs based upon the level of activity processed by LCPI on behalf of the Company. Management fees of $5,407,152 for the twelve months ended November 30, 1995, $3,395,253 for the eleven months ended November 30, 1994 and $1,196,023 for the twelve months ended December 31, 1993 are the principal component of general and administrative expenses in the Statements of Operations. The Agreement is renewable each year unless expressly terminated or renegotiated by the parties.
Compensation expense represents amounts allocated to the Company by LCPI for compensation paid to certain common officers and directors of the Company.
Income taxes of $15,854,753 were paid by the Company to LCPI in accordance with the terms of the Company's tax allocation agreement during the twelve months ended November 30, 1995. No income taxes were paid by the Company during 1994 and 1993.
The Company believes that amounts arising through related party transactions, including the fees referred to above, are reasonable and approximate the amounts that would have been recorded if the Company operated as an unaffiliated entity.
5. Financial Instruments with Off-Balance Sheet Risk and Concentration of Credit Risk:
Certain of the Company's activities are principally conducted with financial institutions. At November 30, 1995, the Company had no material individual counterparty concentration of credit risk, or any financial instruments with off-balance sheet risk.
6. Fair Value of Financial Instruments:
Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosures About Fair Value of Financial Instruments", requires disclosure of the fair values of most on- and off-balance sheet financial instruments, for which it is practicable to estimate that fair value. The scope of SFAS No. 107 excludes certain financial instruments, such as trade receivables and payables when the carrying value approximates the fair value, employee benefit obligations and all non-financial instruments, such as fixed assets. The fair value of the Company's assets and liabilities which
6. Fair Value of Financial Instruments (continued):
qualify as financial instruments under SFAS No. 107 approximate the carrying amounts presented in the Statements of Financial Condition.
Financial instruments owned principally represent subordinated interests in pools of mortgage loans, with the remaining instruments representing the right to receive certain future interest payments on the underlying loans. These financial instruments are generally non-rated or rated as non-investment grade by recognized rating agencies. Changes in interest rates could potentially have an adverse impact on the future cash flows for financial instruments owned. In addition, for certain securities, defaults on the mortgage loans underlying these instruments could have a greater than proportional impact on their fair value since the payments of principal and interest are subordinate to other securities issued in the same series. These risks, among other risks, are incorporated in the determination of fair value of financial instruments owned.
7. Change of Fiscal Year-End:
During 1994, the Company changed its fiscal year-end from December 31 to November 30. Such a change to a non-calendar cycle shifts certain year-end administrative activities to a time period that conflicts less with the business needs of institutional customers.
The following is selected financial data for the eleven-month transition period ending November 30 and the comparable prior year period:
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements (Form S-11 Nos. 33-11126, 33-13826, 33-31337, 33-13986, 33-17503 and 33-48771 and Form S-3 File Nos. 33-43825 and 33-50210) of Structured Asset Securities Corporation of our report dated January 10, 1996, with respect to the financial statements of Structured Asset Securities Corporation included in this Annual Report (Form 10-K) for the year ended November 30, 1995.
New York, New York ERNST & YOUNG LLP February 23, 1996


ITEM 1. BUSINESS General
CFI Industries, Inc. (the "Company" or "CFI") , a Delaware corporation, is a fully integrated custom thermoformer of plastic packaging for the hospital/medical, consumer products, electronics and cosmetics markets.
The Company designs, markets and manufactures functional and innovative packaging for its customers through its wholly owned subsidiary, Plastofilm Industries, Inc. ("Plastofilm"). For a discussion of other operations which the Company sold in prior years see "Operations Sold in Prior Years" located elsewhere in this business section.
The Company's and Plastofilm's executive offices are located at 935 W. Union Avenue, Wheaton, Illinois 60187 and its telephone number is (708) 668-2838. The Company was organized in 1972.
Operations
Plastofilm produces custom thermoformed packaging, point of purchase displays and a variety of disposable packaging products for the hospital/medical, consumer products, electronics and cosmetics industries. Most applications involve design of custom molds or dies by Plastofilm's design and engineering departments.
