UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM - 10QSB
[ x ] QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition from ___________ to _________
Commission File Number: 1-15277
Rampart Capital Corporation
(Exact Name of Registrant as specified in its charter)
TEXAS 6159 76-0427502
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
700 Louisiana
Suite 2510
Houston, Texas
(Address of Principal Executive Office)
77002
(Zip Code)
713-223-4610
(Registrant's Telephone Number)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date:
As of November 6, 2000, the number of shares outstanding of the
registrant's only class of common stock was 2,905,143.
Transitional Small Business Disclosure Format (check one):
Yes [ ]
No [ x ]
<PAGE>
<TABLE>
<CAPTION>
INDEX
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Unaudited Consolidated Financial Statements. . . . . . . . . Page No.
Consolidated Balance Sheets at December 31, 1999 (Audited)
and September 30, 2000 (Unaudited) . . . . . . . . . . . . . . 2
Unaudited Consolidated Statement of Operations for the Three
Months and Nine Months ended September 30, 1999 and 2000 . . . 3
Unaudited Consolidated Statement of Cash Flows for the Nine
Months ended September 30, 1999 and 2000 . . . . . . . . . . . 4
Notes to the Unaudited Consolidated Financial Statements. . . . 5
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 10
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
RAMPART CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 SEPTEMBER 30, 2000
(AUDITED) (UNAUDITED)
------------------- --------------------
ASSETS
<S> <C> <C>
Cash $ 2,741,787 $ 239,687
Purchased asset pools, net 2,447,194 2,214,109
Commercial ventures, net 3,657,423 8,263,643
Investment real estate 1,405,889 2,235,840
Notes receivable from related parties 460,754 481,506
Notes receivable other 850,000 3,417,116
Property and equipment, net 371,493 508,204
Other assets 63,162 159,633
------------------- --------------------
Total assets $ 11,997,702 $ 17,519,738
------------------- --------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 580,173 $ 7,390,590
Accounts payable and accrued expenses 481,563 407,449
Deferred tax liability 279,000 279,000
------------------- --------------------
Total liabilities 1,340,736 8,077,039
------------------- --------------------
Commitments and contingencies
Stockholders' equity
Common stock ($.01 par value; 10,000,000
shares authorized; 3,050,000 and 2,905,143
shares issued and outstanding at December
31, 1999 and September 30, 2000,
respectively 30,500 30,500
Paid-in-capital 6,194,255 6,194,255
Treasury stock, 144,857 shares, at cost - (378,499)
Retained earnings 4,432,211 3,596,443
------------------- --------------------
Total stockholders' equity 10,656,966 9,442,699
------------------- --------------------
Total liabilities and stockholders' equity $ 11,997,702 $ 17,519,738
------------------- --------------------
</TABLE>
See accompanying notes to consolidated financial statements
2
<PAGE>
<TABLE>
<CAPTION>
RAMPART CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ --------------------------
1999 2000 1999 2000
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net gain on collections on asset pools $ 573,405 $ 205,650 $ 1,287,834 $ 638,234
Investment real estate income 1,053,646 13,200 1,436,387 40,698
Commercial ventures income 277,105 733,293 690,393 1,656,652
Interest and other income 36,166 145,828 120,541 291,668
----------- ----------- ------------ ------------
Total revenue 1,940,322 1,097,971 3,535,155 2,627,252
Costs of real estate sales (257,621) (166,974) (460,724) (221,548)
Operating and other costs (24,015) (336,613) (275,082) (992,686)
General and administrative expenses (614,883) (662,554) (1,417,542) (2,085,453)
Interest expense (130,285) (107,933) (397,901) (186,333)
----------- ----------- ------------ ------------
Net income (loss) before income tax benefit 913,518 (176,103) 983,906 (858,768)
Income tax benefit 119,088 - 163,123 23,000
----------- ----------- ------------ ------------
Net income (loss) $1,032,606 $ (176,103) $ 1,147,029 $ (835,768)
----------- ----------- ------------ ------------
Basic net income (loss) per common share $ .44 ($.06) $ .50 ($.28)
----------- ----------- ------------ ------------
Diluted net income (loss) per common share $ .44 ($.06) $ .50 ($.28)
----------- ----------- ------------ ------------
Average common shares outstanding 2,328,261 2,916,550 2,276,471 2,986,137
----------- ----------- ------------ ------------
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE>
<TABLE>
<CAPTION>
RAMPART CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS
ENDED SEPTEMBER 30,
----------------------------
1999 2000
-------------- ------------
Cash flows from operating activities:
<S> <C> <C>
Net income (loss) $ 1,147,029 $ (835,768)
