-----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, DDxwTryluTLuPzg+1snfyUgmqF/xcGu3bhITkrMME/eMseoY9uYRTrPztebkFNOm b+JD4CZKabvF2jRkWx5onA== 0000861502-98-000031.txt : 19980507 0000861502-98-000031.hdr.sgml : 19980507 ACCESSION NUMBER: 0000861502-98-000031 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960625 FILED AS OF DATE: 19980506 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/A SEC ACT: SEC FILE NUMBER: 001-10676 FILM NUMBER: 98611420 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/A 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 MARCH 25, 1998. 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 incorporation or organization) Identification No.) 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. 5,352,553 shares of common stock, no par value, were outstanding as of April 25, 1998. 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 March 25, 1998 and March 25, 1997 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 27, 1997. Index of Financial Statements Page Consolidated Balance Sheets - March 25, 1998 and September 27, 1997 3 Unaudited Consolidated Income Statements - Six Months Ended March 25, 1998 and March 25, 1997 4 Unaudited Consolidated Income Statements - Three Months Ended March 25, 1998 and March 25, 1997 5 Unaudited Consolidated Statement of Cash Flows - Six Months Ended March 25, 1998 and March 25, 1997 6 Condensed Notes to Unaudited Consolidated Financial Statement 7 THE COEUR D'ALENES COMPANY CONSOLIDATED BALANCE SHEET March 25, 1998 and September 27, 1997 March 25, September 27 1998 1997 (Unaudited) (Audited) ASSETS Current Assets: Cash $ 60,070 $ 89,495 Accounts receivable 1,263,056 1,240,996 Inventory 2,762,192 2,342,671 Other current assets 93,874 70,004 Total current assets 4,179,192 3,743,166 Plant, Property and Equipment 4,788,407 4,735,715 Less accumulated depreciation 1,529,441 1,400,291 Net plant property and Equipment 3,258,966 3,335,424 Other assets 54,389 73,365 Total assets $7,492,547 $7,151,955 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short term bank borrowings $ 771,649 $ 833,656 Accounts payable 1,011,901 613,608 Accrued expenses 331,730 307,520 Debentures payable to related parties 128,000 Current amount on long-term debt 103,663 103,663 Total current liabilities 2,346,943 1,858,447 Long-term debt: Deferred tax liability 97,953 65,000 Long term debt less current maturities 2,347,607 2,393,822 Long term debt to related parties 0 128,000 Total long term liabilities 2,445,560 2,586,822 Total liabilities 4,792,503 4,445,269 Stockholders' Equity: Capital Stock 1,186,192 1,186,192 Retained earnings 1,518,792 1,524,294 2,704,984 2,710,486 Less Treasury Stock at cost 4,940 3,800 Total stockholders' equity 2,700,044 2,706,686 Total liabilities and stockholders equity $7,492,547 $7,151,955 THE COEUR DALENES COMPANY UNAUDITED CONSOLIDATED INCOME STATEMENT Six Months Ended March 25, 1998 and March 25, 1997 1998 1997 Net sales $6,569,918 $6,053,954 Cost of sales 4,982,770 4,473,000 Gross profit on sales 1,587,148 1,580,954 Selling, general and administrative expenses 1,472,339 1,590,634 Operating income (loss) 114,809 ( 9,680) Other income (expense) Interest income 16,319 12,788 Interest expense ( 149,882) (156,568) Other income 10,020 47,896 Total other expense ( 123,543) (95,884) Income (loss) before income tax expense ( 8,734) (105,564) Income tax (benefit) ( 3,232) (39,059) Net income (loss) $( 5,502) $( 66.505) Earnings (loss) per share $( 0.00 ) $( 0.01 ) Shares outstanding 5,352,553 5,353,561 THE COEUR D'ALENES COMPANY UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended March 25, 1998 and March 25, 1997 1998 1997 Net sales $3,341,378 $3,049,824 Cost of sales 2,502,300 2,276,804 Gross profit on sales 839,078 773,020 Selling, general and administrative expenses 733,575 760,052 Operating income 105,503 12,968 Other income (expense) Interest income 8,530 6,133 Interest expense (75,562) ( 79,176) Other income 2,493 18,329 Total other expense (64,539) ( 54,714) Income (loss) before income tax expense 40,964 ( 41,746) Income tax expense 15,157 ( 15,446) Net income (loss) $ 25,807 $ ( 26,300) Earnings (loss) per share $ 0.00 $ ( 0.00 ) Shares outstanding 5,352,553 5,353,561 THE COEUR D'ALENES COMPANY UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Ended March 25, 1998 and March 25, 1997 1998 1997 Cash flows from operating activities: Net loss ( 5,502) $ (66,505) Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation 129,150 110,134 Gain on disposal of assets ( 1,000) ( 35,723) Changes in assets and liabilities Accounts and notes receivable ( 22,060) 27,168 Inventories (419,521) 216,512 Prepaid expense and other current assets ( 23,870) ( 34,043) Other assets 18,976 ( 12,761) Accounts payable 398,293 (269,697) Accrued expenses 24,210 (197,317) Other liabilities 32,953 ________ Cash provided (used) by operating activities 131,629 (262,232) Cash flows from investing activities: Proceeds from sale of