UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from.......... to..........
Blue Ridge 0-28-44
Commission File No.: Big Boulder 0-28-43
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
State or other jurisdiction of incorporation or organization:Pennsylvania
24-0854342 (Blue Ridge)
I.R.S. Employer Identification Number: 24-0822326 (Big Boulder)
Address of principal executive office: Blakeslee,Pennsylvania
Zip Code: 18610
Registrant's telephone number, including area code: (717)-443-8433
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 and Exchange
Act of 1934 during the preceding 12 months (or for such 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__________
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period of this report:
Class Outstanding at February 28, 1995
Common Stock, without par value, 2,004,014
stated value $.30 per combined share*
*Under a Security Combination Agreement between Blue Ridge Real Estate
Company ("Blue Ridge") and Big Boulder Corporation ("Big Boulder")
(referred) to as the "Corporations") and under the by-laws of the
Corporations, shares of the Corporations are combined in unit certificates,
each certificate representing the same number of shares of each of the
Corporations. Shares of each Corporation may be transferred only together
with an equal number of shares of the other Corporation. For this reason,
a combined Blue Ridge/Big Boulder Form 10-Q is being filed. Except as
otherwise indicated, all information applies to both Corporations.
Page 1
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INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
February 28, 1995 and May 31, 1995 1 & 2
Combined Condensed Statements of
Operations - Three Months and Nine
Months Ended February 28, 1995 & 1994 3
Combined Condensed Statements of
Cash Flows - Nine Months Ended
February 28, 1995 and 1994 4
Notes to Financial Statements 5
Item 2-Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6, 7 & 8
PART II - OTHER INFORMATION 9
Signatures 9
Page 2
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS February 28, May 31,
1995 1994
<S> <C> <C>
Current Assets
Cash (including interest bearing
deposits of $2,425,568 at February
28, 1995 and $2,838,058 at May
31, 1994) $ 2,438,068 $ 2,888,611
Current installments of mortgage
notes receivable 31,820 31,820
Accounts receivable 134,335 150,940
Refundable income taxes --- 40,000
Prepaid expenses, principally
insurance and real estate taxes 638,410 519,325
Deferred operating costs-net of
deferred revenue-ski facilities 15,920 ---
Total current assets 3,258,553 3,630,696
Mortgage notes receivable, less
current installments 2,064 23,587
Properties:
Land, principally unimproved 2,046,580 2,046,775
Land Improvements, Buildings
and equipment 44,465,737 43,168,047
46,512,317 45,214,822
Less accumulated depreciation
and amortization 25,362,846 23,636,325
21,149,471 21,578,497
$24,410,088 $25,232,780
<FN>
<F1> See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
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<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
February 28, May 31,
1995 1994
<S> <C> <C>
Current Liabilities:
Current installments of
long-term debt $ 698,875 $ 698,875
Accounts and other payables 790,863 269,489
Accrued claims 173,689 188,365
Deferred revenue & accrued
liabilities 538,000 706,975
Total current liabilities 2,201,427 1,863,704
Long-term debt, less
current installments 9,664,190 10,051,518
Deferred income taxes 2,701,728 2,701,728
Commitments and Contingencies
Combined shareholders' equity:
Capital Stock, without par
value, stated value $.30 per
combined share, Blue Ridge
and Big Boulder each have
authorized 3,000,000 shares
and each have issued 2,198,148
shares as of February 28, 1995
and as of May 31, 1994 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 8,977,980 9,141,008
11,099,172 11,262,200
LESS: Cost of 194,134 and
97,534 shares of capital
stock in Treasury at
February 28, 1995 and
May 31, 1994, respectively 1,256,429 646,370
9,842,743 10,615,830
$24,410,088 $25,232,780
<FN>
<F1> See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended Nine Months Ended
February 28, February 28,
1995 1994* 1995 1994*
<S> <C> <C> <C> <C>
Revenues:
Ski operations $6,783,088 $7,813,358 $6,783,088 $7,813,358
Real estate management 615,763 603,672 2,085,757 1,799,937
Rental income 407,731 379,113 1,183,752 1,135,642
Disposition of land 62,262 245 62,262 245
7,868,844 8,796,388 10,114,859 10,749,182
Costs and expenses:
Ski operations 6,451,780 6,772,874 6,451,780 6,772,874
Real estate management 580,529 568,188 2,003,479 1,796,312
Rental operations 197,650 214,609 598,644 621,513
Cost of properties disposed 3,687 --- 3,687 ---
General & administra-
tive expenses 242,166 268,642 708,409 747,630
7,475,812 7,824,313 9,765,999 9,938,329
Income from operations 393,032 972,075 348,860 810,853
Other income (expense):
Interest & other income 10,774 21,604 57,752 53,195
Interest expense (224,630) (216,686) (665,444) (651,112)
(213,856) (195,082) (607,692) (597,917)
Income(Loss) before