Adjustments to reconcile net income (loss) to net cash
provided (used) by operating activities:
Depreciation 40,602 121,898
Accrued interest income (13,125) (183,248)
Asset pool costs deducted in net gain on collections 545,383 278,276
Change in loan loss reserve (22,489) (53,337)
Cost of real estate 460,722 221,548
Purchase of asset pools (36,734) (6,608)
Other costs capitalized - (124,668)
Changes in operating assets and liabilities:
Other assets 375,143 (96,471)
Accounts payable and accrued expenses 100,811 (74,114)
Taxes payable (12,624) -
Deferred tax liability (159,000) -
-------------- ------------
Net cash provided (used) by operating activities 2,425,718 (752,492)
-------------- ------------
Cash flows from investing activities:
Purchase of commercial real estate (2,589,469) (5,346,334)
Purchase of investment real estate (620,820) (239,950)
Proceeds from notes receivable related parties (26,690) 2,519
Purchase of notes receivable - (2,453,124)
Proceeds from notes receivable - 45,985
Purchase of treasury stock - (378,499)
Purchase of assessment rights (850,000) -
Proceeds from purchased assessments 12,695 14,754
Purchase of property and equipment (256,808) (205,376)
-------------- ------------
Net cash used by investing activities (4,331,092) (8,560,025)
-------------- ------------
Cash flows from financing activities:
Proceeds from notes payable to related parties 1,400,000 -
Payments on notes payable to related parties (1,400,000) -
Proceeds from notes payables 2,949,068 7,941,507
Payments on notes payables (6,038,838) (1,131,090)
Proceeds from the sale of common stock 6,202,255 -
Proceeds from receivables from related parties 97,500 -
-------------- ------------
Net cash provided by financing activities 3,209,985 6,810,417
-------------- ------------
Net increase/(decrease) in cash 1,304,611 (2,502,100)
Cash at beginning of period 583,629 2,741,787
-------------- ------------
Cash at end of period $ 1,888,240 $ 239,687
-------------- ------------
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
RAMPART CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim financial information
-------------------------------
The accompanying unaudited financial statements for periods ended September 30,
1999 and September 30, 2000 have been prepared without audit in accordance with
generally accepted accounting principles for interim financial information on a
basis consistent with the annual audited consolidated financial statements and
with the instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The results of operations of interim periods are not necessarily indicative of
results to be expected for an entire year. In the opinion of management, all
adjustments (consisting of normal recurring accruals) and disclosures considered
necessary for a fair presentation of the results of operations and cash flows
for the periods presented have been included. The consolidated financial
statements should be read in conjunction with the Company's audited consolidated
financial statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999.
Principles of Consolidation
-----------------------------
The consolidated financial statements include the assets of Rampart Capital
Corporation and its wholly owned subsidiaries. The Company owns a 51% interest
in a partnership that is reported using the full consolidation method. The
consolidated financial statements of the Company include 100% of the assets and
liabilities of the partnership and the ownership interests of minority
participants are recorded as minority interest. All material inter-company
balances have been eliminated.
Commercial real estate
------------------------
Rents collected on commercial rental property are recognized as rental income as
collected, and revenues from the operation of commercial properties are
recognized as earned. Expenses of operating commercial properties are charged
to operations as incurred. Sales of commercial real estate are generally
recorded using the full accrual method of accounting for sales of real estate,
assuming the conditions for recognition are met.
Other income
-------------
Other income is comprised of interest income and miscellaneous revenue. Revenue
is recognized as earned.
Reclassifications
-----------------
Certain reclassifications have been made to the 1999 financial statements to
conform with the 2000 presentation. These reclassifications have no effect on
the 1999 net income or stockholders' equity.
NOTE 2 - NET INCOME (LOSS) PER COMMON SHARE
Net income (loss) per common share has been computed for all periods presented
and is based on the weighted average number of shares of common stock and common
stock equivalents outstanding during each period. There are no common stock
equivalents resulting from dilutive stock purchase warrants.
