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 29, 1996
( ) 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 29, 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 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
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
February 29, 1996 and May 31, 1995 1 & 2
Combined Condensed Statements of
Operations - Three Months and Nine
Months Ended February 29, 1996
and February 28, 1995 3
Combined Condensed Statements of
Cash Flows - Nine Months Ended
February 29, 1996 and February 28,
1995 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
<PAGE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS February 29, May 31,
1996 1995
<S> <C> <C>
Current Assets
Cash (including interest bearing
deposits of $3,277,746 at February
29, 1996 and $2,058,412 at May
31, 1995) $ 3,528,091 $ 2,085,287
Current installments of mortgage
notes receivable 13,156 13,156
Accounts receivable 135,290 199,580
Refundable income taxes 10,000 10,000
Inventories 68,921 0
Prepaid expenses, principally
insurance and real estate taxes 666,559 571,651
Deferred operating costs-net of
deferred revenue-ski facilities 24,122 0
Total current assets 4,446,139 2,879,674
Mortgage notes receivable, less
current installments 3,223 13,668
Other non-current assets 0 36,797
3,223 50,465
Properties:
Land, principally unimproved 2,046,582 2,046,582
Land Improvements, buildings
and equipment 45,472,835 44,565,426
47,519,417 46,612,008
Less accumulated depreciation
and amortization 27,512,571 25,878,476
20,006,846 20,733,532
$24,456,208 $23,663,671
<FN>
<F1>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
PAGE 3
<PAGE>
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
February 29, May 31,
1996 1995
<S> <C> <C>
Current Liabilities:
Current installments of
long-term debt $ 661,141 $ 661,141
Accounts and other payables 919,178 319,721
Accrued claims 62,204 154,605
Deferred revenue 479,068 412,224
Accrued liabilities 853,812 542,627
Total current liabilities 2,975,403 2,090,318
Long-term debt, less
current installments 9,240,542 9,578,025
Deferred income taxes 2,425,129 2,425,129
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 29, 1996
and as of May 31, 1995 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 8,950,175 8,705,240
11,071,367 10,826,432
LESS: Cost of 194,134 Shares of
Capital Stock in Treasury 1,256,233 1,256,233
9,815,134 9,570,199
$24,456,208 $23,663,671
<FN>
<F1>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
PAGE 4
<PAGE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
Feb.29 Feb.28 Feb.29 Feb.28
1996 1995 1996 1995
Revenues:
Ski operations $8,980,548 $6,783,088 $8,980,548 $6,783,088
Real estate management 706,441 615,763 2,394,511 2,085,757
Rental income 404,544 407,731 1,182,106 1,183,752
Disposition of land 0 62,262 0 62,262
10,091,533 7,868,844 12,557,165 10,114,859
Costs and expenses:
Ski operations 7,995,617 6,451,780 7,984,667 6,451,780
Real estate management 666,285 580,529 2,248,757 2,003,479
Rental income 215,594 197,650 599,026 598,644
Cost of properties 0 3,687 0 3,687
General & administra-
tive expenses 258,731 242,166 730,542 708,409
9,136,227 7,475,812 11,562,992 9,765,999
Income from operations 955,306 393,032 994,173 348,860
Other income (expense):
Interest & other income 11,901 10,774 57,101 57,752
Interest expense (220,098) (224,630) (656,219) (665,444)
(208,197) (213,856) (599,118) (607,692)
Income (loss) before
income taxes 747,109 179,176 395,055 (258,832)
Provision (credit) for
income taxes 283,901 66,300 150,120 (95,800)
Net Income (Loss) 463,208 112,876 244,935 (163,032)
Net Income(Loss) per
weighted average
combined shares
outstanding-2,004,114 $0.23 $0.06 $0.12 $(0.08)
</TABLE>
PAGE 5
<PAGE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
Nine Months ended February 29 & 28 1996 1995
Cash flows from Operating
Activities:
Net Income (Loss) $ 244,935 $ (163,032)
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation & amortization 1,634,095 1,726,521
Deferred revenue 253,351 262,910
Changes in assets & liabilities:
Accounts & other receivables 64,290 16,605
Income tax refund 0 40,000
Prepaid expenses & other
current assets (151,154) (135,005)
Accounts payable 599,457 521,374
Accrued income taxes
& other liabilities 32,277 (246,555)
Net cash provided by operating
activities 2,677,251 2,022,818
Cash Flows (used in) from
Investing Activities:
Collection of mortgage
receivables 10,445 21,523
Additions to properties (907,409) (1,297,495)
Net cash used in investing
activities (896,964) (1,275,972)
Cash flows (used in) from
Financing Activities:
Purchase of Treasury stock 0 (610,061)
Proceeds from notes payable, bank 900,000 875,000
Payment of notes payable, bank (900,000) (1,075,000)
Payment of long-term debt (337,483) (387,328)
Net cash used in financing activities (337,483) (1,197,389)
Net increase (decrease) in cash &
cash equivalents 1,442,804 (450,543)
Cash & cash equivalents,
beginning of period 2,085,287 2,888,611
Cash & cash equivalents,
end of period $3,528,091 $2,438,068
Supplemental disclosures of cash
flow information:
Cash paid (received) during period:
Interest $ 656,219 $ 664,546
Income taxes $ 16,232 $ (15,659)
<FN>
<F1>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
PAGE 6
<PAGE>
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 29, 1996, the
results of operations for the three month periods ended February 29, 1996
and February 28, 1995, and the results of operations and the statements
of cash flows for the nine month periods ended February 29, 1996 and
February 28, 1995.
