PAGE>
FORM 10-QSB - Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the period ended December 31, 1998
----------------------------
or
[ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities
Exchange act of 1934.
For the transition period from to
------------------ ------------------
Commission File Number 0-22027
---------------------------
ROCKY MOUNTAIN POWER CO.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 84-0503585
----------------------------- ---------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
12835 E. Arapahoe Road, T-II, Ste. 110, Englewood, CO 80046
----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 792-2466
--------------------------------------------------
(Registrant's telephone number, including area code)
---------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of December 31, 1998, Registrant had 607,853 shares of common stock, $.05
par value, outstanding.
<PAGE>
INDEX
Page
Number
--------
Part I. Financial Information
Item I. Financial Statements
Balance Sheets as of December 31, 1998
and June 30, 1998 2
Statement of Operations, Three Months Ended
December 31, 1998 and December 31, 1997 3
Statement of Operations, Six Months Ended
December 31, 1998 and December 31, 1997 4
Statement of Cash Flows, Three Months Ended
December 31, 1998 and December 31, 1997 5
Statement of Cash Flows, Six Months Ended
December 31, 1998 and December 31, 1997 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of Operations 8
Part II. Other Information 9
Item 1. Financial Data Schedule 10
-1-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
------
<TABLE>
<CAPTION>
December 31, June 30,
1998 1998
------------ ------------
<S> <C> <C>
Current Assets:
Cash $ 74,039 $ 70,229
Certificates of purchase, real estate
foreclosures 22,786 799,801
Real estate held for sale 973,989 -
Mortgage notes receivable, current
portion 308,500 301,574
Mortgage note receivable, related party 139,079 139,079
Deferred income taxes receivable, current 4,626 4,626
Other 26,090 26,685
--------- ---------
Total Current Assets 1,549,109 1,341,994
Real estate, net of accumulated deprec-
iation of $4,750 at December 31, 1998 and
$4,000 at June 30, 1998 235,567 244,317
Transportation equipment, net of accumulated
depreciation of $4,625 at December 31, 1998
and $3,125 and June 30, 1998 10,375 11,875
Equipment, net of accumulated depreciation of
$511 at December 31, 1998 and $0 at June 30,
1998 - -
Mortgage notes receivable, net of current
portion 724,833 814,010
Other 57,213 57,213
------- --------
TOTAL ASSETS $ 2,577,097 $ 2,469,409
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 5,332 $ 6,931
Notes payable, current portion 412,833 318,519
Income taxes payable 19,700 39,531
Deferred taxes payable, current portion 1,678 1,621
Other 18,762 22,243
-------- --------
Total Current Liabilities 458,305 388,845
Deferred taxes payable, long term 35,906 35,906
Notes payable, net of current portion 24,138 28,109
------- -------
TOTAL LIABILITIES 518,349 452,860
------- -------
Stockholders' Equity:
Preferred stock, $25.00 par value, 200,000
shares authorized, none issued & outstanding - -
Common stock, $.05 par value, 100,000,000
shares authorized, 607,853 shares issued
and outstanding 30,393 30,393
Additional paid-in capital 1,610,988 1,610,988
Retained earnings 417,367 375,168
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 2,058,748 2,016,549
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,577,097 $ 2,469,409
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-2-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, December 31,
1998 1997
------------- --------------
<S> <C> <C>
Revenue:
Rent income 5,250 7,620
Interest income 41,397 41,892
Management fee income - 19,650
Gain on disposition of assets 2,681 -
Other income - -
-------- -------
49,328 69,162
-------- -------
Operating Expenses:
Depreciation 1,636 5,043
Interest 257 22,074
Rent - 7,279
Contract services 2,198 10,790
Auditing and accounting 5,190 7,622
Property taxes 1,141 726
Other 607 6,653
------- -------
11,029 60,187
------- -------
Net income before provision
for income taxes 38,299 8,975
Provision for income taxes 13,194 920
------- ------
Net income $ 25,105 $ 8,055
======== ========
Per Share $ .04 $ .01
======= ========
Weighted Average Shares Outstanding 607,853 752,537
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31, December 31,
1998 1997
------------- --------------
<S> <C> <C>
Revenue:
Rent income $ 9,460 $ 20,888
Interest income 69,325 79,586
Inspection fee income - 23,200
Gain on disposition of assets 2,759 -
Other 6,400 -