assets 1,000 98,860 Additions to property and equipment ( 52,692) (267,580) Cash used by investing activities ( 51,692) (168,720) Cash flows from financing activities: Net borrowing (repayment) under line of credit ( 62,007) 181,841 Principal repayment of long-term debt ( 46,215) ( 19,993) New long term note 0 262,000 Treasury shares repurchased ( 1,140) 0__ Cash provided (used) by financing activities ( 109,362) 423,848 Net decrease in cash ( 29,425) ( 7,104) Cash, beginning of period 89,495 68,645 Cash, end of period $ 60,070 $ 61,541 THE COEUR D'ALENES COMPANY CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies. Significant accounting policies followed for the six months ended March 25, 1998 are the same as those contained in the Summary of Significant Accounting Policies from the Company's audited financial statements as of September 27, 1997 and September 28, 1996. (2) Inventories. Inventories are summarized as follows: March 25, September 27, 1998 1997 Fabrication inventories: Raw materials $ 61,860 $ 74,501 Work-in-progress 318,580 293,181 Inventories, at FIFO cost 380,440 367,682 LIFO reserve ( 50,538) ( 50,538) Inventories, at LIFO cost 329,902 317,144 Distribution inventories, at FIFO 2,432,290 2,025,527 Total inventories 2,762,192 2,342,671 (3) Short-term bank borrowings. The Company has $1,850,000 in bank credit lines which mature on May 1, 1999. Interest is charged at the lenders prime rate plus .25%. At March 25, 1997, the operating line was still priced under the prior loan agreement which carried interest at the rate of the lenders prime rate plus .325%, or 8.57%. 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, 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 $2,200,000. (4) Capital Stock. The Company conducted two tender offers which expired during the current fiscal year. The offers resulted in 1,008 shares being repurchased as treasury stock with a total cost to the Company of $1,140. The purpose of the tender offers was to buy out odd lot holders of stock with diminimus value which cost the Company more to service than the value of the stock held. (5) Federal Income Tax Expense As of March 25, 1998 and September 27, 1997, the Company has a deferred long term tax liability of $65,000 resulting primarily from the use of accelerated methods of depreciation of fixed assets and a deferred tax asset of $46,000 resulting from vacation accrual and bad debt allowance. A valuation allowance on the Company's deferred tax assets has been established to the extent the Company believes it is more likely than not that the deferred tax assets will not be realized. 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 six months of the current fiscal year, the Company's working capital decreased from approximately $1,885,000 at the end of the prior fiscal year to approximately $1,832,000 as of March 25, 1998. The 3% decline is primarily the result of debentures in the amount of $128,000 moving from long term to current liabilities. These debentures are due at the end of October 1998. The operating line is adequate to retire this debt and currently has an interest rate 1-1/4% lower than the rate carried by the debentures. On January 26, 1998 the Company converted the real estate loan from a variable rate loan to an 8-1/2% fixed rate loan for the 228 months remaining on the term. 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 May 1, 1999. Results of Operations. Six Months Ended March 25, 1998 Sales of approximately $6,570,000 for the six month period ended March 25, 1998 are 8-1/2% higher than approximately $6,054,000 for the same six month period of the prior fiscal year. Gross margins, however, increased by less than 1/2% from approximately $1,581,000 for the first half of last year to approximately $1,587,000 during the same six month period of the current fiscal year. The steel service center sales represent approximately 87% of the total sales for the first six months of the current year compared to 80% for the first six months of the prior year. This reflects a 19% increase in the steel service center's sales volume over the first half of the prior year. Of that 19%, approximately 1/4 is the result of press brake work moving from the fabrication business to the steel service center business where there is a better fit. The remaining 3/4, or 14% is real sales growth. The fabrication business (contributing 13% and 20% of the total sales in the first six months of 1998 and 1997 respectively). After factoring out the shift of the press brake work experienced a sales decline of 24%. Since the business will experience gross margins from 10% to 20% higher as a percentage of sales then the distribution business, the increase in gross margins did not keep pace with the sales volume increase. Operating expenses at approximately $1,472,000 for the six month period ended March 25, 1998 were 7% lower than approximately $1,591,000 for the same period of the prior fiscal year. The $118,000 decrease was possible because the current fiscal year was not impacted by severe weather conditions, relocation of operations or nonproductive labor resulting from declining sales volume, as was the prior year. Interest expense, at approximately $150,000 for the six month period ended March 25, 1998 is 4% lower than approximately $157,000 for the same period of the prior year. The decrease was possible because of a slightly lower debt level during the first quarter and a lower interest rate on a real estate loan of approximately $1,911,000 during the second quarter of the current year. Other income at approximately $10,000 for the first six months of the current fiscal year compares to approximately $48,000 for the first half of the prior fiscal year. The decrease was anticipated as the prior year includes approximately $36,000 of gain on the disposal of surplus equipment. The surplus equipment was sold at the time of and immediately following the relocation of the fabrication business to its current location. The reduced operating costs for the first half of the year helped to reduce the size of the net loss to approximately $5,500 compared to a net loss of approximately $66,500 for the same period of the prior year. Three Months Ended March 25, 1998 Sales of approximately $3,341,000 for the second quarter of the current fiscal year are 10% higher than approximately $3,050,000 for the second quarter of the prior fiscal year. The steel service center business, which contributed 92% of the total sales for the three month period ended March 25, 1998, increased revenues by approximately 21% over the same period of the prior fiscal year when its sales represented 84% of the Company's sales. In October 1997 the press brake business was shifted from the fabrication business to the steel service center business. After eliminating the effect of the press brake business, the real increase in second quarter sales for the current year over the sales for same period of the prior year was 18%. The fabrication business represents 8% of the total sales for the second quarter of the current year and 16% for the same period of the prior year. After the same process of eliminating the effects of the business shift, the fabrication sales were down 40% in a comparison of sales for the three month period ended March 25, 1998 with sales for the three month period ended March 25, 1997. The decrease is the result of low demand in the Company's market area. Gross margins for the three month period ended March 25, 1998, at 25.1% of sales compared to 25.3% of sales for the same period of the prior fiscal year. With the higher volume of sales, gross margin dollars for the second quarter of the current fiscal year at approximately $839,000 exceed those of the prior year's second quarter at approximately $773,000 by 8-1/2% Operating expenses at approximately $734,000 for the three month period ended March 25, 1998 are 3% lower than approximately $760,000 for the same period of the prior fiscal year. The decrease is due primarily to the absence in the current year of some of the relocation related expenses that were present during the second quarter of last year. These expenses were mostly repair and maintenance on equipment that was unsettled in the relocation. Interest expense for the three month period ended March 25, 1998 at approximately $76,000 was only slightly lower than approximately $79,000 for the same period of the prior year The 4% decline was the result of a lower interest rate on a real estate loan. Higher sales volume and a lower expense load resulted in a net income of approximately $26,000 for the second quarter of the current year compared to a net loss of approximately the same amount for the three month period ended March 25, 1997. 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 by 22%. The company conducted two tender offers, one from August 1997 through October 15, 1997 and another from January 15, 1998 through March 15, 1998. These tender offers were made to holders of odd lot shares of 24 or fewer shares. As a result of the offers the Company purchased 1008 shares at a total cost of $1,140. 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: April 29, 1998 /s/ Marilyn A. Schroeder Marilyn A. Schroeder, Treasurer and Chief Financial Officer (Authorized Officer and Principal Accounting and Financial Officer) EX-27 2
5 6-MOS 12-MOS SEP-26-1998 SEP-27-1997 MAR-25-1998 SEP-27-1997 60,070 89,495 0 0 1,313,594 1,294,302 50,538 53,306 2,762,192 2,342,671 4,179,192 3,743,166 4,788,407 4,735,715 1,529,441 1,400,291 7,492,547 7,151,955 2,346,943 1,858,447 1,905,024 1,924,395 0 0 0 0 1,186,192 1,186,192 1,518,792 1,524,294 7,492,547 7,151,955 6,569,918 12,858,765 6,596,257 12,992,262 4,982,770 9,498,045 645,509 12,565,646 146,650 356,195 7,400 3,000 149,882 301,306 ( 8,734) 180,199 ( 3,232) 54,889 114,809 180,199 0 0 0 0 0 0 ( 5,502) 125,310 0.00 0.02 0.00 0.02
-----END PRIVACY-ENHANCED MESSAGE-----