-----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, GHTNSF8ro33OxBlEmYAHpSdQoqSca+xRESNLeRjhC2OABJQvU55Qu0Aon0kU8VrM 0GBvyUfQ7/KACrRWAPWteA== 0000861502-97-000001.txt : 19970221 0000861502-97-000001.hdr.sgml : 19970221 ACCESSION NUMBER: 0000861502-97-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961225 FILED AS OF DATE: 19970211 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COEUR D ALENES CO /IA/ CENTRAL INDEX KEY: 0000861502 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED STRUCTURAL METAL PRODUCTS [3440] IRS NUMBER: 820109390 STATE OF INCORPORATION: ID FISCAL YEAR END: 0925 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 001-10676 FILM NUMBER: 97524226 BUSINESS ADDRESS: STREET 1: PO BOX 2610 CITY: SPOKANE STATE: WA ZIP: 99220-2610 BUSINESS PHONE: 5099246363 MAIL ADDRESS: STREET 2: PO BOX 2610 CITY: SPOKANE STATE: WA ZIP: 992202610 FORMER COMPANY: FORMER CONFORMED NAME: CONJECTURE INC /IA/ DATE OF NAME CHANGE: 19931209 FORMER COMPANY: FORMER CONFORMED NAME: COEUR D ALENES CO /WA/ DATE OF NAME CHANGE: 19931209 10QSB 1 US SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 25, 1996. [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________________ TO ________________. Commission File Number 0-18353 THE COEUR D'ALENES COMPANY (Exact name of registrant as specified in its charter) Idaho 82-0109390 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) PO BOX 2610, Spokane, Washington 99220-2610 (Address of principal executive offices) (Zip Code) (509) 924-6363 (Registrant's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. Yes X No Applicable only to issuers involved in bankruptcy proceedings during the preceding five years. Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes___No___ Applicable only to corporate issuers State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 5,353,561 shares of common stock, no par value, were outstanding as of January 31, 1997. PART I. FINANCIAL INFORMATION. Item 1. Financial Statements. The condensed financial statements of The Coeur d'Alenes Company (sometimes referred to herein as the "Company") included herein have been prepared by the Company without audit or review by the Company's accountants pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, all adjustments necessary to a fair statement of the results of operations for the interim periods ended December 25, 1996 and December 25, 1995 have been made. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in The Coeur d'Alenes Company's latest audited financial statements for the fiscal year ended September 28, 1996. Index of Financial Statements Page Consolidated Balance Sheets - December 25, 1996 and September 28, 1996 3 Unaudited Consolidated Income Statements - Three Months Ended December 25, 1996 and December 25, 1995 4 Unaudited Consolidated Statement of Cash Flows Three Months Ended December 25, 1996 and December 25, 1995 6 Condensed Notes to Unaudited Consolidated Financial Statement 7
THE COEUR D ALENES COMPANY CONSOLIDATED BALANCE SHEET December 25, 1996 and September 28, 1996 ASSETS Dec 25, 1996 Sept 28, 1996 (Unaudited) (Audited) Current Assets: Cash $ 92,436 $ 68,645 Accounts receivable 1,340,841 1,181,599 Inventory 2,796,516 2,788,654 Other current assets 128,393 70,450 Total current assets 4,358,186 4,109,348 Property and Equipment 4,851,458 5,332,622 Less accumulated depreciation 1,584,022 2,235,079 Net property and equipment 3,267,436 3,097,543 Other asset 44,493 50,732 Total assets $7,670,114 $7,257,623 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short term bank borrowings $1,206,209 $ 863,477 Accounts payable 1,084,793 1,046,662 Accrued expenses 282,712 486,478 Current amount on long-term debt 83,576 75,821 Total current liabilities 2,657,290 2,472,438 Long-term debt: Deferred tax liability 63,007 44,403 Long term debt less current maturities 2,280,643 2,031,406 Long term debt to related parties 128,000 128,000 Total long term liabilities 2,471,650 2,203,809 Total liabilities 5,128,940 4,676,247 Stockholders' Equity: Capital Stock 1,186,192 1,186,192 Retained earnings 1,358,782 1,398,984 -------------------------------------- 2,544,974 2,585,176 Less Treasury Stock at cost 3,800 3,800 Total stockholders' equity 2,541,174 2,581,376 Total liabilities and stockholder's equity $7,670,114 $7,257,623
THE COEUR D ALENES COMPANY UNAUDITED CONSOLIDATED INCOME STATEMENT Three Months Ended December 25, 1996 and December 25, 1995 1996 1995 Net sales $3,004,130 $2,694,541 Costs of sales 2,196,196 1,983,000 Gross profit on sales 807,934 711,541 Selling, general and administrative expenses 830,577 757,894 Operating loss (22,643) (46,353) Other income (expense) Interest income 6,655 12,506 Interest expense (77,392) (50,862) Other income 29,567 15,430 Total other expense (41,170) (22,926) Loss before income tax expense (63,813) (69,279) Income tax benefit (23,611) (25,633) Net loss $ (40,202) $ (43,646) Loss per share $ 0.01 $ 0.01 Shares outstanding 5,353,561 5,353,577