-------- -------
87,944 123,674
-------- --------
Expenses:
Depreciation 2,761 9,999
Interest 257 37,503
Rent - 13,661
Contract services 4,293 15,606
Audit and accounting 9,615 10,785
Property taxes 3,258 4,637
Other 3,071 9,696
-------- -------
23,255 101,887
-------- -------
Net income before provision
for income taxes 64,689 21,787
Provision for income taxes 22,490 4,357
------- ------
Net income $ 42,199 $ 17,430
======= ======
Per Share $ .07 $ .02
======= =======
Weighted Average Shares Outstanding 607,853 752,537
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
December 31, December 31,
1998 1997
-------------- -------------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 25,105 $ 8,055
Depreciation 1,636 5,043
(Decrease) in income taxes payable (5,652) (5,660)
(Decrease) in deferred income taxes payable - (4,607)
(Decrease) in accounts payable and accrued
expenses (2,800) (713)
Common stock issued for services - 8,886
Other (779) (3,496)
-------- -------
Net Cash Provided by Operating Activities 17,510 7,508
-------- ------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase - (879,064)
Proceeds from redemptions of certificates
of purchase 432,360 423,516
(Investment) in equipment (511) -
Collection of notes receivable 35,978 7,847
Other 16,906 1,703
------- ------
Net Cash (Used in) Investing Activities 484,733 (445,998)
------- -------
Cash Flows from Financing Activities:
Proceeds from bank notes payable 20,000 -
(Repayment of) bank notes payable (485,886) (134,300)
(Repayment of) mortgage notes payable (1,985) (2,142)
(Repayment of) loan from related party - (150,000)
------- -------
Net Cash Provided by (Used in) Financing
Activities (467,871) (286,442)
------- -------
(Decrease) in Cash 34,372 (724,932)
Cash, Beginning of Period 39,667 1,159,431
------ ---------
Cash, End of Period $ 74,039 434,499
======= ========
Interest Paid $ 17,730 $ 22,074
======= =======
Income Taxes Paid $ 18,321 $ 11,187
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31, December 31,
1998 1997
------------- ------------
<S> <C> <C>
Cash Flows Operating Activities:
Net income $ 42,199 $ 17,430
Depreciation 2,761 9,999
(Decrease) in income taxes payable (19,831) (5,560)
(Decrease) in deferred income taxes payable - (4,607)
(Decrease) in accounts payable
and accrued expenses (1,599) (12,504)
Common stock issued for services - 8,886
Other 652 5,231
------- -------
Net Cash Provided by Operating Activities 24,182 18,875
------- -------
Cash Flows from Investing Activities:
(Investments) in certificates of purchase (1,174,401) (1,592,656)
Proceeds from redemptions of certificates of
purchase 727,140 1,213,665
(Investment) in equipment (511) -
Collection of notes receivable 90,251 10,129
Other 16,906 12,523
-------- -------
Net Cash Provided by (Used in) Investing
Activities (340,615) (356,339)
-------- -------
Cash Flows from Financing Activities:
Proceeds from bank notes payable 810,100 -
(Repayment) of bank notes payable (485,886) (596,130)
(Repayment of) mortgage notes payable (3,971) (6,933)
(Repayment of) loan from related party - (150,000)
-------- -------
Net Cash Provided by (Used in) Financing
Activities 320,243 (753,063)
------- -------
Increase (Decrease) in Cash 3,810 (1,090,527)
------- ---------
Cash, Beginning of Period 70,229 1,159,431
======= =========
Cash, End of Period $ 74,039 68,904
======= =========
Interest Paid $ 33,314 $ 37,503
======= ========
Income Taxes Paid $ 42,321 $ 14,524
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements.
-6-
<PAGE>
ROCKY MOUNTAIN POWER CO.
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
(Unaudited)
(1) Condensed Financial Statements
-------------------------------
The financial statements included herein have been prepared by Rocky
Mountain Power Co. without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted as allowed by such rules and regulations, and
Rocky Mountain Power Co. believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the June 30, 1998 audited
financial statements and the accompanying notes thereto. While management
believes the procedures followed in preparing these financial statements
are reasonable, the accuracy of the amounts are in some respect's
dependent upon the facts that will exist, and procedures that will be
accomplished by Rocky Mountain Power Co. later in the year.
The management of Rocky Mountain Power Co. believes that the accompanying
unaudited condensed financial statements contain all adjustments
(including normal recurring adjustments) necessary to present fairly the
operations and cash flows for the periods presented.
