-----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, Rt51AJmWpL/J0HS40Dxm6+RHqLDoK7m8ZoLWD4JTtoN02KCuoIJjyXh62MZXjEoH TP5f1OAV9vzregnhBJ0xPw== 0000861502-00-000002.txt : 20000208 0000861502-00-000002.hdr.sgml : 20000208 ACCESSION NUMBER: 0000861502-00-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991230 FILED AS OF DATE: 20000207 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: SEC FILE NUMBER: 001-10676 FILM NUMBER: 525109 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, 1999.. [ ] 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. 5,344,233 shares of common stock, no par value, were outstanding as of February 3, 2000. 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, 1999 and December 25, 1998 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 25, 1999. Index of Financial Statements Page Consolidated Balance Sheets - December 25, 1999 and September 25, 1999 3 Unaudited Consolidated Income Statements - Three Months Ended December 25, 1999 and December 25, 1998 4 Unaudited Consolidated Statement of Cash Flows - Three Months Ended December 25, 1999 and December 25, 1998 6 Condensed Notes to Unaudited Consolidated Financial Statement 7 THE COEUR D ALENES COMPANY CONSOLIDATED BALANCE SHEET December 25, 1999 and September 25, 1999 December 25, 1999 September 25, 1999 ASSETS (Unaudited) (Audited) Current Assets: Cash $ 21,134 $ 32,422 Accounts receivable 992,408 1,019,063 Inventory 2,266,651 2,464,247 Other current assets 96,326 86,305 Total current assets 3,376,519 3,602,037 Property and Equipment 5,106,520 5,059,408 Less accumulated depreciation 1,770,482 1,715,242 Net property and equipment 3,336,038 3,344,166 Other assets 47,057 67,777 Total assets $6,759,614 $7,013,980 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Short term bank borrowings $ 372,236 $ 367,553 Accounts payable 558,997 540,154 Accrued expenses 236,864 297,271 Current amount on long-term debt 165,959 164,241 Debentures payable to related Parties 0 128,000 Total current liabilities 1,334,056 1,497,219 Long-term debt: Deferred tax liability 156,000 156,000 Long term debt less current maturities 2,224,866 2,266,399 Total long term liabilities 2,380,866 2,422,399 Total liabilities 3,714,922 3,919,618 Stockholders' Equity: Capital Stock 1,186,192 1,186,192 Retained earnings 1,868,180 1,917,230 3,054,372 3,103,422 Less Treasury Stock at cost 9,680 9,060 Total stockholders' equity 3,044,692 3,094,362 Total liabilities and stockholder's equity $6,759,614 $7,013,980 THE COEUR D ALENES COMPANY UNAUDITED CONSOLIDATED INCOME STATEMENT Three Months Ended December 25, 1999 and December 25, 1998 1999 1998 Net sales $2,899,112 3,507,646 Costs of sales 2,145,119 2,686,694 Gross profit on sales 753,993 820,953 Selling, general and administrative expenses 775,786 790,600 Operating income (loss) <21,793> 30,353 Other income (expense) Interest income 8,360 12,532 Interest expense <65,050> <76,651> Other income 625 4,910 Total other expense <56,065> <59,209> Loss before income tax expense <77,858> <28,856> Income tax benefit <28,808> <10,677> Net loss $ <49,050> $ <18,179> Loss per share $ < 0.01> $ < 0.00> Shares outstanding 5,344,233 5,348,735 THE COEUR D'ALENES COMPANY UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS Three Months Ended December 25, 1999 and December 25, 1998 1999 1998 Cash flows from operating activities: Net loss $<49,050> $< 18,179> Adjustments to reconcile net income to cash provided (used) by operating activities: Depreciation 55,440 65,283 Changes in assets and liabilities Accounts and notes receivable 26,655 <163,720> Inventories 197,596 346,225 Other current assets < 10,021> < 25,382> Other assets 20,720 20,741 Accounts payable 18,843 516,327 Accrued expenses < 60,407> <142,128> Cash provided by operating activities 199,776 599,167 Cash flows from investing activities: Additions to property and equipment < 47,312> < 64,010> Cash flows used by investing activities < 47,312> < 64,010> Cash flows from financing activities: Purchase of treasury stock < 620> < 1,000> Net borrowing (payments) borrowings under line of credit 4,683 <538,588> Principal repayment of long-term debt < 167,815> < 32,130> Cash used by financing activities <163,752> <571,718> Net decrease in cash < 11,288> < 36,561> Cash, beginning of period 32,422 39,486 Cash, end of period $ 21,134 $ 2,925 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, 1999 are the same as those contained in the Summary of Significant Accounting Policies from the Company's audited financial statements as of September 25, 1999 and September 26, 1998. (2) Inventories. Inventories are summarized as follows: December 25, September 25, 1999 1999 Fabrication inventories: Raw materials $ 11,225 $ 27,372 Work-in-progress 384,019 401,899 Inventories at FIFO cost 395,244 429,271 LIFO reserve <15,018> <15,018> Inventories at LIFO cost 380,226 414,253 Distribution inventories at FIFO 1,886,425 2,049,994 Total inventories $2,266,651 $2,464,247 (3) Short-term bank borrowings. The Company has a $1,850,000 bank credit line for revolving credit requirements which is subject to renewal on May 1, 2000. Interest is charged at the lender's prime rate plus .25%, 8.75% at December 25, 1999. 