THE COEUR D'ALENES COMPANY UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended December 25, 1996 and December 25, 1995 1996 1995 Cash flows from operating activities: Net loss $(40,202) $(43,646) Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation 55,384 37,425 Gain on disposal of assets (22,122) Changes in assets and liabilities Accounts and notes receivable (159,242) (162,399) Inventories ( 7,862) (490,833) Prepaid expense ( 57,943) ( 1,511) Other Assets 6,239 31,557 Accounts payable 38,131 898,975 Accrued expenses (185,162) 46,453 Cash provided (used) by operating activities (372,779) 316,021 Cash flows from investing activities: Proceeds from sale of assets 47,350 Additions to property and equipment (250,505) (238,421) Cash flows used by investing activities (203,155) (238,421) Cash flows from financing activities: Net borrowing (payments) borrowings under line of credit 342,732 (194,027) Principal repayment of long-term debt (14,280) ( 11,097) New long term note 271,273 0 Cash provided (used) by financing activities 599,725 (205,124) Net increase (decrease) in cash 23,791 (127,524) Cash, beginning of period 68,645 128,085 Cash, end of period $ 92,436 $ 561
THE COEUR D ALENES COMPANY CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies. Significant accounting policies followed for the three months ended December 25, 1996 are the same as those contained in the Summary of Significant Accounting Policies from the Company's audited financial statements as of September 28, 1996 and September 30, 1995. (2) Inventories. Inventories are summarized as follows: December 25, September 28, 1996 1996 Raw materials on LIFO $ 79,130 $ 147,528 Work-in-process 429,049 550,462 Inventories at FIFO cost 508,179 697,990 LIFO reserve (56,711) (56,711) Inventories at LIFO cost 451,468 641,279 Other FIFO inventories 2,345,048 2,147,375 Total inventories 2,796,516 2,788,654
(3) Short-term bank borrowings. The Company has $1,850,000 in bank credit lines which mature on March 1, 1997. Interest is charged at the lender's prime rate plus .325%, 8.57% at December 25, 1996. Outstanding borrowings are collateralized by accounts receivable and inventories. The credit line agreement contains covenants under which the Company may not pay dividends in excess of 10% of annual net (after tax) profit, purchase property and equipment in excess of $1.4 million in fiscal year end 1996 or enter into mergers, acquisitions or any major sales of assets or corporate reorganizations without prior consent of the bank. The Company is also required to maintain certain financial ratios concerning working capital and debt to equity, as well as a minimum net worth of $2,000,000. (4) Capital Stock. On October 31, 1995, the holders of $122,000 worth of convertible debentures converted into 976,000 shares of capital stock at a conversion price of $.125 per share. The conversion increased capital stock outstanding from 4,377,577 shares to 5,353,577 shares. (5) Federal Income Tax Expense As of December 25, 1996 and September 28, 1996, the Company has a deferred long term tax liability of $63,007 and $44,403 resulting primarily from the use of accelerated methods of depreciation of fixed assets and a deferred tax asset of $70,450 and $70,450 resulting from vacation accrual and bad debt allowance. No valuation allowance is recorded since the Company believes it is more likely than not that it will realize the deferred tax asset. There were no extraordinary items to be reported for any of the above accounting periods. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources During the first three months of the current fiscal year, the Company's working capital has remained relatively constant, moving from approximately $1,637,000 on September 28,1996 to approximately $1,701,000 as of December 25, 1996. The 4% improvement was primarily the result of long-term financing on a remodeled and expanded office building. The first progress payment was funded from the operating line in September, 1996 waiting for an appraisal to support permanent funding. The Company converted a construction loan in the amount of $1,950,000 to a permanent loan in December, 1996. The loan was used to pay off the former owner, construct approximately 42,000 sq. ft. of plant facility and remodel and expand the office space to approximately 6,000 sq. ft. The terms of the loan include a 20 year amortization period with a