-----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, Kbmt3VWRYtq7HEfB24us/aKQ5LzgFSm1+6hXuGEeowSMaNrvOa37Gp6XmlexeyAU emIY2RoJRuyRNF2iaZjYHw== 0000012779-02-000008.txt : 20020415 0000012779-02-000008.hdr.sgml : 20020415 ACCESSION NUMBER: 0000012779-02-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020131 FILED AS OF DATE: 20020314 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: 1031 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-02844 FILM NUMBER: 02574760 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 brbb10q1.txt BLUE RIDGE REAL ESTATE/BIG BOULDER CORP 10Q FIRST QTR 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 January 31, 2002 ( ) 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: (570)-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 January 31, 2002 Common Stock, without par value, 1,917,180 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 January 31, 2002 and October 31, 2001 1 & 2 Combined Condensed Statements of Operations - Three Months ended January 31, 2002 and December 31, 2000 3 Combined Condensed Statements of Cash Flows - Three Months Ended January 31, 2002 and December 31, 2000 4 Notes to Financial Statements 5 Item 2-Management's Discussion and Analysis of Financial Condition and Results of Operations 6,7 & 8 PART II - OTHER INFORMATION 8 Signatures 9 BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES BIG BOULDER CORPORATION AND SUBSIDIARIES COMBINED CONDENSED BALANCE SHEETS (UNAUDITED) ASSETS January 31, October 31, 2002 2001 Current Assets Cash and cash equivalents (all funds are interest bearing) $1,122,444 $263,178 Accounts receivable 365,597 376,838 Inventories 396,075 231,771 Prepaid expenses, principally insurance and real estate taxes 617,024 730,382 Deferred operating costs 1,152,477 2,106,478 Total current assets 3,653,617 3,708,647 Properties: Land, principally unimproved (19,741 1,868,505 1,868,505 acres per land ledger) Land Improvements, buildings and equipment 54,448,432 53,985,296 56,316,937 55,853,801 Less accumulated depreciation and amortization 36,634,725 36,636,005 19,682,212 19,217,796 $23,335,829 $22,926,443 See accompanying notes to unaudited financial statements. 1 LIABILITIES AND SHAREHOLDERS' EQUITY January 31, October 31, 2002 2001 Current Liabilities: Notes payable - line of credit $0 $648,195 Current installments of long-term debt 721,869 720,435 Accounts and other payables 1,400,176 544,734 Accrued claims 130,767 134,770 Deferred income taxes 671,834 625,292 Accrued pension expense 774,580 732,580 Accrued liabilities 1,324,588 999,527 Deferred revenue 588,987 638,875 Total current liabilities 5,612,801 5,044,408 Long-term debt, less current installments 6,728,788 6,949,805 Deferred income taxes 842,117 842,117 Other non-current liabilities 40,292 48,219 Deferred income non-current 515,631 515,631 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 January 31, 2002 and as of October 31, 2001 659,444 659,444 Capital in excess of stated value 1,461,748 1,461,748 Earnings retained in the business 9,549,390 9,479,453 11,670,582 11,600,645 LESS: Cost of 280,968 share of capital stock in treasury as January 31, 2002 & October 31, 2001, respectively. 2,074,382 2,074,382 9,596,200 9,526,263 $23,335,829 $22,926,443 See accompanying notes to unaudited financial statements. 2 BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES BIG BOULDER CORPORATION and SUBSIDIARIES COMBINED CONDENSED STATEMENTS OF OPERATIONS THREE MONTHS ENDED JANUARY 31, 2002 & DECEMBER 31, 2000 (UNAUDITED) 2002 2000 Revenues: Ski operations $4,941,020 $2,657,373 Real estate management 988,067 687,023 Summer recreation operations 178,357 310,048 Rental income 429,856 428,439 6,537,300 4,082,883 Costs and expenses: Ski operations 4,921,516 2,685,046 Real estate management 680,007 641,211 Summer recreation operations 168,173 325,593 Rental operations 245,825 220,219 General & administrative expenses 304,337 267,654 6,319,858 4,139,723 Income (loss)from operations 217,442 (56,840) Other income (expense:) Interest & other income 5,797 134,403 Interest expense (106,702) (208,589) (100,905) (74,186) Income (loss) before income taxes 116,537 (131,026) Provision (benefit) for income taxes 46,600 (54,000) Net income (loss) $69,937 $(77,026) Basic and diluted loss per weighted average combined share $.04 ($0.04) See accompanying notes to unaudited financial statements. 