NOTE 3 - ACQUISITIONS
On January 7, 2000 the Company finalized the acquisition of a 51% interest in
Greater Houston Gulf Partners, LTD (the "Partnership). The Partnership was
formed to acquire, own, redevelop and sell condominiums (the "Project"). In
connection with the acquisition, the Company made a loan to the Partnership for
$1.1 million to provide financing for the acquisition of the Project. The
balance of the Project purchase price and developmental funds were provided to
the Partnership by a bank loan in the amount of $2.8 million and additional
loans of $700,000 by the partners.
5
<PAGE>
RAMPART CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 4 - SEGMENT REPORTING
The Company operates in four business segments: (i) purchased asset pools,
(ii) commercial ventures, (iii) investment real estate, and (iv) project
financing. The purchased asset pools segment involves the acquisition,
management, servicing and realization of income from collections on or sales of
portfolios of undervalued financial assets, and in some instances real estate
the Company may acquire as part of an asset pool or from foreclosing on the
collateral underlying an acquired real estate debt. The commercial ventures
segment involves holding foreclosed and acquired improved real estate and
operating businesses for appreciation and the production of income. The
investment real estate segment involves holding foreclosed and acquired
unimproved real estate for future appreciation and acquiring unimproved real
estate in conjunction with short-term funding for developers. The project
financing segment is comprised of short-term financing of real estate at high
yields and real estate notes held by the Company from financing the sale of
Company assets. The notes are fully secured with real estate or other
collateral. Financial information by reportable operating segment is as
follows:
<TABLE>
<CAPTION>
As of and for the nine months ended September 30, 2000
----------------------------------------------------------------------------------
Purchased Commercial Investment Project
Asset Pools Ventures Real Estate Financing Unallocated Totals
------------ ------------ ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 638,234 $ 1,656,652 $ 40,698 $ 247,988 $ 43,680 $ 2,627,252
Segment profit 298,301 (922,007) (138,445) 80,577 (177,194) (858,768)
Segment assets 2,214,109 7,783,690 2,235,840 3,417,116 1,868,983 17,519,738
Depreciation and amortization - 108,597 - - 13,301 121,898
Capital expenditures 6,647 5,288,723 364,617 2,453,125 33,325 8,146,437
Interest expense - 39,814 19,279 104,114 23,126 186,333
As of and for the nine months ended September 30, 1999
----------------------------------------------------------------------------------
Purchased Commercial Investment Project
Asset Pools Ventures Real Estate Financing Unallocated Totals
------------ ------------ ------------ ---------- ------------- -----------
Revenue $ 1,287,834 $ 690,393 $ 1,436,387 $ 116,625 $ 3,916 $ 3,535,155
Segment profit 558,351 (330,111) 818,826 58,727 (121,887) 983,906
Segment assets 3,086,326 3,552,339 1,260,830 1,290,625 2,010,289 11,200,409
Depreciation and amortization - 23,930 - - 16,672 40,602
Capital expenditures 63,424 2,836,239 620,820 850,000 - 4,370,483
Interest expense 125,521 193,494 51,962 26,924 - 397,901
</TABLE>
NOTE 5 - SUBSEQUENT EVENTS
On October 13, 2000 pursuant the Company's 1998 Stock Compensation Plan, the
Board of Directors granted to employees and directors options to purchase
372,000 shares of the Company's common stock for $3.50 per share.
6
<PAGE>
RAMPART CAPITAL CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1999
Revenues decreased ($907,903) from $3,535,155 during the nine months ending
September 30, 1999 to $2,627,252 for the same period in 2000. The decrease in
revenues consisted of declines in investment real estate revenues ($1,395,689),
and net gain on collections on asset pools ($649,600), offset by growth in
commercial ventures revenues of $966,259, project financing revenue of $131,363,
and unallocated interest and other income of $39,764. The decrease in
investment real estate revenues was mainly due to the sale of land in 1999 for
which there was no corresponding sale during 2000. The decrease in net gain on
collections on asset pools was due to timing of collections in normal business
operations as well as a declining pool of assets. The increase in commercial
real estate revenue was primarily due to an increase of $794,526 in the Newport
Golf Club and Conference Center ("Newport") operations, an increase of $242,427
in revenues from the Greater Houston Gulf Partner ("GHGP") condominium
conversion venture, offset by a ($70,694) decline in rentals, primarily at our
Dallas retail center.