The Company's primary production process includes the extrusion of purchased plastic resins into roll stock, thermoforming roll stock into finished product and performing various secondary operations such as punching, assembly, sealing and packaging. Production equipment includes extruders and thermoforming machines. A Class 100,000 clean room is maintained for the production of certain medical and electronic packaging products. Support for production include a computer aided design equipment based staff, a production tool design and maintenance shop, and a prototype model shop.
Manufacturing is conducted in two facilities. An owned 120,000 square foot manufacturing facility in Wheaton, Illinois includes four extrusion lines and sixteen thermoforming machines, including the Class 100,000 clean room operation. A leased 40,000 square foot production facility in Sparks, Nevada, started in June, 1992, includes four thermoforming machines.
Plastofilm has a nation-wide customer base, the majority of which are located in the Midwest and West. A majority of its customers are in the hospital/medical, consumer products, electronics and cosmetics markets. Plastofilm markets its products primarily through its own national sales force who are supported by the design and product development team and the customer service organization located in Wheaton, Illinois. The Sparks, Nevada facility products for the West Coast market and allows Plastofilm to more effectively compete against other West Coast plastic thermoformers. Expansion of this Strategy will be evaluated in 1996 to include production facilities in Texas and Puerto Rico to meet the growing business opportunities in these regions.
Plastofilm's customers are continuing to become more directed to oversee product development. To serve this product migration the Company is pursuing the establishment of production capability in Ireland. This facility will support sales to the entire European Economic Community.
During fiscal years 1995, 1994 and 1993, sales to Baxter International, Inc. and its affiliates accounted for approximately 17%, 16% and 12%, respectively, of the total net sales of the Company.
Plastofilm purchases its raw material in roll stock and pellet form from several suppliers and an adequate supply of raw material is available. Plastofilm also recycles most of its scrap plastic by regrinding and reprocessing it. During fiscal 1995 and 1994, the Company experienced price increases for its purchased plastic resins. In accordance with its standard selling terms and conditions, the Company has increased the price of its products to reflect this increased cost.
Operations Sold in Prior Years
From June 1989 to April 1991, the Company also manufactured thermoformed packaging products for the food service industry through its indirect wholly owned subsidiary, Form-Fit, Inc. ("Form-Fit"), which was acquired June 8, 1989. On April 15, 1991, the Company sold 100% of the capital stock of Form-Fit to Detroit Forming, Inc. ("Detroit Forming") and entered into a noncompetition agreement with Detroit Forming for an aggregate purchase price of $3.9 million.
Competition
Plastofilm operates in a highly competitive industry. The Company estimates that there are approximately 750 companies engaged in the production of thermoformed plastic packaging, the great majority of which are smaller than Plastofilm. The Company believes its principal competitive strengths include its design abilities, its manufacturing facilities and equipment, a reputation for quality thermoforming derived from more than 50 years in the plastic thermoforming industry and its in-house extrusion capabilities which allow it to maximize material utilization and provide rapid response time to customer requirements.
Government Regulation
The Company's plastic thermoforming operations are not subject to any comprehensive federal laws or regulations which relate specifically to such activities. However, in the past ten years, certain municipalities have passed laws which regulate the chemical properties (such as recyclability or biodegradability) of plastic packaging products. To date, these laws have not had any adverse affect on the Company's operations.
Backlog
Order backlog for thermoformed plastic products was approximately $7.1 million at June 30, 1995 and $6.8 million at June 26, 1994.
Employees
As of June 30, 1995, the Company employed approximately 250 persons. The Company believes that it has good relations with its employees.
ITEM 2.

ITEM 2. PROPERTIES
Plastofilm's administrative headquarters and principal manufacturing operations are located in an owned facility in Wheaton, Illinois, a leased warehouse facility in Batavia, Illinois, and a second manufacturing operation, located in leased facilities in Sparks, Nevada, which services customers located on the West Coast. Current plans anticipate additional facilities in Ireland, Puerto Rico and Texas. This expanded operating base will enable the Company to better serve its present base of multinational customers.
