-----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, VS/sR0JOOtt0XeMJScV2Zw+ye2kuuMw1beB7ymx/U4r2eH+rRF2F4+kM9C/f97AK w84n5GHDPx7BpRWy1QH1Aw== 0000809365-98-000008.txt : 19981116 0000809365-98-000008.hdr.sgml : 19981116 ACCESSION NUMBER: 0000809365-98-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 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: 98747137 BUSINESS ADDRESS: STREET 1: P O BOX 6812 STREET 2: P O BOX 6821 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, 1998 ------------------ 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) 9512 Fairview Avenue, Boise, Idaho 83704 - ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (208) 375-8099 ---------------------------------------------------- (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 09-30-98. 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 CONDENSED BALANCE SHEETS September 30, 1998 December 31, 1997 - ------------------------------------------------------------------------------ ASSETS Cash $ 3,021 $ 64,898 Loans receivable 1,255,145 1,343,585 Less allowance for loan losses (100,000) (81,465) ---------- ---------- Net loans 1,155,145 1,262,120 Short term market investments 1,865 1,865 Interest and other receivables 46,225 21,088 Prepaid expenses 12,558 10,609 Other investments 125,000 25,000 Fixed assets 27,600 2,222 Other real estate owned 271,443 0 Other assets 39,829 0 ---------- ---------- Total Assets $1,682,686 $1,387,802 ========== ========== LIABILITIES & STOCKHOLDERS' EQUITY Accounts payable 65,506 0 Accrued expenses $ 8,280 $ 10,780 Payroll tax payable 4,286 5,391 Fees collected, unearned 0 3,352 Notes payable 503,891 269,877 ---------- ---------- 581,963 289,400 Excess of net assets acquired over cost, net of accumulated accretion of $98,225 at September 30, 1998 and $80,891 at December 31, 1997 17,334 34,668 ---------- ---------- Total Liabilities 599,297 324,068 STOCKHOLDERS' EQUITY Common stock, no par value, Authorized 500,000 shares; 1,618 shares issued and outstanding 982,825 982,825 Retained earnings 100,564 80,909 ---------- ---------- 1,083,389 1,063,734 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $1,682,686 $1,387,802 ========== ========== THE IDAHO COMPANY CONDENSED STATEMENTS OF OPERATIONS Nine Nine Quarter Months Quarter Months Ended Ended Ended Ended Sept 30, Sept 30, Sept 30, Sept 30, 1998 1998 1997 1997 - -------------------------------------------------------------------------- REVENUE Consulting Income $ 0 $ 0 $ 0 $ 922 Loan Fees 11,330 37,914 1,477 10,762 Interest Income - Loans 51,047 111,767 35,465 114,846 Interest Income - Other 4,745 13,478 2,789 3,184 Late Fees 952 3,807 0 0 Premiums 9,696 24,089 0 0 Negative Goodwill & Other Income 17,413 102,452 5,775 19,604 -------- --------- ---------- ---------- Total Revenue 95,183 293,507 45,508 149,318 EXPENSES Operating Expenses 100,317 255,316 47,730 133,001 Provision for Loan Loss 4,992 18,536 844 1,872 --------- -------- -------- -------- Total Expenses 105,309 273,852 48,574 134,873 NET INCOME (LOSS) $ (10,126) $ 19,655 $ (3,068) $ 14,445 ======== ======== ======== ======== AVERAGE NUMBER SHARES OUTSTANDING 1,618 1,618 1,618 1,618 BASIC AND DILUTED INCOME (LOSS) PER SHARE OF COMMON STOCK $ (6.26) $ 12.15 $ (1.90) $ 8.93 THE IDAHO COMPANY STATEMENTS OF CASH FLOWS Nine Months Ended - ------------------------------------------------------------------------------- September 30, 1998 September 30, 1997 - ------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 19,655 $ 14,445 Net cash used in operating activities: Accretion of excess of net assets acquired over cost (17,334) (17,334) Provision for loan losses 18,536 1,872 Depreciation expense 2,166 0 Changes in operating assets and liabilities: Accounts payable 65,506 0 Interest and other receivables (25,137) 1,606 Prepaid expenses (1,949) (2,477) Other assets (39,829) (2,478) Accrued expenses (2,500) 5,234 Payroll tax payable (1,105) 862 Fees collected, unearned (3,352) (7,535) Interest payable 0 (350) ------- ------- Total adjustments (4,998) (20,598) NET CASH (USED IN) OPERATING ACTIVITIES 14,657 (6,154) CASH FLOWS FROM INVESTING ACTIVITIES: Loans receivable disbursed (2,690,824) (288,391) Loans receivable collected 2,679,610 655,298 Purchase of other investments (100,000) 0 Other real estate owned (171,789) 0 Purchase of fixed assets (27,545) 0 NET CASH PROVIDED BY (USED IN) -------- -------- INVESTING