3 BLUE RIDGE REAL ESTATE COMPANY BIG BOULDER CORPORATION and SUBSIDIARIES COMBINED CONDENSED STATEMENT OF CASH FLOWS THREE MONTHS ENDED JANUARY 31, 2002 & DECEMBER 31, 2000 (UNAUDITED) 2002 2000 Cash Flows From(Used In) Operating Activities: Net Income(Loss) $ 69,937 $(77,026) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 884,265 442,731 Deferred income taxes 46,542 (70,185) Gain on sale of assets (1,632) (1,725) Changes in assets and liabilities: Accounts receivable 11,241 (537,455) Prepaid expenses and other current assets (50,946) 28,471 Deferred operating costs 515,956 (451,233) Accounts Payable & accrued liabilities 1,210,573 1,099,913 Accrued income taxes 0 (7,367) Deferred revenue (49,888) 233,745 Net cash provided by operating activities 2,636,048 659,869 Cash Flows From (Used In) Investing Activities: Deferred Income 0 13,198 Proceeds from disposition of assets 17,191 1,725 Additions to properties (926,195) (425,535) Net cash used in investing activities (909,004) (410,612) Cash flows From (Used In) Financing Activities: Payment of short-term financing (1,448,195) (100,000) Proceeds from short-term financing 800,000 1,350,000 Payment of long-term debt (219,583) (215,885) Purchase of Treasury stock 0 (18,842) Net cash from (used in) financing activities (867,778) 1,015,273 Net increase in cash and cash equivalents 859,266 1,264,530 Cash and cash equivalents, beginning of period 263,178 261,363 Cash and cash equivalents, end of period $1,122,444 $1,525,893 Supplemental disclosures of cash flow information: Cash paid during period: Interest $107,516 $205,113 Income taxes $0 $47,069 See accompanying notes to unaudited financial statements. 4 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 January 31, 2002, and the results of operations and the statements of cash flows for the three month periods ended January 31, 2002 and December 31, 2000. Certain information and footnote disclosures have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These combined financial statements should be read in conjunction with the financial statements and notes thereto included in the Companies' Transition Report on Form 10-K for the seven months ended October 31, 2001. 2. The Companies and the subsidiaries, under SFAS No. 131, operate in three business segments - Ski Operations, Real Estate Management/Rental Operations and Summer Recreation Operations. The results of operations for the three months are not necessarily indicative of the results to be expected for the full year since the Companies' two ski facilities operate principally during the months of December through March. Costs and expenses net of revenues received in advance attributable to the Ski Operations for the months of April through November are deferred and recognized as revenue and operating expenses, ratably, over the operating period. Therefore revenues and operating expenses of the Real Estate Management/Rental Operations and Summer Recreation Operations are as disclosed on the statement of operations. Depreciation of ski facility fixed assets is calculated over the 12-month period. The expense is deferred until the operating period, at which time it will be recognized ratably. 3. The provision for income taxes for the three months ended January 31, 2002 represents the estimated annual effective tax rate for the year ending October 31, 2002. The effective income tax rate for the first three months of Fiscal 2002 was 40%. 4. Reclassifications have been made to the December 31, 2000 Combined Condensed Statement of Operations to reflect changes in presentation for the three months ended January 31, 2002. Namely, Summer Recreation Operations are reported as a separate segment of the Companies. 5 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Due to the change in the Companies' fiscal year end, the most recent being October 31, 2001, the comparative quarterly information presented is from the most current comparable quarter, which is the three months ended December 31, 2000. It was not financially practicable to restate the prior fiscal information to match the newly stated quarters. Operations for the three months ended January 31, 2002 (Fiscal 2002) resulted in a net income of $.04 per combined share compared to a net loss of $(.04) per combined share for the three months ended December 31, 2000. Combined revenue of $6,537,300 represents an increase of $2,454,417 as compared to the three months ended December 31, 2000. Ski operations increased $2,283,647. Real Estate Management increased $301,044 and Rental Income increased $1,417. Summer recreation activities decreased $131,691. Ski