General and administrative expenses ("G&A") increased $667,911 from $1,417,542
in the first nine months of 1999 to $2,085,453 in the same period of 2000. The
escalation in G&A was due to increases (1) in SEC compliance costs of $50,249,
(2) in labor costs of $245,858, (3) in property taxes of $101,651, and (4)
relating to Newport of $273,042, which were partially offset by a reduction of
$2,889 in other expenses. The increase in SEC compliance cost was related to
our being publicly held in the first three quarters of 2000 and privately held
through September 21, 1999. Labor costs increased due to the additional labor
needed to comply with the reporting requirements of a public company and general
wage increases. The property tax increase was due to valuation increases on
investment real estate and the Golf Club and Conference Center. The increase in
costs at Newport was mainly due to increased depreciation, increased utilization
of the facilities in 2000 as compared to 1999, and an additional six months of
operations in 2000. While Newport was acquired in February 1999, the golf
course was shut down for renovation from the first week of May 1999 through
November 1999.
Cost of real estate sales declined by ($239,176) from $460,724 for the nine
months ending September 30, 1999 to $221,548 for the same period in 2000. The
decline consisted of a ($460,724) reduction in the cost of investment real
estate sales made in 1999, with no corresponding sale in 2000, offset by
$221,548 of costs from commercial real estate sold in 2000. The 2000 real estate
sale involved condominiums that were part of the GHGP project started in early
2000.
Operating and other costs of $275,082 incurred during the nine months ending
September 30, 1999 and $992,686 for the same period in 2000, primarily relate to
the direct costs of operations of Newport. Although there has been a
significant increase in facility utilization, it has not yet reached breakeven.
Direct operating losses at Newport during the third quarter of 2000 were
($117,635) as compared to average quarterly direct operating losses of
($269,040) for the first two quarters of 2000. Management anticipates near
breakeven operations at Newport for 2001.
Interest expense decreased from $397,901 for the nine months ended September 30,
1999 to $186,333 for the same period in 2000. The decrease in interest expense
was primarily due to a reduction in the weighted average corporate debt
outstanding resulting from the retirement of the majority of our debt with
proceeds from the September 1999 initial public offering. Interest of $252,751,
relating to the bank loan and loans from partners secured by a 90-unit
condominium redevelopment project started in January 2000, was capitalized as
work in progress.
The net income (loss) before income taxes went from net income of $983,906
during the first nine months of 1999 to a net loss of ($858,768) for the same
period in 2000. The change in earnings before income taxes consisted of
increased losses of ($591,896) on commercial ventures and ($55,307) in
unallocated losses, reduced earnings of ($957,271) in investment real estate ,
($260,050) on net gains on collection on asset pools, offset by $21,850 of
increased earnings from project financing. With allocated corporate overhead,
the loss at Newport increased by ($527,000) over 1999, as a result of
management's emphasis on re-development and re-marketing programs for the
facility. The facility was acquired in February 1999 from a bankruptcy estate
and had not been actively marketed in many years. The ($957,271) reduction in
earnings from investment real estate was primarily due to sales in 1999 for
which there were no recurring sales in 2000. The ($55,307) increase in
unallocated losses consisted of an increase in unallocated general and
administrative expense of $95,072 primarily from increases in SEC compliance
costs offset by an increase in unallocated interest and other income of $39,765.
Income tax benefit was $163,123 in 1999 compared to $23,000 in 2000. We have
available significant net operating loss carryforwards that were primarily
generated from the acquisition of certain corporate subsidiaries and assets of
MCorp Trusts in September 1997. Due to the availability of net operating loss
carryforwards and other net deferred tax assets, we offset our taxable income
during 1999 and adjusted its valuation allowance accordingly.
7
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1999
Revenues decreased ($842,350) from $1,940,321 during the three months ending
September 30, 1999 to $1,097,971 during the third quarter of 2000. The decrease
in revenues consisted of declines in investment real estate revenues
($1,040,446), net gain on collections on asset pools ($367,755), offset by
growth in commercial ventures revenues of $456,188, project financing revenue of
$90,889, and interest and other income of $18,773. The decrease in investment
real estate revenues was mainly due to the sale of land in 1999 for which there
was no corresponding sale during the third quarter of 2000. The decrease in net
gain on collections on asset pools was due to a decreasing portfolio of asset
pools and to timing of collections in normal business operations. The increase
in commercial real estate revenue was primarily due to an increase of $306,384
in Newport operations, an increase of $175,836 in revenues from the Greater
Houston Gulf Partners condominium conversion venture, offset by a ($26,032)
decline in rents. The project financing increase was from new projects ($2.5
million) being financed late in the second quarter.
