-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SxitcM+KSbcg1hXNjmg7UT49uuRvpj+VHQ6CzP+arMzWw32iM650n34VuNPxwGjf ocJU5e9lqbb8fJESdmbSmw== 0000012779-98-000011.txt : 19981109 0000012779-98-000011.hdr.sgml : 19981109 ACCESSION NUMBER: 0000012779-98-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLUE RIDGE REAL ESTATE CO CENTRAL INDEX KEY: 0000012779 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 240854342 STATE OF INCORPORATION: PA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-02844 FILM NUMBER: 98739608 BUSINESS ADDRESS: STREET 1: PO BOX 707 CITY: BLAKESLEE STATE: PA ZIP: 18610 BUSINESS PHONE: 7174438433 MAIL ADDRESS: STREET 1: PO BOX 707 CITY: BLAKESLEE STATE: PA ZIP: 18610 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from.......... to.......... Blue Ridge 0-28-44 Commission File No.: Big Boulder 0-28-43 BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION State or other jurisdiction of incorporation or organization: Pennsylvania 24-0854342 (Blue Ridge) I.R.S. Employer Identification Number: 24-0822326 (Big Boulder) Address of principal executive office: Blakeslee,Pennsylvania Zip Code: 18610 Registrant's telephone number, including area code: (717)-443-8433 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES___X____ NO__________ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period of this report: Class Outstanding at September 30, 1998 Common Stock, without par value, 1,976,958 stated value $.30 per combined share* *Under a Security Combination Agreement between Blue Ridge Real Estate Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder") (referred to as the "Corporations") and under the by-laws of the Corporations, shares of the Corporations are combined in unit certificates, each certificate representing the same number of shares of each of the Corporations. Shares of each Corporation may be transferred only together with an equal number of shares of the other Corporation. For this reason, a combined Blue Ridge/Big Boulder Form 10-Q is being filed. Except as otherwise indicated, all information applies to both Corporations. INDEX PAGE NO. PART I - FINANCIAL INFORMATION Item 1-Financial Statements Combined Condensed Balance Sheets September 30, 1998 and March 31, 1998 1 & 2 Combined Condensed Statements of Operations - Three Months and Six Months ended September 30, 1998 and 1997 3 Combined Condensed Statements of Cash Flows - Six Months Ended September 30, 1998 and 1997 4 Notes to Financial Statements 5 Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations 6 & 7 PART II - OTHER INFORMATION 7 Signatures 8 BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES COMBINED CONDENSED BALANCE SHEETS [CAPTION] ASSETS September 30, March 31, 1998 1998 (UNAUDITED) Current Assets Cash and cash equivalents (all funds are interest bearing 225,987 $2,799,777 Accounts receivable 353,269 230,482 Refundable income taxes 0 8,614 Inventories 219,192 221,210 Prepaid expenses, principally insurance and real estate taxes 380,031 485,513 Deferred operating costs-net of deferred revenue-ski facilities 3,444,606 0 Total current assets 4,623,085 3,745,596 Other non-current assets 36,797 36,797 Properties: Land, principally unimproved 1,867,655 1,867,738 Land improvements, buildings and equipment 49,296,594 48,907,191 51,164,249 50,774,929 Less accumulated depreciation and amortization 31,947,500 30,977,716 19,216,749 19,797,213 $23,876,631 $23,579,606 See accompanying notes to unaudited financial statements.
LIABILITIES AND SHAREHOLDERS' EQUITY [CAPTION] September 30, March 31, 1998 1998 (UNAUDITED) Current Liabilities: Notes Payable-Line of Credit $ 500,000 $ 0 Current installments of long-term debt 459,502 457,503 Accounts and other payables 262,649 436,941 Accrued claims 99,441 78,423 Deferred revenue 292,746 236,598 Accrued income taxes 53,765 267,885 Accrued liabilities 648,478 559,575 Total current liabilities 2,316,581 2,036,925 Long-term debt, less current installments 8,668,141 8,833,406 Deferred income taxes 2,426,929 2,295,417 Commitments and Contingencies Combined shareholders' equity: Capital Stock, without par value, stated value $.30 per combined share, Blue Ridge and Big Boulder each have authorized 3,000,000 shares and each have issued 2,198,148 shares as of June 30,1998 and as of March 31, 1998 659,444 659,444 Capital in excess of stated value 1,461,748 1,461,748 Earnings retained in the business 9,843,245 9,629,902 11,964,437 11,751,094 LESS: Cost of 221,190 & 206,134 shares of capital stock in treasury as of September 30, 1998 & March 31,1998 respectively. 1,499,457 1,337,236 10,464,980 10,413,858 $23,876,631 $23,579,606 See accompanying notes to unaudited financial statements.
BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES BIG BOULDER CORPORATION and SUBSIDIARIES COMBINED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) [CAPTION] Three Months Ended Six Months Ended Sept.30, Sept. 30, Sept. 30, Sept. 30, 1998 1997 1998 1997 Revenues: Ski operations $ 0 $ 0 $ 0 $ 0 Real estate management 2,045,323 1,807,326 3,121,569 2,819,765 Rental income 455,066 363,800 842,359 853,593 2,500,389 2,171,126 3,963,928 3,673,358 Costs and expenses: Ski operations 0 0 0 0 Real estate management 1,480,446 1,378,976 2,505,842 2,371,620 Rental operations 221,280 136,944 458,792 378,738 General & administra- tive expenses 240,471 253,454 563,068 523,391 1,942,197 1,769,374 3,527,702 3,273,749 Income from operations 558,192 401,752 436,226 399,609 Other income (expense:) Interest & other income 20,400 12,066 64,643 31,944 Interest expense (178,925) (173,552) (355,307) (410,645) (158,525) (161,486) (290,664) (378,701) Income before income taxes & extraordinary item 399,667 240,266 145,562 20,908 Provision for income Taxes 159,865 96,106 58,224 8,363 Income before extraordinary item 239,802 144,160 87,338 12,545 Extraordinary item-assets contributed from sewer line construction net of income taxes of $70,190 126,005 0 126,005 0 Net income $365,807 144,160 $213,343 $ 12,545 Basic earnings per weighted average combined share: Before extraordinary item $0.12 $0.07 $0.04 $0.01 Extraordinary item 0.06 .00 0.07 .00 Net income $0.18 $0.07 $0.11 $0.01 Diluted earnings per weighted average combined share: Before extraordinary item $0.12 $0.07 $0.04 $0.01 Extraordinary item 0.06 .00 0.07 .00 Net income $0.18 $0.07 $0.11 $0.01
BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION and SUBSIDIARIES COMBINED CONDENSED STATEMENT OF CASH FLOWS FOR SIX MONTHS ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30 1997 (UNAUDITED) [CAPTION] 1998 1997 Cash Flows from Operating Activities: Net income (loss) $ 213,343 $ 12,545 Adjustments to reconcile net income to net cash used in operating activities: Extraordinary item (126,005) 0 Depreciation and amortization 300,523 378,087 Deferred income taxes 131,512 8,363 Deferred revenue 56,148 18,150 Changes in assets and liabilities: Accounts & other receivables (122,787) 274,422 Refundable income taxes 8,614 23,146 Prepaid expenses and other current assets (cash) (2,617,657) (2,301,839) Accounts payable & accrued liabilities (64,371) (265,845) Accrued income taxes (214,120) (114,940) Net cash used in operating activities $(2,434,800) $(1,967,911) Cash Flows (used in) from Investing Activities: Additions to intangible assets 0 (101,631) Disposition of land 83 0 Contributed assets - sewer line construction 126,005 0 Additions to properties (439,591) (738,971) Net cash used in investing activities $(313,503) $ (840,602) Cash flows (used in) from Financing Activities: Purchase of treasury stock (162,221) (81,003) Proceeds from notes payable, bank 500,000 700,000 Payment of long-term debt (163,266) (192,397) Net cash from financing activities $ 174,513 $ 426,600 Net decrease in cash & cash equivalents $(2,573,790) $(2,381,913) Cash & cash equivalents beginning of period 2,799,777 2,387,197 Cash and cash equivalents end of period 225,987 5,284 Supplemental disclosures of cash flow information: Cash paid during period: Interest $ 354,684 $ 407,377 Income taxes $ 214,100 $ 90,684
NOTES TO UNAUDITED FINANCIAL STATEMENTS 1. The combined financial statements include the accounts of Blue Ridge Real Estate Company and its wholly-owned subsidiaries (Northeast Land Company, Jack Frost Mountain Company and BRRE Holdings, Inc.) and Big Boulder Corporation and its wholly-owned subsidiaries (Lake Mountain Company and BBC Holdings, Inc.). In the opinion of management, the accompanying unaudited combined condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of September 30, 1998, and the results of operations and the statements of cash flows for the three and six month periods ended September 30, 1998 and September 30, 1997. 2. The results of operations for the three and six months are not necessarily indicative of the results to be expected for the full year since (a) the Companies' two ski facilities operate principally during the months of December through March and (b) land dispositions occur sporadically and do not follow any pattern during the fiscal year. Costs and expenses net of revenues received in advance attributable to the ski facilities for the months of April through November are deferred and recognized as revenue and operating expenses, ratably, over the operating period. 3. Depreciation of ski facility fixed assets is now being calculated over the 12 month period. The expense is deferred until the operating period, at which time it will be recognized ratably. Previously, depreciation was calculated only during the operating period. 4. The provision for income taxes for the six months ended September 30, 1998 and September 30,1997 represents the estimated annual effective tax rate for the year ending March 31, 1999 and 1998, respectively. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Operations for the Second Quarter and First Half of Fiscal 1999 resulted in net income of $.18 and $.11 per combined share compared to a net income of $.07 and $.01 per combined share for the three and six months ended September 30, 1997. Combined revenue of $3,963,928 represents an increase of $329,263 and $290,570 as compared to the three and six months ended September 30, 1997. Ski operations remained unchanged at $0. Real Estate Management increased $237,997 and $301,804 for the first three and six months of Fiscal 1999 as compared to the three and six months ended September 30,1997. Rental Income increased $91,266 and decreased $11,234 for the first three and six months of Fiscal 1999 as compared to the three and six months ended September 30, 1997. Real Estate Management increase in revenue is attributed to festival revenues, recreational activities, and property and rental management of homes in our resort communities. Rental income decrease for the first six months of Fiscal 1999 as compared to the six months ended September 30, 1997 is due to a reduction in rental income received from Blakeslee Village. Interest and Other Income increased $8,334 and $32,699 for the first three and six months of fiscal 1999 as compared to the three and six months ended September 30, 1997. Operating costs (net of G & A) increased by $185,806 and $214,276 for the first three and six months of Fiscal 1999 as compared to the three and six months ended September 30, 1997. This increase was primarily due to the opening of a new operating center and the expansion of existing operations. General and Administrative expenses decreased by $12,983 for the first three months of Fiscal 1999 and increased by $39,677 for the first six months of Fiscal 1999 as compared to the three and six months ended September 30, 1997. This fluctuation is the result of timing differences in the purchase of supplies. Several items are non-recurring services related to repair and maintenance. Interest expense for the first three months of Fiscal 1999 increased by $5,373 as compared to the three months ended September 30, 1997, and decreased by $55,338 for the first six months of Fiscal 1999, as compared to the six months ended September 30, 1997. The three month increase is due to a reclassification in the prior fiscal year and the six month decrease is due to the re-financing of the Dreshertown Plaza and the principal pay down on various notes. The effective income tax rate for the first six months of Fiscal 1999 was 40%, as compared to 34% for the six months ended September 30, 1997. State taxes account primarily for the Fiscal 1999 effective rates being greater than the federal statutory rate of 34%. [CAPTION] Per Share Data Earnings per share are computed as follows: 6 Mos. Ended 6 Mos. ended September 30, September 30, 1998 1997 Net income $213,343 $12,545 Weighted average combined shares of common stock outstanding used to compute basic earnings per combined common share 1,988,453 1,994,014 Additional combined common shares to be issued assuming exercise of stock options, net of combined shares assumed reacquired 13,751 2,294 Combined shares used to compute dilutive effect of stock option 2,002,204 1,996,308 Basic earnings per combined common share $0.11 $0.01 Diluted earnings per combined common share $0.11 $0.01
Risks and Uncertainties The companies have taken steps to make its products, systems and infrastructure Year 2000 compliant and have installed new hardware and financial software effective April 1, 1998. The Companies have also initiated the process of upgrading the ticketing system to a Year 2000 compliant product. Management has and will continue to obtain representation from its vendors that any new or existing systems are Year 2000 compliant. Management does not believe the cost for the balance of the Year 2000 implementation will be material. Financial Condition, Liquidity and Capital Resources Working capital as of September 30, 1998 increased by $587,833 as compared to March 31, 1998. This was due principally to an increase in accounts receivable and an increase in deferred operating costs due to the ski facility. The change in the balances of accounts receivable and deferred operating costs from March 31, 1998 to September 30, 1998 was due primarily to revenue and expenses that are applicable to the ski facilities, which are deferred and recognized ratably during the months of December through March. Moving Forward Capital expenditures for the First Half of Fiscal 1999 were for various equipment purchases. The Companies, in Fiscal 1999, will expand camping sites at Fernridge Campground, construct a communications tower and install a sewer line for the Pennsylvania Department of Transportation's planned rest area. PART II - OTHER INFORMATION The Companies have no matters to report with respect to Items 1, 2, 3, 4, 5, and 6(A) and (B). FORM 10-Q SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION (Registrant) (Signature) Gary A. Smith President (Signature) Cynthia A. Barron Chief Accounting Officer Date: November 5, 1998 EX-27 2
5 6-MOS MAR-31-1999 SEP-30-1998 225,987 0 353,269 0 219,192 4,623,085 49,296,594 31,947,500 23,876,631 2,316,581 0 0 0 1,976,958 0 23,876,631 3,963,928 3,963,928 0 3,527,702 0 0 (355,307) 145,562 58,224 0 0 126,005 0 213,343 .11 .11
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