-----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, DbzwwP0k/FDNt9I3FY9jC8LPuD/I2djuB5/H9hHMabsB6BedEbot2MpRgIKPL2xK S42vFDoRiAztnnuaeALaWQ== 0000809365-97-000007.txt : 19971027 0000809365-97-000007.hdr.sgml : 19971027 ACCESSION NUMBER: 0000809365-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971024 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDAHO CO CENTRAL INDEX KEY: 0000809365 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 820410913 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 033-11309 FILM NUMBER: 97700144 BUSINESS ADDRESS: STREET 1: P O BOX 6812 CITY: BOISE STATE: ID ZIP: 83707 BUSINESS PHONE: 2083446308 MAIL ADDRESS: STREET 1: P O BOX 6812 CITY: BOISE STATE: ID ZIP: 83707 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, 1997 -------------- Commission File No.: 33-11309 -------- THE IDAHO COMPANY ------------------------------------------------------ (Exact name of registrant as specified in its charter) IDAHO 82-0410913 - --------------------------------- ------------------------------------ (State or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 102 S. 17th Street, Suite 201, Boise, Idaho 83702 - ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (208) 344-6308 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 1,618 shares of no par value common stock were outstanding at 09-30-97. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS The financial information set forth herein is unaudited and reflects all adjustments which are, in the opinion of management, necessary to the presentation of a fair statement of the interim period presented. (The remainder of this page intentionally left blank.) THE IDAHO COMPANY BALANCE SHEETS September 30,1997 December 31, 1996 - ------------------------------------------------------------------------------ ASSETS Cash $ 191,465 $ 15,636 Loans receivable 978,912 1,345,817 Less allowance for loan losses 77,578 75,706 ---------- ---------- Net loans 901,334 1,270,111 Interest and other receivables 22,299 23,904 Prepaid expenses 10,991 8,515 Property Plant & Equipment 2,478 ---------- ---------- Total Assets $1,128,567 $1,318,166 ========== ========== LIABILITIES & STOCKHOLDERS' EQUITY Accrued expenses $ 8,792 $ 3,909 Payroll tax payable 3,181 2,319 Fees collected, unearned 3,352 10,887 Notes Payable 0 184,921 ---------- ---------- 15,325 202,036 Excess of net assets acquired over cost, net of accumulated accretion of $40,446 at March 31, 1996 and $34,668 at December 31, 1995 40,447 57,779 ---------- ---------- Total Liabilities 55,772 259,815 STOCKHOLDERS' EQUITY Common stock, no par value, Authorized 500,000 shares; 1,618 shares issued and outstanding 982,825 982,825 Retained earnings 89,970 75,526 ---------- ---------- 1,072,794 1,058,351 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 1,128,567 $1,318,166 ========== ========== THE IDAHO COMPANY STATEMENTS OF OPERATIONS Quarter Year Quarter Year Ended to Date Ended to Date Sept. 30, Sept. 30, Sept. 30, Sept. 30, 1997 1997 1996 1996 - -------------------------------------------------------------------------- REVENUE Consulting Income $ $ 922 $ 410 $ 983 Loan Fees 1,477 10,762 2,885 15,401 Interest Income - Loans 35,465 114,846 38,948 107,167 Interest Income - Other 2,789 3,184 81 1,356 Negative Goodwill & Other Income 5,775 19,604 6,128 18,734 -------- --------- ---------- ---------- Total Revenue 45,508 149,318 48,452 143,641 EXPENSES Operating Expenses 48,574 134,873 36,276 118,639 --------- --------- -------- -------- Total Expenses 48,574 134,873 36,276 118,639 NET INCOME/LOSS $ (3,068) $ 4,444 $ 12,176 $ 25,002 ========= ========= ======== ======== AVERAGE NUMBER SHARES OUTSTANDING 1,618 1,618 1,618 1,618 INCOME/LOSS PER SHARE OF COMMON STOCK $ (1.90) $ 8.93 $ 7.53 $ 15.45 THE IDAHO COMPANY STATEMENTS OF CASH FLOWS Sept. 30, 1997 Sept. 30, 1996 - -------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 14,444 $ 25,002 . Adjustments to reconcile net income to net cash used in operating activities: Accretion of excess of net assets acquired over cost (17,332) (17,334) Provision for loan losses 1,872 6,692 Changes in operating assets and liabilities: Interest receivable 1,606 (4,100) Fees collected, unearned (7,535) 16,886 Prepaid expenses (2,477) (2,570) Accounts payable Accrued expenses 5,234 340 Payroll tax payable 862 753 Fixed Asset (2,478) Interest Payable (350) 359 ------- ------- Total adjustments (20,598) 1,026 NET CASH PROVIDED BY OPERATING ACTIVITIES (6,154) 26,028 CASH FLOWS FROM INVESTING ACTIVITIES: Maturities of interest bearing deposits Loans receivable disbursed (288,391) (989,513) Loans receivable collected 655,298 739,555 -------- -------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 366,907 (249,958) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of debt 496,475 Principal payments on debt (184,921) (396,054) -------- -------- NET CASH USED IN FINANCING ACTIVITIES (184,921) 100,421 INCREASE (DECREASE) IN CASH 175,829 (123,509) CASH AT BEGINNING OF PERIOD 15,636 128,742 -------- -------- CASH AT END OF PERIOD $ 191,465 $ 5,233 ========= ======== THE IDAHO COMPANY NOTES TO FINANCIAL STATEMENTS Quarter Ended September 30, 1997 BASIS OF PRESENTATION AND COMPANY BACKGROUND The Idaho Company (the "Company"), incorporated under the laws of the State of Idaho on November 28, 1986, is a for-profit corporation. The Company was formed to promote economic growth, and to stimulate, develop, and advance the business prosperity of Idaho and its citizens. The Company achieves this objective by lending to, investing in, arranging financing for, and consulting with new, emerging, and expanding businesses. The Company is not obligated to pay a dividend or dividend in kind unless the payment has been approved by the Director of the Department of Finance of the State of Idaho and is consistent with capital requirements and profitability. The Company is a licensed Business and Industrial Development Company (BIDCO). As such, it is regulated by the State of Idaho Department of Finance and subject to periodic asset quality examinations. On September 30, 1992, the Company was granted an exemption from registration as an investment company under the Investment Company Act of 1940, conditioned upon satisfying certain requirements, which have been met as of September 30, 1997. On June 15, 1994, William F. Rigby acquired 97.7 percent of the Company's then outstanding common stock in a tender offer for cash consideration in the amount of $957,780. In accordance with the tender offer terms and conditions, a reverse stock split was subsequently concluded during the first quarter of 1995. The remaining 2.3 percent of shares outstanding became fractional shares as a result of the split and were paid out in the form of cash. The reverse stock split occurred on February 28, 1995, and resulted in a reduction of pre- split issued and outstanding shares of 163,453 to 1,618 post-split shares. Effective with the reverse stock split, the Company amended its articles of incorporation to eliminate the par value feature of its authorized common stock in favor of a no par value feature. On February 28, 1995, the Company re- acquired all fractional common shares created by the reverse stock split for approximately $23,000. On August 4, 1997, an office in Idaho Falls, Idaho was established. Mr. Robert W. Barnes was hired as Vice President, Credit, to manage the office. Mr. Barnes has 20 years credit experience including commercial, agriculture and government guaranteed loans. Mr. Barnes will work exclusively on credit requests throughout Idaho; specifically, SBA 7a, 504's, Farmer Mac and commercial loans. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Unaudited Interim Financial Statements. In the opinion of management, the accompanying financial statements contain all adjustments necessary to fairly represent the financial position of The Idaho Company and the results of operations and cash flows. This report on Form 10-Q for the quarter ended September 30, 1997, should be read in conjunction with the Company's report on Form 10-K for the year ended December 31, 1996, and report on Form 10-Q for the quarter ended September 30, 1996. Loans. The Company makes commercials loans to Idaho small businesses to stimulate economic activity through job creation. Loans are reported at the principal amount outstanding, net of an allowance for estimated loan losses. Accrual of interest is discontinued when reasonable doubt exists as to collectibility. All loans greater than 90 days delinquent are subject to nonaccrual of interest. Interest accruals are resumed on such loans only when they are brought fully current with respect to principal and interest and when, in the judgment of management, the loans are fully collectible. Allowance for Loan Losses. The allowance for loan losses is established through a provision charged to expense. Loans are charged against the allowance when management believes that the collectibility of principal is unlikely. The allowance is an amount which management believes would be adequate to absorb possible losses on existing loans, based on 1) conditions existing at the balance sheet date, 2) evaluations of the collectibility of the loans and 2) prior loan loss experience. