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 August 31, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from .......... to..........
0-28-44 (Blue Ridge)
Commission File No. 0-28-43 (Big Boulder)
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION
State of 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 share outstanding of each of the issuer's classes of
common stock, as of the close of the period of this report:
Class Outstanding at August 31, 1996
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 trans-
ferred 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
PART I - FINANCIAL INFORMATION
Page No.
Item 1 - Financial Statements
Combined Condensed Balance Sheets
August 31, 1996 and May 31, 1996 1 & 2
Combined Condensed Statements of
Operations - Three months ended
August 31, 1996 and 1995 3
Combined Condensed Statements of
Cash Flows - Three months ended
August 31, 1996 and 1995 4
Notes to Financial Statements 5
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 6 & 7
PART II - OTHER INFORMATION 8
Signatures 8
PAGE 2
<PAGE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTIONS>
ASSETS
August 31, May 31,
1996 1996
<S> <C> <C>
Current Assets:
Cash (including interest bearing
deposits of $274,983 at August 31,
1996 and $1,770,546 at May 31, 1996 $506,957 $1,958,963
Marketable securities 293,588 293,588
Current installments of mortgage
notes receivable 12,399 10,670
Accounts receivable 134,690 334,397
Inventories 105,814 123,257
Prepaid expenses, principally
insurance and real estate taxes 808,450 766,921
Deferred operating costs-net of
deferred revenue-ski facilities 951,643 ---
Total current assets 2,813,541 3,487,796
Mortgage notes receivable, less
current installments --- 2,479
Other non-current assets 71,297 71,297
Properties:
Land, principally unimproved 1,867,766 1,867,766
Land improvements, buildings and
equipment 46,558,259 45,779,980
48,426,025 47,647,746
Less accumulated depreciation
and amortization 28,191,086 27,999,628
20,234,939 19,648,118
$23,119,777 $23,209,690
<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 BALANCE SHEETS
(UNAUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
August 31, May 31,
1996 1996
<S> <C> <C>
Current Liabilities:
Current installments of long-term debt $ 598,827 $ 504,681
Accounts and other payables 289,017 503,063
Accrued claims 188,337 204,147
Deferred revenue 133,770 293,095
Accrued income taxes 89,824 59,098
Accrued liabilities 654,528 684,835
Total current liabilities 1,954,303 2,248,919
Long-term debt, less current installments 9,322,196 9,189,486
Deferred income taxes 2,157,823 2,157,823
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
August 31, 1996 and as of May 31, 1996 659,444 659444
Capital in excess of stated value 1,461,748 1,461,748
Earnings retained in the business 8,820,496 8,748,503
10,941,688 10,869,695
LESS: cost of 194,134 shares of
Capital stock in Treasury 1,256,233 1,256,233
9,685,455 9,613,462
23,119,777 23,209,690
</TABLE>
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
Three months ended August 31, 1996 1995
Revenue:
Real estate management $1,694,070 $ 1,066,465
Rental operations 490,550 423,823
2,184,620 1,490,288
Costs and expenses:
Real estate management 1,418,911 891,403
Rental operations 228,714 193,829
General & administrative expense 232,611 236,431
1,880,236 1,321,663
Income from operations 304,384 168,625
Other income (expense):
Interest and other income 21,165 24,812
Interest expense (209,456) (221,831)
(188,291) (197,019)
Income(loss) before income taxes 116,093 (28,394)
Provision(credit) for income taxes 44,100 (10,800)
Net income(loss) $71,993 $(17,594)
Net income(loss) per weighted average
combined shares outstanding (2,004,014) in
1996 and 1995 $.04 $(.01)
</TABLE>
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF CASH FLOW(UNAUDITED)
<CAPTION>
<S> <C> <C>
Three months ended August 31, 1996 1995
Cash flows from operating activities:
Net income(loss) $ 71,993 $( 17,594)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation and amortization 191,458 210,091
Deferred revenue (159,325) (123,136)
Changes in assets and liabilities:
Accounts and other receivables 199,707 103,604
Prepaid expenses and other current
assets (975,729) (413,448)
Accounts payable (214,046) (95,165)
Accrued liabilities (15,391) (244,672)
Net cash used in operating activities (901,333) (580,320)
Cash flows from investing activities:
Collection of mortgage receivables 750 3,986
Additions to properties (778,279) (213,804)
Net cash used in investing activities (777,529) (209,818)
Cash flows from financing activities:
Proceeds from notes payable 363,946 ---
Payment of long-term debt (137,090) (124,097)
Net cash provided (used)
in financing activities 226,856 (124,097)
Net decrease in cash and cash
equivalents (1,452,006) (914,235)
Cash and cash equivalents,
beginning of period 1,958,963 2,085,287
Cash and cash equivalents,
end of period $ 506,957 $1,171,052
Supplemental disclosures of cash
flow information:
Cash paid during the period:
Interest $ 209,456 $ 219,713
Income taxes 84,000 ---
<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 August 31, 1996 and the
results of operations and cash flows for the three month periods
ending August 31, 1996 and 1995.