ACTIVITIES (310,548) 366,907 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds form issuance of debt 1,035,000 0 Principal payments on debt (800,986) (184,921) NET CASH PROVIDED BY (USED IN) -------- -------- FINANCING ACTIVITIES 234,014 (184,921) INCREASE (DECREASE) IN CASH (61,877) 175,829 CASH AT BEGINNING OF PERIOD 64,898 15,636 -------- -------- CASH AT END OF PERIOD $ 3,021 $ 191,465 ======== ======== SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES Other real estate owned $ 99,654 0 THE IDAHO COMPANY NOTES TO FINANCIAL STATEMENTS Quarter Ended September 30, 1998 NOTE 1 BASIS OF PRESENTATION The accompanying unaudited, condensed financial statements have been prepared in accordance with the instructions to Form 10-Q, and therefore, do not include all information and footnotes necessary for a complete presentation of the results of operations, the financial position, and cash flows, in conformity with generally accepted accounting principles. This report on Form 10-Q for the three months ended September 30, 1998 should be read in conjunction with the Company's annual report on form 10-K for the year ended December 31, 1997. The accompanying unaudited condensed financial balance sheets, statements of operations and cash flows reflect all normal recurring adjustments which are, in management's opinion, necessary for a fair presentation of the Company's financial position, results of operation, and cash flows. The results of operations for the interim period ended September 30, 1998 are not necessarily indicative of the results to be expected for the full year. NOTE 2 NET EARNINGS PER SHARE On December 31, 1997, the Company adopted the provisions FAS No. 128, Earnings Per Share. FAS 128 requires the presentation of both basic and diluted earnings per share (EPS). Basic EPS is the amount of net income or loss divided by the weighted average number of shares of common stock outstanding. Diluted EPS is the amount of income or loss for the period divided by the weighted average number of shares plus all potentially dilutive common shares. The earnings were the same for both the basic and diluted EPS caluclations. NOTE 3 YEAR 2000 Throughout 1998, the Company has been developing a plan to deal with Year 2000 compliance issues. The Company does not see any hurdles which are not easily surmountable in order to be ready for the Year 2000. The Company's operations require only two personal computers, one of which will need to be replaced by year 2000. The Idaho Company will be contacting its building lessor to insure all non-IT systems for internal environment controls will be unaffected by the year 2000 changeover. Steps are being taken to evaluate all third parties with whom the Company does business, in order to determine any effects of the Year 2000 problem on those relationships. These relationships are important for day to day business transactions (for example cash and line of credit accounts with various financial institutions). The Company's plan is to dtermine whether or not these third parties have developed a Year 2000 Readiness Plan. Status of plan development will then affect the amount of risk involved. It is expected that risk will be minimal. Costs surrounding Year 2000 readiness are considered by the Company as insubstantial, amounting to the cost of replacing one personal computer. Any costs related to Year 2000 readiness are being expensed as incurred. NOTE 4 NEW ACCOUNTING PRONOUNCEMENTS The Company adopted Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income, effective January 1, 1998. SFAS 130 establishes standards for reporting and displaying comprehensive earnings and its components in financial statements. As of September 30, 1998, the Company has no items to report as components of comprehensive income. In June 1997, the Financial Accounting Standards Board issued Statement No. 131, Disclosures about Segments of an Enterprise and Related Information. The provisions of this statement require disclosure of financial reports issued to shareholders. This statement is effective for fiscal years beginning after December 15, 1997, however, it is not required to be applied for interim reporting in the initial year of application. In June 1998, the Financial Accounting Standards Board issued Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement addresses the accounting for derivative instruments