Testing has revealed soil conditions at Plastofilm's Wheaton, Illinois facility which require remediation. During fiscal 1993 the Illinois Environmental Protection Agency ("IL-EPA") requested certain additional testing to be performed before approval of the Company's voluntary clean-up plan. These tests were conducted in fiscal 1994 and submitted to the IL-EPA in Fiscal 1995 for approval. The approval of the Company's voluntary clean-up plan is pending. (See Note 10 to the Consolidated Financial Statements.)
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of business, the Company and its subsidiaries may from time to time be involved as plaintiffs or defendants in various legal proceedings. It is the opinion of the Company, based in part upon the advice of its counsel, that any lawsuits not provided for in the Consolidated Financial Statements are either without merit, are covered by insurance, or are otherwise of such a nature that their ultimate disposition will not be material in relation to the Company's consolidated results of operations or financial position.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is traded over-the-counter, listed and quoted on the NASDAQ National Market System under the symbol CFIB. The following table sets forth, for the fiscal quarters indicated, the high and low sales prices per share of the Company's common stock:
There were approximately 1,900 record holders of the Company's common stock at August 31, 1995.
The Company has not paid dividends on its common stock since its organization and has no current intention to pay dividends.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Data for the fiscal year ended June 30, 1995 is not comparable to data for prior years due to:
1. Operating (Loss) for 1994 excludes non-recurring severance costs of $370,000.
2. 1992 and 1991 Net (Loss) included a provision for soil remediation of $1.0 million in each year.
3. 1991 results included the operations of Form-Fit until date of sale (April 15, 1991).
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The Company manufactures and markets thermoformed plastic products.
Sales of thermoformed plastic products were $31.3 million in fiscal 1995, compared to $28.7 million and $30.2 million in fiscal 1994 and 1993, respectively. The sales increase in fiscal 1995 was a result of increased demand in the medical supply market, the Company's principal market. The sales decrease in fiscal 1994 as compared to fiscal 1993 was a result of depressed conditions in the medical supply market.
The gross profit percentage was 25.9% in fiscal 1995, compared to 23.0% and 21.9% in fiscal 1994 and 1993, respectively. The increase in gross profit for fiscal 1995 over 1994 and fiscal 1994 over 1993 was due to reductions in direct labor costs and continued improvements in operating efficiencies.
Selling expenses were $4.0 million in fiscal 1995, compared to $4.2 million and $4.1 million in fiscal 1994 and 1993, respectively. The decrease in fiscal 1995 as compared to fiscal 1994 and 1993 was primarily due to labor cost reductions.
General and administrative expenses were $2.3 million, $2.2 million and $2.5 million in fiscal 1995, 1994 and 1993, respectively. The decreases in fiscal 1995 and 1994 as compared to fiscal 1993 were primarily due to reductions in personnel and the impact of cost savings programs.
Operating income for fiscal 1995 was $1.8 million as compared to losses of $216,000 and $49,000 in fiscal 1994 and 1993, respectively. Included in the operating loss for fiscal 1994 was $370,000 of non-recurring severance costs. The $1.65 million improvement in operating income, after adjustment for the non-recurring severance costs, was a result of increased gross margins due to higher sales volume, increased operating efficiencies and the impact of ongoing cost reduction programs. The reduction in operating losses of $203,000, after adjustment for non-recurring severance costs, for fiscal 1994 as compared to 1993 was a result of increased operating efficiencies.
Net interest expense was $0.4 million in fiscal 1995 and 1994 compared to $0.2 million in fiscal 1993. The increase in fiscal 1995 and 1994 over 1993 was principally due to higher average debt levels, higher interest rates and reduced cash and marketable securities balances resulting in lower interest income.