2. The results of operations for the three months are not necessarily
indicative of the results to be expected for the full year since
(a) the Companies' two ski facilities operate principally during
the months of December through March and (b) land dispositions occur
sporadically and do not follow any pattern during the fiscal year.
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. The provision (credit) for income taxes for the three months ending
August 31, 1996 and 1995 represents the allocation of the estimated
annual effective tax rate for the 12 months ending May 31, 1996 and
1995, respectively.
4. In July, 1996, the Companies secured a new loan in the amount of
$650,000 with an interest rate of 7%. This loan is for additional
capital improvements at Jack Frost ski area. This loan will mature in
July, 2001.
PAGE 7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the First Quarter of Fiscal 1997 results in a profit
of $.04 per combined share compared to a loss of $(.01) per combined share
for the same period in Fiscal 1996.
Combined revenue of $2,184,620 represents an increase of $694,332 for
three months ending August 31, 1996, compared to the same period of
the previous year. Real Estate Management increased $627,605 and
Rental Income increased $66,727.
Real Estate Management increase in revenue is from recreational
activities of $584,944, rental management operations of $62,393,
and property management of homes in our resort communities of $4,511.
The increases were offset with a decrease in marketing fees from
resale of homes in our resort communities.
Rental income increase in revenue is from investment properties.
Interest and Other Income decreased $3,647.
Operating costs increased by $558,573 during the first three months
of Fiscal 1997 as compared to the same period in 1996. This was
due to increased expense in our recreational activities, rental
operations and investment properties. The increases were offset
with decreases in our property management, resale of homes.
General and administrative expenses for the first three months of
Fiscal 1997 as compared to the same period in 1996, decreased by
$3,820, primarily because of supplies.
Interest expense for the first three months of Fiscal 1997, as
compared to the same period in 1996, decreased by $12,374 because
of retirement of two loans in fiscal 1996.
The effective income tax rate for the First Quarter of Fiscal 1997
was 38%, as compared to 38% for Fiscal Year 1996. State taxes
account primarily for the Fiscal 1997 and 1996 effective rates
being greater than the federal statutory rate of 34%.
PAGE 8
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Financial Condition, Liquidity and Capital Resources
Working capital as of August 31, 1996, decreased by $379,639 as
compared to May 31, 1996. This was due principally to an increase
in deferred ski area operating costs, decrease in deferred revenue,
an addition to properties.
The change in the balances of accounts receivable, deferred operating
costs and accrued liabilities from May 31, 1996 to August 31, 1996, 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.
Moving Forward
Capital expenditures planned for Fiscal 1997 include expansion of our
Tubing Hill at Big Boulder and expansion of our snowmaking capacity
at Jack Frost. The Companies plan to finance the air expansion through
a bank and fund the tubing facilities expansion with internal funds.
Change in Fiscal Accounting Period
At the July 24, 1996, Board of Directors meetings, a change in the
fiscal year end was approved from May 31 to March 31. This change
will be effective for each of the Companies' 1997 Fiscal Year. The
purpose is to have the fiscal reporting period coincide with the
operating periods of the profit centers initiated over the last
several years.
PAGE 9
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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)
Cynthia A. Barron
Chief Accounting Officer
November 11, 1996
(Date)
PAGE 10
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> AUG-31-1996
<CASH> 506,957
<SECURITIES> 293,588
<RECEIVABLES> 147,089
<ALLOWANCES> 0
<INVENTORY> 105,814
<CURRENT-ASSETS> 2,813,541
<PP&E> 46,825,812
<DEPRECIATION> 28,191,086
<TOTAL-ASSETS> 23,119,777
<CURRENT-LIABILITIES> 1,954,303
<BONDS> 0
<COMMON> 2,004,014
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 23,119,777
<SALES> 2,184,620
<TOTAL-REVENUES> 2,184,620
<CGS> 0
<TOTAL-COSTS> 1,880,236
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (209,456)
<INCOME-PRETAX> 116,093
<INCOME-TAX> 44,100
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,993
<EPS-PRIMARY> .04
<EPS-DILUTED> 0
</TABLE>