including certain derivative instruments embedded in other contracts, and hedging activities. This statement is effective for fiscal quarters of all fiscal years beginning after June 15, 1999. The Company is currently studying the future effects of adopting this standard. NOTE 5 INCOME TAXES The Company has net operating loss carryforwards from prior years which will exceed the income generated in the first nine months of 1998. The deferred tax asset related to these carryfowards was fully reserved for as of December 31, 1997. Accordingly, no income tax expense is being reported for the period ended September 30, 1998. NOTE 6 OTHER INVESTMENTS The Company has two non-interest convertible debt instruments in software companies located in Idaho Falls, Idaho, each valued at $25,000. The Company has also taken a $75,000 preferred stock interest in a mid-market brokerage firm headquartered in Boise, Idaho. NOTE 7 POLICY ON OTHER REAL ESTATE OWNED Other real estate owned is carried at the lower of cost or net realizable value. Real estate may be considered to be in-substance foreclosed and included herein when specific criteria are met. When property is acquired through foreclosure, or substantially foreclosed, any excess of the related loan balance over net realizable value is charged to the allowance for loan losses. Subsequent write downs or losses upon sale, if any, are charged to other real estate expense. One loan totaling $99,654 was foreclosed on in February. The Company bought out a first deed of trust totaling $171,789 in order to assume first position on the property. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS. The quarter ended September 30, 1998 resulted in net loss of $(10,126) compared to net loss of $(3,068) for the quarter ended September 30, 1997. The nine months ended September 30, 1998 however resulted in a net income of $19,655 compared to net income of $14,445 for the nine months ended September 30, 1997. The Company is just short of its projected year to date numbers, due to the following two factors. First, for the second quarter 1998, the Company foreclosed on a parcel of real estate This property is on the market for sale and has office space that will be leased in the meantime. Second, an SBA loan is in the process of foreclosure. This loan is in non-accrual status and the guaranteed portion of the loan was repurchased from the secondary market. Between these two items, the Company has approximately $440,000 in non-earning assets as of September 30, 1998. The management estimates that any losses on the two foreclosures will be immaterial. The increase in operating expenses mirrors the increase in volume of business transactions, as well as one additional employee, an office in Idaho Falls, Idaho, continued financial support for the Small Business Investment Company, and the continuation of a severance package to a past employee. Inflation has had no significant impact upon the operating overhead, lending or investing activities of the Company. LIQUIDITY AND CAPITAL RESOURCES. As of September 30, 1998, the Company held $3,021 in cash accounts (including interest bearing accounts) to fund loans and operating expenses. The Company has three available lines of credit in the amounts of: (1) $300,100 at a rate of Prime plus 1.5 percent; (2) $150,000 at a rate of Prime plus 1.5 percent; (3) $1,250,000 at Prime rate or Adjusted LIBOR plus Applicable Margin. Also, the Company has an operating lease line of $750,000 at a sub-prime adjusted daily. At September 30, 1998, loans receivable totaled $1,255,145 net of guaranteed portions of SBA loans and loan participations with other lending institutions. No extraordinary capital expenditures were anticipated at quarter end. Management believes that existing cash, the lines of credit, and cash generated from operations will be sufficient to allow the Company to meet its obligations as they come due. 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 President Date: September 30, 1998 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE IDAHO COMPANY'S BALANCE SHEET AT DECEMBER 31, 1997, AND STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1998 SEP-30-1998 3021 126865 1301370 100000 0 323830 47279 19679 1682686 599297 0 0 0 982825 100564 1682686 0 293507 0 230904 0 18536 24412 19655 0 19655 0 0 0 19655 12.15 12.15
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