During fiscal 1991 soil conditions at Plastofilm's Wheaton, Illinois facility were discovered which need remediation. At June 30, 1991 a pre-tax provision of $1.0 million was recorded for the estimated costs of testing and remediation. Fiscal 1992 expenditures for testing and remediation were approximately $535,000. At June 28, 1992, an additional pre-tax provision of $1.0 million was recorded to reflect the then currently estimated costs to complete the soil remediation. Expenditures during fiscal 1995, 1994 and 1993 were approximately $78,000, $67,000 and $127,000, respectively. During fiscal 1993, the Illinois Environmental Protection Agency requested certain additional testing be performed before approval of the Company's voluntary clean-up plan. These tests were conducted in fiscal 1994 and submitted to the Illinois Environmental Protection Agency in fiscal 1995 for approval. The approval of the Company's voluntary clean-up plan is pending.
Order backlog for thermoformed plastic products was $7.1 million at June 30, 1995 as compared to $6.8 million at June 26, 1994 and $7.6 million at June 27, 1993. The decrease in backlog at June 26, 1994 as compared to June 27, 1993 was a reflection of shortening lead times between customer's orders and shipments.
Liquidity and Capital Resources
Working capital and related current ratios are shown in the following table (amounts in thousands):
Working capital of $2,073,000 at June 30, 1995 was up $1,804,000 from the prior year end. The increase in net working capital was primarily attributable to a reduction in short-term debt and an increase in deferred tax benefits. Working capital of $269,000 at June 26, 1994 was down $879,000 from the prior year as a result of using short-term debt to finance capital expenditures.
Expenditures for replacement and refurbishment of property and equipment were $0.9 million in each of the last three fiscal years. Principal expenditures for fiscal 1995 included the upgrade of manufacturing equipment and management information systems. The majority of the fiscal 1995 expenditures were financed through borrowings under Plastofilm's capital expenditure line and operating cash flow. The 1994 and 1993 capital expenditures were financed through draws on Plastofilm's short-term credit facility. As of June 30, 1995, there was $1.7 million available under Plastofilm's short-term credit facility and $0.5 million under Plastofilm's capital expenditure facility. The Company was in compliance with the covenants of its credit agreement.
Plastofilm's liquidity and capital needs through fiscal 1996 include the anticipated establishment of additional production facilities in east central Texas and Northern Ireland, the upgrade and replacement of existing equipment, as well as to finance the soil remediation expenditures at its Wheaton, Illinois facility. The funds required to finance these items are expected to be provided by operating cash flow, the Company's existing credit facilities grants which are expected to be made available from the Industrial Development Board of Northern Ireland and/or from other credit facilities which may become available to the Company.
The Company has received a demand for payment of withdrawal liability in the amount of approximately $360,000 from a multi-employer pension plan to which the Company made contributions in connection with a discontinued business. The Company disputes that it has any withdrawal liability to the plan and, in accordance with the applicable provisions of the Employee Retirement Income Security Act, has demanded that this dispute be resolved through arbitration. The Company is making quarterly contributions of approximately $10,000 as required by law pending arbitration. Through June 30, 1995, the Company has made payments of approximately $95,000. These payments will be returned to the Company, with interest, if it is ultimately determined that the Company has no liability.
The Company, in connection with a discontinued business, has been named by the United States Environmental Protection Agency ("US-EPA") as a potentially responsible party in a Superfund Proceeding. The US-EPA has determined the Company to be a de minimus contributor and has offered a settlement agreement to all de minimus parties. The Company has accepted the settlement agreement which will require total payments of $80,586, which will be made in two equal installments on January 16, 1996 and July 16, 1996.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
All other schedules have been omitted because they are inapplicable, not required or the information is included in the financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CFI INDUSTRIES, INC. WHEATON, ILLINOIS
We have audited the accompanying consolidated balance sheets of CFI Industries, Inc. and subsidiaries as of June 30, 1995 and June 26, 1994, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended June 30, 1995. Our audits also included the financial statement schedules listed in the Index at Item 8. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules 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 CFI Industries, Inc. and subsidiaries at June 30, 1995 and June 26, 1994, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 1995 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
Deloitte & Touche LLP Chicago, Illinois August 23, 1995
CFI INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1995 AND JUNE 26, 1994 (AMOUNTS IN THOUSANDS, EXCEPT COMMON SHARE AMOUNTS)
The accompanying notes are an integral part of these consolidated financial statements.