ten year balloon payment. Interest is adjusted every six months to a rate of 2.75% over LIBOR. During the current fiscal year it is likely that the Company will want to invest in a new shear for the distribution business. The cost is expected to be approximately $250,000. A portion of the cost will likely be financed with an equipment loan. The Company is dependent on an operating line of credit, secured by accounts receivable and inventory to meet its daily financial obligations. A $1.85 million operating line is currently in place through March 1, 1997. The Company expects to be able to renew the operating line of credit for the next year on substantially the same terms and conditions as last year. Results of Operations Sales of approximately $3,004,000 for the three month period ended December 25, 1996 are approximately 11% higher than approximately $2,695,000 for the same period of time in 1995. Gross margins improved by approximately 14% for the first quarter of the current fiscal year compared to the first quarter of the prior fiscal year. The steel service center sales represent approximately 76% of the total Company sales and experienced a 12% growth for the first three months of the current year compared to the first three months of the prior year. The fabrication and processing business accounts for the remaining 24% of the total sales and experienced a 7% increase in sales volume for the three month period ended December 25, 1996 compared to the three month period ended December 25, 1995. Operating expenses at approximately $831,000 for the three month period ended December 25, 1996 were 13.5% higher than approximately $712,000 for the same period of the prior fiscal year. Severe weather conditions, including an ice storm which left the plant without power for three days, had a negative impact on the current year's first quarter expense load. The move to the new facilities, which began in July, 1996, was not completed until December 1, 1996. Approximately $30,000 was spent on the move during the first quarter of the current fiscal year. Another expense icurred in December, 1996 with no comparable expense in 1995 was a settlement bonus paid to the shop employees of the fabrication and processing business in the amount of $8,500. Interest expense, at approximately $77,000 for the three month period ended December 25, 1996 is 52% higher than approximately $51,000 for the three month period ended December 25, 1995. The increase is the result of financing the construction of a new fracility for the fabrication and processing business and expansion of the office building. Long term debt increased by approximately $1,278,000 to $2,471,650 as of December 25, 1996 compared to $1,193,802 as of December 25, 1995. With the additional expense load, the first quarter of the current year ended with a net loss of $40,202, just slightly less than a net loss of $43,646 for the first quarter of the prior year. PART II. OTHER INFORMATION. Item 1. Legal Proceedings. None. Item 2. Changes in Securities. The Company had sold $250,000 of convertible debentures, collateralized by land and building, held by related parties, with annual interest at 9.25% and due October 31, 1998. The instruments are convertible to no-par common stock after October 31, 1994 at $0.125 per share with 20% per year incremental conversion price increases over the life of the debentures. The Company, at its option, may call any or all outstanding debentures for redemption after January 2, 1994. During October 1995, $122,000 of the debentures were converted at $0.125 per share for which 976,000 shares were issued. $128,000 remains as long-term debt. This conversion increased the number of outstanding shares from 4,377,577 to 5,353,577. 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 (249.308). (a) Exhibits. None. (b) 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. THE COEUR D'ALENES COMPANY (Registrant) Dated: February 7, 1997 /s/ Marilyn A. Schroeder Marilyn A. Schroeder, Treasurer and Chief Financial Officer (Authorized Officer and Principal Accounting and Financial Officer) EX-27 2
5 3-MOS 12-MOS SEP-27-1997 SEP-28-1996 DEC-25-1996 SEP-28-1996 92,436 68,645 0 0 1,418,891 1,258,649 78,050 77,050 2,796,516 2,788,654 4,358,186 4,109,348 4,851,458 5,332,622 1,584,022 2,235,079 7,670,114 7,257,623 2,657,290 2,472,438 1,950,000 1,678,728 0 0 0 0 1,186,192 1,186,192 1,358,782 1,398,984 7,670,114 7,257,623 3,004,130 12,498,993 3,040,352 12,666,978 2,196,196 8,982,259 3,026,774 11,902,279 53,781 341,797 0 0 77,392 209,124 (63,813) 422,902 (23,611) 132,673 (22,643) 422,902 0 0 0 0 0 0 (40,202) 290,229 (.01) .06 (.01) .06
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