income taxes 179,176 776,993 (258,832) 212,936
Provision (Credit) for
income taxes 66,300 287,500 ( 95,800) 78,800
Income (Loss) before cumu-
lative effect of change
in accounting method 112,876 489,493 (163,032) 134,136
Cumulative effect (on prior
years to May 31, 1994)
of change in method of
accounting for income
taxes --- --- --- 8,355
Net Income (Loss) $112,876 $489,493 $(163,032) $ 142,491
Weighted average combined
shares outstanding 2,004,014 2,170,010 2,004,014 2,170,010
Per Share Data:
Income (loss) before cumu-
lative effect of change
in accounting method $ .06 $ .23 $( .08) $ .07
Cumulative effect of change
in method of accounting --- --- --- ---
Net Income (Loss) $ .06 $ .23 $( .08) $ .07
<FN>
<F2>*Reclassified for comparative purposes
</FN>
</TABLE>
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
1995 1994
<S> <C> <C>
Nine Months ended February 28,
Cash flows from Operating
Activities:
Net Income (Loss) $(163,032) $142,491
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 1,726,521 1,736,886
Deferred revenue 262,910 (62,770)
Changes in assets and liabilities:
Accounts & other receivables 16,605 11,846
Income tax refund 40,000 93,327
Prepaid expenses and other
current assets (135,005) (377,975)
Accounts payable 521,374 428,331
Accrued income taxes
other & liabilities (246,555) 538,552
Net cash provided by operating
activities 2,022,818 2,510,688
Cash Flows (used in) from
Investing Activities:
Collection of mortgage
receivables 21,523 46,653
Additions to properties (1,297,495) (1,363,494)
Net cash used in investing
activities (1,275,972) (1,316,841)
Cash flows (used in) from
Financing Activities:
Purchase of Treasury stock (610,061) (125,426)
Proceeds from notes payable, bank 875,000 ---
Payment of notes payable, bank (1,075,000) ---
Payment of long-term debt (387,328) (393,067)
Net cash used in financing activities (1,197,389) (518,493)
Net increase (decrease) in cash and
cash equivalents (450,543) 675,354
Cash and cash equivalents,
beginning of period 2,888,611 3,015,149
Cash and cash equivalents,
end of period $2,438,068 $3,690,503
Supplemental disclosures of cash
flow information:
Cash paid (received) during period:
Interest $ 664,546 $ 663,130
Income taxes $ (15,659) $ (93,327)
<FN>
<F1> See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
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NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. The combined financial statements include the accounts of Blue Ridge
Real Estate Company and its wholly-owned subsidiaries (Northeast Land
Company, Jack Frost Mountain Company and BRRE Holdings, Inc.) and Big
Boulder Corporation and its wholly-owned subsidiaries (Lake Mountain
Company and BBC Holdings, Inc.). In the opinion of Management, the
accompanying unaudited condensed combined financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary
to present fairly the financial position as of February 28, 1995, the
results of operations for the three month periods ended February 28, 1995
and 1994, and the results of operations and the statements of cash flows
for the nine month periods ended February 28, 1995 and 1994.
2. The results of operations for the three and nine months periods are
not necessarily indicative of the results to be expected for the full year
since the Companies' two ski facilities operate principally during the
months of December through March. Costs and expenses net of revenues
received in advance attributable to the ski facilities for the months
of June through November are deferred and recognized as revenue and
operating expenses, ratably, over the operating period.
3. Effective June 1, 1993, the Companies adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
The cumulative effect of the change in method of accounting as of the
beginning of the 1994 fiscal year has been reported in the combined
statement of operations.
The credit (provision) for income taxes for the nine months ended
February 28, 1995 and 1994, respectively, represents the allocation of
the estimated annual effective tax rate for the 12 months ending May 31,
1995 and 1994, respectively.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net income (loss) for the three months and nine months ended February 28,
1995, (Fiscal 1995) was $.06 and $(.08) per share. For the same periods
of the preceding year (Fiscal 1994), the net income was $.23 and $.07 per
share.
The revenues of $10,114,859 for the first nine months of Fiscal 1995
decreased by $634,323 when compared to the same period in Fiscal 1994.
The Companies experienced increases in real estate management of
$285,820, rental income of $48,110 and disposition of land of $62,017.
These increases were offset by a decrease in ski operations of $1,030,270.
The revenues of $7,868,844 for the third quarter of Fiscal 1995
decreased by $927,544 when compared to the same period in Fiscal 1994.
The Companies experienced increases in real estate management of $12,091,
rental income of 28,618 and disposition of land of $62,017. These
increases were offset by decreases in ski operations of $1,030,270.