CFI INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED JUNE 30, 1995, JUNE 26, 1994 AND JUNE 27, 1993 (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The accompanying notes are an integral part of these consolidated financial statements.
CFI INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED JUNE 30, 1995, JUNE 26, 1994 AND JUNE 27, 1993 (AMOUNTS IN THOUSANDS)
The accompanying notes are an integral part of these consolidated financial statements.
CFI INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 1995, JUNE 26, 1994 AND JUNE 27, 1993 (AMOUNTS IN THOUSANDS)
The accompanying notes are an integral part of these consolidated financial statements.
CFI INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1995, JUNE 26, 1994 AND JUNE 27, 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR -- The Company's fiscal year ends on the last day in June. Prior to fiscal 1995 the Company's fiscal year ended the last Sunday in June.
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the accounts of CFI Industries, Inc. and subsidiaries (the "Company" or "CFI"). All significant intercompany accounts and transactions have been eliminated.
MARKETABLE SECURITIES -- Marketable securities, which were carried at the lower of cost or market, consisted of a mutual fund invested primarily in 100% government backed mortgage securities. Unrealized losses on such securities in fiscal 1994 of $77,000 were offset against interest income.
REVENUE RECOGNITION -- Revenue from product sales is recognized at the time the product is shipped.
INVENTORIES -- Inventories, which consist of roll stock and pelletized or thermoformed plastics, are carried at the lower of cost or net realizable value using the first-in, first-out or weighted average cost methods. Cost includes raw material, labor and manufacturing overhead.
Inventories at June 30, 1995 and June 26, 1994 consisted of the following (amounts in thousands):
DEPRECIATION -- Depreciation for financial reporting purposes is provided by using the straight-line method based upon the estimated useful lives of the assets as follows: buildings, 10 to 40 years; equipment, 3 to 20 years; and furniture and fixtures, 4 to 10 years.
INTANGIBLE ASSETS -- Intangible assets consist of goodwill, the cost in excess of net asset value of an acquired business, which is being amortized on a straight-line basis over a period of 40 years. The Company reviews the recoverability of goodwill based upon anticipated future operating results, on a nondiscounted basis, of the acquired business compared with the scheduled goodwill amortization.
CALCULATION OF NET INCOME (LOSS) PER COMMON SHARE -- The number of shares used in the net income (loss) per common share calculation is the weighted average number of shares of common stock and common stock equivalents outstanding during each period. Common stock equivalents, in the form of stock options, have been included in the fiscal 1995 calculation of weighted average shares outstanding using the treasury stock method. There were no common stock equivalents included in the calculation of net loss per common share for fiscal 1994 and 1993 as outstanding options were antidilutive during such periods.
STATEMENTS OF CASH FLOWS -- For purposes of the Statements of Cash Flows, the Company considers all highly liquid investment instruments purchased with a maturity of three months or less to be cash equivalents.
2. TRANSACTIONS WITH RELATED PARTIES
For fiscal 1995, 1994 and 1993, the Company paid $23,000, $32,000 and $20,000, respectively, for legal services rendered by Rosenberg & Liebentritt, P.C., a law firm whose two shareholders are members of the Company's Board of Directors. The Company believes that these fees are no less favorable than could be obtained from an outside party.
In addition, individuals and companies affiliated with Equity Group Investments, Inc. ("EGI"), a related party, provide services to the Company and its subsidiaries relating to corporate planning, tax advice and other matters. Amounts paid to EGI or its affiliates for such services in fiscal 1995, 1994 and 1993 were $46,000, $69,000 and $42,000, respectively. The Company believes that these fees are no less favorable than could be obtained from an outside party.