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current economic conditions that may affect the borrower's ability to repay. Income Taxes. The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Excess of Net Assets Acquired over Cost. The excess of net assets acquired over purchase price is accreted on a straight-line basis over a five year life. Income Per Share. Income per share is computed by dividing the net income by the average number of shares outstanding during the period. See "Basis of Presentation" for a description of the reverse stock split occurring on February 28, 1995. Interest Bearing Deposits. Interest bearing deposits are comprised of certificates of deposit and other deposits. Notes Payable. The Company has a revolving note with a maturity of June 20, 1998. This note was not drawn against during the third quarter, 1997. Cash. With the exception of a nominal operating account, all cash earns interest at current market rates. Reclassifications. Certain amounts presented in 1995 have been reclassified to be consistent with this presentation. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS. The quarter ended September 30, 1997, resulted in net income of -$3,068, compared to net income of $12,176 for the quarter ended September 30, 1996. Net income for the nine months ended September 30, 1997, equaled $14,444 compared to net income of $25,002 for the nine months ended September 30, 1996. Year-to-date results for 1997 are in line with management's projections. These projections include a severance package for a former employee, the opening of a new office, hiring additional staff, and offerings of new loan products. Revenues for the quarter ended September 30, 1997, were primarily derived from interest on loans receivable, loan fees and late fees. Non-cash revenues were also realized from the amortization of negative goodwill (see "Basis of Presentation" under Notes to Financial Statements). The primary sources of revenue for the quarter ended September 30, 1996, were interest on loans receivable and loan fees. Shareholders' equity on September 30, 1997, was $1,072,794 compared to shareholders equity of $1,058,351 on September 30, 1996. Inflation has had no significant impact upon the operating overhead, lending or investing activities of the company. Management anticipates that interest rates may slightly increase throughout 1997. LIQUIDITY AND CAPITAL RESOURCES. As of September 30, 1997, the Company held $191,465 in cash accounts (including interest bearing accounts) to fund loans and operating expenses. The Company has available a line of credit in the amount of $300,000 at a rate of Prime plus 1.5 percent. Zero was drawn against at quarter end. At September 30, 1997, current portions of loans receivable totaled $308,348. No extraordinary capital expenditures were anticipated at quarter end. Management believes that existing cash, the line of credit, and cash generated from operations will be sufficient to allow the Company to meet its obligations as they come due. At September 30, 1997, the largest asset items consisted of cash and loans receivable, net of reserve, totaling $1,070,799 out of $1,128,567 total assets. At September 30, 1996, the largest asset items consisted of cash and loans receivable, net, totaling $1,194,891 out of $1,227,558 total assets. Part II - OTHER INFORMATION Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. None. 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. FOR THE IDAHO COMPANY Diane Rigby Vice President Date: October 22, 1997 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE IDAHO COMPANY'S BALANCE SHEET AT SEPTEMBER 30, 1997, AND STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1997 SEP-30-1997 191465 0 976211 77578 0 533102 19734 17256 1128567 15203 0 0 0 982825 89969 1128567 0 149318 0 128460 0 1872 4541 14444 0 14444 0 0 0 14444 8.93 8.93
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