The decrease in ski operation revenues for the three and nine months
ended February 28, 1995, is attributed to the decreased number of skier
visits because of warm temperatures.
Real estate management increases for the first nine months of Fiscal 1995
are attributed to increased revenue from recreational activities including
festivals and splatter of $289,471, fees for services provided to the
trusts of $34,230, and other by $5,332. These increases were offset by
decreases in leasing commission in resort communities of $1,980 and
marketing fees from resale of homes in our resort communities of $12,321
and leases of $28,912.
Real estate management increases for the third quarter of Fiscal 1995 are
attributed to increased revenue from recreational activities including
festivals and splatter of $30,033, marketing fees from resale of homes
in our resort communities of $9,634 and other by $5,405. These increases
were offset by decreases in rents and royalties of $19,097, leasing
commission in resort communities of $10,439 and service provided to the
trust of $3,445.
Rental income increases for the third quarter and first nine months of
Fiscal 1995 are attributed to increased revenue from investment
properties.
Disposition of land increases for the third quarter and first nine months
of Fiscal 1995 are due to land sales.
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Combined expenses for the first nine months of Fiscal 1995 decreased
by $172,330 when compared to the same period of Fiscal 1994. The
Companies experienced decreased cost in ski operations by $321,094,
rental operations of $22,869 and general and administrative expenses
of $39,221. These decreases were offset by increased expenses in real
estate management of $207,167 and cost of properties disposed of $3,687.
Combined expenses for the third quarter of Fiscal 1995 decreased by
$348,501 when compared to the same period of Fiscal 1994. The Companies
experienced decreased costs in ski operations of $321,094, rental
operations of $16,959 and general and administrative expenses of $26,476.
These decreases were offset by increased expenses in real estate manage-
ment of $12,341 and cost of properties disposed of $3,687.
Ski operations cost decreased for the third quarter and first nine months
of Fiscal 1995 due to a shorter ski season because of the warm weather.
Real estate management cost increased for the first nine months of Fiscal
1995 when compared to the same period in Fiscal 1994 because of increased
cost of recreational activities including splatter and festivals of
$143,872, services provided to the trust of $26,373, marketing fees from
resale of homes in our resort communities of $7,080 and rents and
royalties of $52,927. These increases were offset by decreases in cost
of leasing commission in resort communities of $1,980 and land parcel
development of $21,105.
Real estate management cost increased for the third quarter of Fiscal
1995 when compared to the same period in Fiscal 1994, because of increased
rents and royalties of $8,590, recreational activities including splatter
and festivals of $14,992, and leasing commission in resort communities of
$11,546. These increases were offset by decreases in services provided to
the trust of $5,104, marketing fees from resale of homes in our resort
communities of $1,194 and land parcel development of $16,489.
Rental operation costs and expenses decrease for the third quarter and
frst nine months of Fiscal 1995 are attributable to investment properties.
Cost of properties disposed increases for the third quarter and first
nine months of Fiscal 1995 are associated with the land sales.
Decreases in general and administrative expenses for the third quarter
and first nine months of Fiscal 1995 are attributed to reduced supplies
and services.
Interest and other income increases for the third quarter and first nine
months of Fiscal 1995 are attributed to an increase in average interest
rates on short term investments.
Increases in interest expense for the third quarter and first nine months
of Fiscal 1995 are due to increased interest cost on our variable rate
loans.
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Financial Condition, Liquidity and Capital Resources
Working capital as of February 28, 1995 decreased by $709,866 compared
to May 31, 1994. This was due principally to addition to properties,
purchase of Treasury stock and repayment of long-term debt.
The change in the balances of accounts receivable, deferred operating
costs and accrued liabilities from May 31, 1994 to February 28, 1995 was
due primarily to revenue and expenses that are applicable to the ski
facilities, which are deferred and recognized ratably during the months
of December through March.
The Companies utilized $1,075,000 of a $2,000,000 Line of Credit during
the third quarter of Fiscal 1995. The borrowings have been paid off and
the Line of Credit remains available through Fiscal 1995.
Moving Forward
Capital expenditures for Fiscal 1995 included expansion of snowmaking at
Jack Frost Mountain, purchase of grooming equipment and construction of
new facilities at Big Boulder for ski patrol and lift operations.
The Companies believe they have adequate capital resources to fund planned
capital activities for the foreseeable future.
Due to warm weather and the shorter ski season, fourth quarter revenues
will be greatly reduced. The Companies are anticipating a loss for the
current fiscal year.
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PART II - OTHER INFORMATION
The Companies have no matters to report with respect to Items 1, 2,
3, 4, 5, and 6(A) and (B).
FORM 10-Q
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:
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
(Registrant)
(Signature)
Gary A. Smith, President
(Signature)
R. Bruce Reiner, Chief
Accounting Officer
Date: April 12, 1995
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