3. PROPERTY AND EQUIPMENT
Components of property and equipment at June 30, 1995 and June 26, 1994 were as follows (amounts in thousands):
Included in the above amounts are items under capitalized leases as follows (amounts in thousands):
Maintenance and repair expense during fiscal 1995, 1994 and 1993 was $1.7 million, $1.7 million and $1.6 million, respectively.
4. SHORT-TERM DEBT
Plastofilm Industries, Inc. ("Plastofilm"), a wholly owned subsidiary of the Company, has a secured loan agreement (the "Agreement") with a financial institution pursuant to which it has borrowings under a revolving line of credit, a term loan and a capital expenditure line. The Agreement is secured by substantially all of Plastofilm's assets. (See Note 5.)
The $2.5 million line of credit bears interest at the prime rate plus 1/4% (9.25% at June 30, 1995) and is renewable at the option of such financial institution on November 30, 1995. Plastofilm anticipates that this line of credit will be renewed. During the fiscal year ended June 30, 1995, maximum borrowings under this line were $2.0 million and borrowings under this line at June 30, 1995 were $0.8 million. During the fiscal year ended June 26, 1994, Plastofilm's line of credit was $2.0 million, maximum borrowings under this line were $2.0 million and $2.0 million was outstanding at June 26, 1994. Average borrowings were $1,625,000 and $1,643,000 for the fiscal years ended June 30, 1995 and June 26, 1994, respectively. The weighted average interest rate was 8.61% in fiscal 1995 and 6.46% in fiscal 1994.
5. LONG-TERM DEBT
Long-term debt consisted of the following as of June 30, 1995 and June 26, 1994 (amounts in thousands):
The long-term debt matures as follows: $742,000 in 1996, $1,687,000 in 1997, $326,000 in 1998, $96,000 in 1999, $96,000 in 2000 and $24,000 thereafter.
The Agreement between Plastofilm and its lender restricts the transfer of funds between Plastofilm and the Company through the imposition of tangible net worth requirements, debt to equity ratios and cash flow requirements. As a result of these restrictions, approximately 75% of the consolidated net assets of Plastofilm were restricted from being transferred to the Company as of June 30, 1995.
6. COMMITMENTS
The Company and its subsidiaries lease certain facilities and equipment under various lease agreements. Total minimum commitments payable under these leases at June 30, 1995 were (amounts in thousands):
Rent expense for operating leases was $364,000, $279,000 and $305,000 for fiscal 1995, 1994 and 1993, respectively.
7. INCOME TAXES
The provision (benefit) for income taxes was as follows:
The income tax benefit differed from the federal statutory rate as detailed below (amounts in thousands):
At June 30, 1995 and June 26, 1994 the components of deferred income taxes were as follows (amounts in thousands):
A valuation reserve is provided to reduce the deferred tax assets to a level which management expects will be realized in the future. The valuation reserve for deferred tax assets as of June 26, 1994 was $3,715,000. The net change in the total valuation reserve for the year ended June 30, 1995 was a decrease of $1,033,000. Of this amount $457,000, resulted from the utilization of $487,000 of net operating loss carryforwards net of $30,000 of alternative minimum tax credits generated. The remaining $576,000 decrease resulted primarily from the Company's reevaluation of the realizability of future income tax benefits based on the Company's increased future profit expectations and improving business conditions.
At June 30, 1995, for income tax purposes the Company had net operating loss carryforwards of $6.7 million and general business credits carryforwards of $.7 million. The net operating loss carryforwards expire in years 2001 to 2009; the general business credits carryforwards expire in years 1999 and 2000.