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. At December 25, 1999 the Company was in compliance with all of its bank covenants. (4) Capital Stock. The Company made a tender offer to shareholders with holdings of one hundred or fewer shares beginning in January 1999 and which has been extended through June 30, 2000. The purchase price for the shares was $10 for each shareholder with 24 or fewer, $20 for each shareholder with more than 24 but less than 50 shares, $30 for each shareholder with more than 49 but less than 75 shares and $40 for each shareholder with more than 74 but no more than 100 shares. The total shares tendered so far is 4,502 shares for a total purchase price of $2,330. (5) Federal Income Tax Expense As of December 25, 1999 and September 25, 1999, the Company has a deferred long term tax liability of $156,000 resulting primarily from the use of accelerated methods of depreciation of fixed assets and a deferred tax asset of $65,000 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 three months of the current fiscal year, the Company's working capital declined from approximately $2,104,000 on September 25,1999 to approximately $2,042,000 as of December 25, 1999. The $62,000 decline is primarily the result of operating losses. The Company converted a construction loan in the amount of $1,950,000 to a permanent real estate 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. As of January 26, 1998, the loan rate was fixed at 8-1/2%. An additional loan fee in the amount of $4,779 was paid to exercise the conversion feature. The loan matures in January 2007. During the current fiscal year the Company has invested over $47,000 in new equipment and it is likely that the Company will want to invest in additional processing equipment for the distribution business. The additional cost is expected to be approximately $100,000. 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 May 1, 2000. 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 $2,899,000 for the three month period ended December 25, 1999 are approximately 17% lower than approximately $3,508,000 for the same period of time in the prior year. Gross margins decreased by approximately 8% to $754,000 for the period ended December 25, 1999 from approximately $821,000 for the same period of time in 1998. With a 16% decline in net revenues, the steel service center sales at approximately $2,503,000 represent 86% of the total sales for the first three months of the current fiscal year compared to 82%, or approximately $2,855,000 for the first quarter of the prior fiscal year. The fabrication business contributed 14% of the total first quarter sales for the current fiscal year and 18% for the same period of the prior year. Overall gross margins as a percent of sales improved from 23% during the first quarter of the prior fiscal year to 26% for the first quarter of the current year. Selling, general and administrative expenses at approximately $776,000 for the quarter ended December 25, 1999 are 2% lower than approximately $791,000 for the three month period ended December 25, 1998. A shortage of skilled labor created a need for more training than usual and therefore the expense load did not decline as fast as the sales decline. Interest expense at approximately $65,000 for the three month period ended December 25, 1999 is 16% lower than approximately $77,000 for the three month period ended December 25, 1998. The decrease is primarily due to the lower cost of inventories resulting in less dependence on the operating line of credit. Replacement costs are likely to be higher during the current fiscal year. Lower sales volume and high labor costs during the first quarter of the current fiscal year resulted in a net loss of $49,050 compared to a net loss of $18,179 for the first quarter of the prior fiscal year. PART II. OTHER INFORMATION. Item 1. Legal Proceedings. None. Item 2. Changes in Securities. At September 25, 1999, the Company owed $128,000 to related parties pursuant to the terms of a convertible debenture agreement. The debentures required semi-annual interest payments and were secured by the Company's land and building. In October 1998, the agreement was amended from an interest rate of 9.25% to 8.75% and from a due date of October 31, 1998 to October 31, 1999. The debentures were repaid at the end of October 1999. The Company is conducting a tender offer on odd lot shares beginning January 1999 with an extended expiration date of June 30, 2000. As a result of the offer, the Company has purchased to date 4,502 shares for a total cost of $2,330. 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 9, 1999 /s/ Marilyn A. Schroeder Marilyn A. Schroeder, Treasurer and Chief Financial Officer (Authorized Officer and Principal Accounting and Financial Officer) 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 9, 1999 ________________________________ 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-30-2000 SEP-25-1999 DEC-25-1999 SEP-25-1999 21,134 32,422 0 0 1,080,570 1,086,229 70,416 67,166 2,266,651 2,464,247 3,376,519 3,602,037 5,106,520 5,059,408 1,770,482 1,715,242 6,759,614 7,013,980 1,334,056 1,407,219 2,546,825 2,586,640 0 0 0 0 1,186,192 1,186,192 1,858,500 1,908,170 6,759,614 7,013,980 2,899,112 12,247,713 2,908,097 12,334,238 2,145,119 8,957,654 2,892,097 11,944,322 36,242 308,226 3,000 12,000 65,050 248,006 (77,858) 202,130 (28,808) 60,220 (77,858) 202,130 0 0 0 0 0 0 (49,050) 141,910 (0.01) 0.03 0.00 0.02
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