General and administrative expenses ("G&A") increased $47,671 from $614,883 in
the third quarter of 1999 to $662,554 in the same period of 2000. The increase
in G&A was primarily due to labor costs of $58,004 incurred to comply with our
public company reporting requirements and general wage increases.
Cost of real estate sales declined ($90,647) from $257,621 for the three months
ending September 30, 1999 to $166,974 for the same period in 2000. The decline
consisted of a ($257,621) reduction in the cost of investment real estate sales
made in 1999, with no corresponding sale in 2000, offset by $166,974 of costs
from commercial real estate sold in 2000. The 2000 real estate sale involved
condominiums that were part of the GHGP project started in early 2000.
Operating and other costs of $24,015 incurred during the quarter ending
September 30, 1999 and $336,613 incurred for the same period in 2000, primarily
relate to the direct costs of operations of Newport.
Interest expense decreased from $130,285 in the third quarter of 1999 to
$107,933 for the same period in 2000. The decrease in interest expense was
primarily due to a reduction in the weighted average debt corporate outstanding
resulting from the retirement of the majority of our debt with proceeds from the
September 1999 initial public offering. Interest of $128,589, relating to the
bank loan and loans by partners secured by a 90-unit condominium redevelopment
project started in January 2000, was capitalized as work in progress.
The net income (loss) before income taxes went from net income of $913,518
during the third quarter of 1999 to a net loss of ($176,103) for the same period
in 2000. The change in earnings before income taxes consisted of increased
losses of ($247,547) on commercial ventures, reduced earnings of ($808,770) in
investment real estate sales and net gain on collections on asset pools of
($167,960), offset by increased earnings on project financing of $58,023 and
decreased unallocated losses of $76,633. The increased loss on commercial
ventures was primarily related to Newport. The reduction in earnings from
investment real estate was primarily due to sales in 1999 for which there were
no recurring sales in 2000. Decreased net gains on collections on asset pools
were related to a decrease in pooled assets as collections are occurring faster
than new product can be economically acquired.
Income tax benefit was $119,088 in 1999 with no corresponding tax benefit
recorded in 2000. We have available significant net operating loss
carryforwards which were primarily generated from the acquisition of certain
corporate subsidiaries and assets of MCorp Trusts in September 1997. Due to
the availability of net operating loss carry forwards and other net deferred tax
assets, we offset our taxable income during 1999 and adjusted its valuation
allowance accordingly.
LIQUIDITY AND CAPITAL RESOURCES
We had cash and cash equivalents of $2,741,787 at December 31, 1999 compared to
approximately $239,687 at September 30, 2000.
During 2000, we continued to invest a substantial portion of our cash reserves
in various projects, most notably was a $1.5 million investment in a 90-unit
condominium redevelopment project. This investment represented loans to a
single purpose commercial real estate company, which we control, earning
interest at prime rate plus two percent on the first $1.1 million and 18% on the
funds advanced in excess of $1.1 million. The minority interest owners
guaranteed the loans.
Additionally, we invested $521,900 for renovation at Newport, which is
materially completed.
Cash flow from financing activities during the three quarters ending September
30, 2000 was $6.8 million, consisting of a third party first mortgage of $2.8
million and a loan from a minority interest partner for $400,000, secured by the
condominium redevelopment project owned by Greater Houston Gulf Partners, Ltd.,
a 51% majority owned partnership, and net draws against our credit facility of
$3.6 million. We believe that we have structured the condominium development
project so that Rampart is insulated from any direct liability on the $2.8
million first mortgage and the loan from the minority interest partner. If the
minority interest owners' default, we can foreclose their interest and, at our
option, service or pay off the debt. The $3.6 million in draws against our
credit facility were used to (1) acquire $2.5 million in high-yield loans
secured by real estate projects, (2) $236,000 in investment real estate, (3)
$431,000 of the improvements at Newport, (4) $150,000 advanced for condominium
conversion, (5) funding the purchase of $283,000 of treasury stock, and (6)
$57,000 of operating losses at Newport.