8. EMPLOYEE RETIREMENT PLANS
Until December 31, 1991, Plastofilm had a non-contributory profit sharing plan and a non-contributory pension plan. On November 12, 1991, the Board of Directors of Plastofilm adopted a resolution to curtail future benefit accruals in both plans as of December 31, 1991 and effective May 31, 1995 the pension plan was terminated. The pension plan obligation was not settled as of June 30, 1995. The settlement is not expected to have a material effect on the fiscal 1996 financial statements. The vested benefits in the profit sharing plan were placed in a new cash or deferred arrangement pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"), the Plastofilm Employee Savings Plan ("Savings Plan"), which became effective on January 1, 1992.
The Savings Plan is for all employees. Plastofilm's contributions to the savings plan are at the discretion of Plastofilm's Board of Directors. It is currently Plastofilm's policy to contribute from 1% to 3% of each participant's compensation by matching 50% of employee voluntary salary deferrals of the first 6% of an employee's salary. A participant's contribution may not exceed 15% of annual compensation, or the maximum amount allowable as determined by the Code, if less than 15% of compensation. The amounts expensed under the Savings Plan for fiscal 1995, 1994 and 1993 were $238,000, $252,000 and $208,000, respectively.
Plastofilm's net periodic pension credit included the following components (amounts in thousands):
The funded status of Plastofilm's retirement plan at June 30, 1995 and June 26, 1994 was as follows (amounts in thousands):
In determining the net periodic pension credit, the weighted average discount rate used was 6.5% in fiscal 1995 and 6.0% in fiscal 1994 and 1993. The weighted average expected long-term rate of return on assets was 7.50% in fiscal 1995 and 1994 and 6.75% in fiscal 1993.
9. STOCK OPTIONS
The Company had originally reserved 100,000 shares of its common stock for issuance to Directors, officers, key employees and consultants of the Company through incentive stock options, non-qualified stock options and stock appreciation rights to be granted under the Company's 1991 Stock Option Plan (the "Plan"). In April 1994, the Company's Board of Directors approved a proposed amendment to the Company's Plan which would increase the number of common shares issuable upon exercise of stock options by 500,000 common shares. The proposed amendment was approved by stockholders at the Company's Annual Meeting of Stockholders held on December 6, 1994. The plan is administered by the Compensation Committee (the "Committee") consisting of three members of the Board of Directors. The option price is determined by the Committee, but cannot be less than the fair market value of the common stock of the Company at the date of grant. The options generally vest, in equal cumulative installments, after three years and expire ten years after the date of grant.
Transactions involving the plan are summarized as follows:
Included in the fiscal 1994 options outstanding and exercisable were 172,000 shares and 100,000 shares, respectively, which were subject to stockholder approval.
10. CONTINGENT LIABILITIES
During fiscal 1991 soil conditions at Plastofilm's Wheaton, Illinois facility were discovered which need remediation. At June 30, 1991, a pre-tax provision of $1.0 million was recorded for the estimated costs of testing and remediation. Fiscal 1992 expenditures for testing and remediation were approximately $535,000. At June 28, 1992, an additional pre-tax provision of $1.0 million was recorded to reflect the then currently estimated costs to complete the soil remediation. Expenditures during fiscal 1995, 1994 and 1993 for testing and remediation were approximately $78,000, $67,000 and $127,000, respectively. During fiscal 1993 the Illinois Environmental Protection Agency requested certain additional testing to be performed before approval of the Company's voluntary clean-up plan. These tests were conducted in fiscal 1994 and submitted to the Illinois Environmental Protection Agency in fiscal 1995 for approval. The approval of the Company's voluntary clean-up plan is pending.
The Company has received a demand for payment of withdrawal liability in the amount of approximately $360,000 from a multi-employer pension plan to which the Company made contributions in connection with a discontinued business. The Company disputes that it has any withdrawal liability and, in accordance with the applicable provisions of the Employee Retirement Income Security Act, has demanded that this dispute be resolved through arbitration. The Company is making quarterly contributions of approximately $10,000 as required by law pending arbitration. Through June 30, 1995 the Company has made payments of approximately $95,000. These payments will be returned to the Company, with interest, if it is ultimately determined that the Company has no liability.