operations increase in revenue for the three months ended January 31, 2002 is the result of two months of ski activity being compared to one month of ski activity for the three months ended December 31, 2000. The ski areas traditionally operate from December through March. Real Estate Management increase in revenue is attributed to property management of homes in our resort communities (50%) and the implementation of a timbering program (50%). Summer recreational activities decrease in revenue is attributed to Splatter Paintball (18%) and Traxx (52%). These two operations were closed for the majority of the three month period ending January 31, 2002, due to it being cost beneficial to shorten the operating period. Both centers were operational for all three months ended December 31, 2000. Interest and Other Income decreased $128,606. This decrease was due to other income received from the Penn DOT sewer line construction project in the three month period ended December 31, 2000. Operating costs increased by $2,143,452 during the first three months of Fiscal 2002 as compared to the three months ended December 31, 2000. Ski Operation expenses increased by $2,236,470 as a result of two months of ski activity expenses being included for the three months ended January 31, 2002 as compared to one month of ski activity expenses being included for the three months ended December 31, 2000. The ski areas traditionally operate from December through March. 6 Real Estate Management operating expenses increased by $38,796. Summer recreational activities operating expenses decreased by $157,420 as a result of Splatter Paintball and Traxx being closed for the majority of the three months ended January 31, 2002 and being operational for the three months ended December 31, 2000. Rental income operating expenses increased by $25,606. General and Administrative expenses for the first three months of Fiscal 2002 as compared to the three months ended December 31, 2000, increased by $36,683, this fluctuation is the result of timing differences in the purchasing of supplies and services. Interest expense for the first three months of Fiscal 2002, as compared to the three months ended December 31, 2000, decreased by $101,887. This decrease is attributable to a reduction in debt on the Dreshertown Plaza Shopping Center (59%) and the payoff of the Jack Frost Mountain compressor loan (20%). Balance of the decrease is from a reduction in debt through monthly principal payments and a reduction in the prime interest rate. Options Granted Effective December 10, 2001 four corporate officers were granted stock options in varying amounts with a total of 11,000 shares. The option price of $10.50 was equal to the market value on the date of the grant. Because the exercise price of the stock options equals the fair market value of the Companies' underlying stock on the date of the grant, no compensation expense is recognized in the combined condensed statement of operation. Per Share Data Income (loss) per share are computed as follows: 3 Mos ended 3 Mos ended January 31, December 31, 2002 2000 Net Income (Loss) $ 69,937 $ (77,026) Weighted average combined shares of common stock outstanding used to compute basic earnings per combined common share 1,917,180 1,924,433 Additional combined common shares to be issued assuming exercise of stock options, net of combined shares assumed reacquired 14,237 10,120 Combined shares used to complete dilutive effect of stock option 1,931,417 1,934,553 Basic and diluted income (loss) per combined common share $.04 $(.04) 7 Financial Condition, Liquidity and Capital Resources Working capital as of January 31, 2002, decreased by $623,423 as compared to October 31, 2001. The decrease is primarily due to the cyclical nature of the Companies' business. The change in the balance of deferred operating costs from October 31, 2001 to January 31, 2002 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 Quarter of Fiscal 2002 were for various equipment purchases. The Companies, in Fiscal 2002 will be constructing additional Splatter Paintball fields, the completion of an ATV exclusive area at the Traxx Motorcross facility at Jack Frost Mountain and upgrades to the Fernridge Campground. 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). 8 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) Eldon D. Dietterick Executive Vice President/Treasurer (Signature) Cynthia A. Barron Chief Accounting Officer Date: March 6, 2002 9 -----END PRIVACY-ENHANCED MESSAGE-----