-7-
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Rocky Mountain Power Co. (the "Company") was organized as a Colorado
corporation on September 30, 1958. The Company is principally in the real
estate ownership and rental business. The Company also invests in mortgage
notes receivable and certificates of purchase related to real estate
foreclosures. Certain statements in the Report are forward-looking. Actual
results of future events could differ materially.
The following discussion of the financial condition and results of operations of
the Company relates to the three and six months ended December 31, 1998 and
1997, and should be read in conjunction with the financial statements and
notes thereto included elsewhere in this Report. The Company has selected
June 30 as its year end.
Results of Operations
- ---------------------
Revenue for the three and six month periods ended December 31, 1998 decreased
from the three and six month periods ended December 31, 1997 as follows:
1997 1998 Decrease
--------- --------- --------
Three Months Ended December 31,1998 $ 69,162 $ 49,328 $ 19,834
Six Months Ended December 31, 1998 $123,674 $ 87,944 $ 35,730
Revenue decreased principally due a change in the Company's business whereby
it no longer does property inspections. The revenue for property inspections
totaled $19,650 and $23,200 during the three and six month periods ended
December 31, 1997. The Company had no income from property inspections during
the three and six month periods ended December 31, 1998. Rent income during
the six month period ended December 31, 1998 was $9,460 as compared to
$20,888 during the six month period ended December 31, 1997, a decrease of
$11,428 due to a decrease in rental real estate owned.
Expenses for the three and six month periods ended December 31, 1998 decreased
from the three and six month periods ended December 31, 1997 as follows:
1997 1998 Decrease
---------- ---------- ----------
Three Months Ended December 31,1998 $ 60,187 $ 11,029 $ 49,158
Six Months Ended December 31, 1998 $101,887 $ 23,255 $ 78,632
Operating expenses decreased principally due to the following:
The Company incurred rent expense on the ground lease cost of the
Racquetball/Health Club facility which totaled $7,279 and $13,661 during the
three and six month periods ended December, 31, 1997, respectively. Since the
property was sold during June 1998 no ground lease expenses were incurred
during the three and six month periods ended December 31, 1998.
Also, contract service expenses decreased from $10,790 to $2,198, a decrease
of $8,592, when comparing the three month periods ended December 31, 1998 and
1997, due to the Company no longer performing property inspection services.
Contract services also decreased from $15,606 to $4,293, a decrease of
$11,313, when comparing the six month periods ended December 31, 1998 and
1997.
-8-
<PAGE>
Interest expenses were $22,074 and $37,503 during the three and six month
periods ended December 31, 1997, as compared to interest expenses of $257
during the three and six month periods ended December 31, 1998, resulting in
decreases of $21,817 and $37,246, respectively.
Net income after provision for income taxes amounted to $25,105 during the
three month period ended December 31, 1998 as compared to $8,055 during the
three month period ended December 30, 1997, an increase of $17,050.
Net income after provision for income taxes amounted to $42,199 during the
six month period ended December 31, 1998 as compared to $17,430 during the
six month period ended December 31, 1997, an increase of $24,769.
Liquidity and Capital Resources
- -------------------------------
Working capital was $953,149 at June 30, 1998 as compared to $1,090,804 at
December 31, 1998, and increase of $137,655. The Company's stockholders'
equity was $2,016,549 at June 30, 1998 as compared to $2,058,748 at December
31, 1998, an increase of $42,199, related to the net income of the Company
for the six month period then ended.
The Company has made no commitments that would require any material increase
in capital resources. The Company's financial condition has not been
affected by the modest inflation of the recent past. The Company believes
that future inflation, if any, would not materially affect the results of
operations, other than interest rates on the line of credit which are based
on a floating rate over prime would be higher. Also the values and rental
rates on the Company's real estate could be affected by future inflation, in
any.
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.
(Registrant) ROCKY MOUNTAIN POWER CO.
(Date) January 20, 1998
By(Signature) /s/ Michael L. Schumacher
(Name and Title) Michael L. Schumacher, Chief
Executive Officer and Principal
Accounting Officer
-9-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1998
<CASH> 74,039
<SECURITIES> 0
<RECEIVABLES> 1,282,489
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,549,109
<PP&E> 965,661
<DEPRECIATION> 5,261
<TOTAL-ASSETS> 2,577,097
<CURRENT-LIABILITIES> 458,305
<BONDS> 0
0
0
<COMMON> 607,853
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,577,097
<SALES> 0
<TOTAL-REVENUES> 49,328
<CGS> 0
<TOTAL-COSTS> 11,029
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 257
<INCOME-PRETAX> 38,299
<INCOME-TAX> 13,194
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,105
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