The Company, in connection with a discontinued business, has been named by the United States Environmental Protection Agency ("US-EPA") as a potentially responsible party in a Superfund Proceeding. The US-EPA has determined the Company to be a de minimus contributor and has offered a settlement agreement to all de minimus parties. The Company has accepted the settlement agreement which will require total payments of $80,586. Payments will be made in two equal installments on January 16, 1996 and July 16, 1996. The settlement amount has been provided for in the financial statements.
11. MAJOR CUSTOMERS
During fiscal years 1995, 1994 and 1993, net sales to Baxter International, Inc. and its affiliates accounted for approximately $5.2 million (17%), $4.6 million (16%) and $3.6 million (12%), respectively, of the total net sales of the Company.
SCHEDULE I CFI INDUSTRIES, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) BALANCE SHEETS (AMOUNTS IN THOUSANDS)
SCHEDULE I CFI INDUSTRIES, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) STATEMENTS OF OPERATIONS AND DEFICIT (AMOUNTS IN THOUSANDS)
SCHEDULE I CFI INDUSTRIES, INC. CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY) STATEMENTS OF CASH FLOWS (AMOUNTS IN THOUSANDS)
SCHEDULE II CFI INDUSTRIES, INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED JUNE 30, 1995, JUNE 26, 1994 AND JUNE 27, 1993 (AMOUNTS IN THOUSANDS)
PART III
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEMS 10, 11, 12 AND 13. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT, MANAGEMENT REMUNERATION AND TRANSACTIONS, SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by Item 10, Item 11, Item 12

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(b) Reports on Form 8-K: None
Pursuant to the requirements of Section 13 or 15(d) 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.
CFI Industries, Inc. (Registrant)
Date: 9/28/95 By: /s/ Robert W. George Robert W. George Principal Executive Officer
Date: 9/28/95 By: /s/ Robert W. Zimmer Robert W. Zimmer, Treasurer Principal Financial and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and the capacities and on the dates indicated:


ITEM 3. LEGAL PROCEEDINGS.
No material legal proceedings are pending other than routine litigation incidental to the business of the Company. The company believes that such proceedings will not have any material adverse effect on it or its operations.
ITEM 4.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to shareholders during the last quarter of the fiscal year.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
(a)The principal market for the Certificates is the over the counter market.
(b)As of March 15, 1996 there were:
ITEM 9.

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND FORM 8-K.
(a)The Annual Statement of compliance and Independent Accountant's Annual Servicing Report are attached.
(b)Reports on Form 8-K.
DATES ITEMS REPORTED FINANCIAL STATEMENTS FILED
01/09/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
02/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
03/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
04/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
05/08/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
06/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
07/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
08/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
09/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
10/09/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
11/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
12/07/95 Chemical Bank, as Trustee, made the monthly None distribution to the holders of the Vanderbilt Mortgage and Finance, Inc. Manufactured Housing Senior/Subordinated certificates, Series 1995-A.
(c) 3.1 *,** Articles of Incorporation
3.2 *,** By-Laws
4.1 ** Pooling and Servicing Agreement, including form of Certificates
4.2 * Form of Limited Guarantee
* Previously filed pursuant to Registration Statement on form S-3 (Commission file number 33-80304) and incorporated by reference thereto.
** Previously filed pursuant to form 8-K, dated February 24,1995, and incorporated by reference thereto.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) 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, in the City of Knoxville, State of Tennessee, on March 15, 1996.
Vanderbilt Mortgage and Finance, Inc.
By:/s/Kevin C. Clayton Kevin C. Clayton President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.
s/Kevin C. Clayton March 15, 1996 President (Principal Executive Officer and Director)
s/David R. Jordan March 15, 1996 Controller, Acting Principal Financial Officer (Principal Accounting Officer)
s/Joseph H. Stegmayer March 15, 1996 Executive Vice President and Director
s/James L. Clayton March 15, 1996 Director