8
<PAGE>
Due to the capital-intensive nature of our business, we have experienced, and
expect to continue to experience substantial working capital needs. We believe
that cash flows from operations and future borrowings available under our
revolving credit facility will be sufficient to fund our capital expenditures
and working capital requirements as they come due.
On April 30, 2000, we renewed our $5,000,000 revolving promissory note to mature
on December 31, 2000. This revolving credit facility is secured by notes
receivable and real estate in the purchased asset pools, the commercial and
investment real estate, the notes receivable from project financing, and
equipment. Principal is payable at maturity with interest payable monthly at
the bank's prime rate plus 1.0% per annum (9.5% and 10.5% as of December 31,
1999 and September 30, 2000, respectively). During 1999, we repaid the
outstanding debt balance of $3,660,000 and accrued interest with proceeds from
our initial public offering. Management is negotiating with this bank and other
financial institutions to increase the amount of credit facilities available.
The Revolving Credit Facility provides for certain financial covenants. As of
the filing date of this quarterly report, we are in compliance with these
covenants.
STOCK REPURCHASES
On January 11, 2000, the Board of Directors approved a stock repurchase plan
under Rule 10b-18 promulgated under the Securities Exchange Act of 1934, for the
purchase of up to $2.0 million worth of our outstanding common stock in open
market transactions. Acquired shares will be held as treasury stock, and will
be available for future acquisitions and financing or for awards granted under
our 1998 Stock Compensation Plan. As of September 30, 2000, we had acquired
144,857 shares at a total cost of $378,499 or $2.60 per share of which 78,030
shares at a total cost of $184,645 or $2.37 per share were purchased during the
third quarter. We intend to continue repurchasing shares subject to SEC
restrictions and the American Stock Exchange continued listing requirements.
FORWARD LOOKING STATEMENTS
This quarterly report on Form 10-QSB contains "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this report including,
without limitation, statements regarding our business strategy, plans,
objectives, expectations, intent, and beliefs of management for future
operations are forward-looking statements. Such statements are based on certain
assumptions and analyses made by our management in light of their experience and
their perception of historical trends, current conditions, expected future
developments and other factors they believe to be appropriate. The
forward-looking statements included in this report are also subject to a number
of material risks and uncertainties. Important factors that could cause actual
results to differ materially from our expectations include (1) tightening of the
credit markets, (2) volatility in the real estate markets and interest rates,
(3) emerging competition, (4) changes in regulations in the industries we serve,
and (5) general economic declines, particularly within the regions in which we
operate. Forward-looking statements are not guarantees of future performance
and actual results, as developments and business decisions may differ from those
contemplated by such forward-looking statements.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - See "Index of Exhibits" below which lists the documents filed
as exhibits herewith.
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended September 30, 2000.
10
<PAGE>
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Rampart Capital Corporation
By: /s/ C. W. JANKE November 10, 2000
------------------------------- -------------------
C. W. Janke
Chairman of the Board
Chief Executive Officer
(Principal Executive Officer)
By: /s/ J. H. CARPENTER November 10, 2000
------------------------------- -------------------
J. H. Carpenter
President
Chief Operating Officer
By: /s/ CHARLES F. PRESLEY November 10, 2000
------------------------------- -------------------
Charles F. Presley
Vice-President
Chief Financial Officer
Treasurer
(Principal Financial Officer)
11
<PAGE>
RAMPART CAPITAL CORPORATION
EXHIBITS TO FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
INDEX OF EXHIBITS
EXHIBIT
NO. DESCRIPTION
------- ---------------------------------------------------------------------------------------------------------
<S> <C>
Restated Articles of Incorporation (Exhibit 3.1 to Rampart's Registration Statement on
3.1 Form SB-2 (Reg. No. 333-71089) and incorporated herein by reference).
Bylaws (Exhibit 3.2 to Rampart's Registration Statement on Form SB-2 (Reg. No. 333-71089)
3.2 and incorporated herein by reference).
Form of Warrant Agreement Between Rampart and American Stock Transfer and Trust Company (Exhibit 4.1 to
4.1 Rampart's Registration Statement on Form SB-2 (Reg. No. 333-71089) and incorporated herein by reference).
*27.1 Financial Data Schedule.
<FN>
--------------------
* Filed herewith.
</TABLE>
12
<PAGE>