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. The provision (credit) for income taxes for the nine months ended
February 29, 1996 and February 28, 1995, respectively, represents the
alocation of the estimated annual effective tax rate for the 12 months
ending May 31, 1996 and 1995, respectively.
PAGE 7
<PAGE>
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 29,
1996, (Fiscal 1996) was $.23 and $.12 per share. For the same periods
of the preceding year (Fiscal 1995), the net income was $.06 and $.(08)
per share.
The revenues of $12,577,165 for the first nine months of Fiscal 1996
increased by $2,442,306 when compared to the same period in Fiscal 1995.
The Companies experienced increases in ski operations of $2,197,460 and
real estate management of $308,754. These increases were offset by
decreases in rental income of $1,646 and disposition of land of $62,262.
The revenues of $10,091,533 for the third quarter of Fiscal 1996
increased by $2,222,689 when compared to the same period in Fiscal 1995.
The Companies experienced increases in ski operations of $2,197,460 and
real estate management of $90,678. These increases were offset by
decreases in rental income of $3,187 and disposition of land of $62,262.
The increase in ski operation revenues for the three and nine months
ended February 29, 1996, is attributed to the increased number of skier
visits and additional profit centers.
Real estate management increases for the first nine months of Fiscal 1996
are attributed to increased revenue from recreational activities includ-
ing festivals and Splatter of $139,852, fees for services provided to the
trusts of $7,711, leases of $49,151, and commissions in resort communi-
ties of $126,780. These increases were offset by a decrease in marketing
fees from resale of homes of $14,740.
Real estate management increases for the third quarter of Fiscal 1996
are attributed to increased revenue from commissions in resort communi-
ties of $84,603, leases of $40,646, and service provided to the trust
of $5,087. These increases were offset by decreases in marketing fees
from resale of homes of $32,264 and recreation activities of $7,394.
Rental income decreases for the third quarter and first nine months of
Fiscal 1996 are attributed to decreased revenue from investment
properties.
Disposition of land decreases for the third quarter and first nine months
of Fiscal 1996 are due to no land sales.
Combined expenses for the first nine months of Fiscal 1996 increased
by $1,796,993 when compared to the same period of Fiscal 1995. The
Companies experienced increased costs in ski operations by $1,532,887,
rental operations of $382, general and administrative expenses of
$22,133, and real estate management of $245,278. These increases were
offset by decrease of cost of properties disposed of $3,687.
Combined expenses for the third quarter of Fiscal 1996 increased by
$1,660,415 when compared to the same period of Fiscal 1995. The
Companies experienced increased costs in ski operations of $1,543,837,
rental operations of $17,944, general and administrative expenses of
$16,565, and real estate management of $85,756. These increases were
offset by a decrease in cost of properties disposed of $3,687.
Ski operations costs increased for the third quarter and first nine months
of Fiscal 1996 due to a longer ski season and additional profit centers.
Real estate management cost increase for the first nine months of
Fiscal 1996 when compared to the same period in Fiscal 1995 because
of increased cost of recreational activities including Splatter and
festivals of $185,823, services provided to the trust of $20,807,
marketing fees from resale of homes in our resort communities of $324
rents and royalties of $41,344 and leasing commission in resort
communities of $55,751. These increases were offset by a decrease
in land parcel development of $58,771.
Real estate management cost increases for the third quarter of Fiscal
1996 when compared to the same period in Fiscal 1995 are attributed
to increased cost of rents and royalties of $19,925, recreational
activities including Splatter and festivals of $27,351, leasing
commission in resort communities of $55,751. These increases were
offset by decreases in services provided to the trust of $6,888,
marketing fees from resale of homes in our resort communities of
$2,351 and land parcel development of $8,032.
Rental operation costs and expenses increase for the third quarter and
first nine months of Fiscal 1996 are attributable to investment
properties.
Cost of properties disposed decreases for the third quarter and first
nine months of Fiscal 1996 are associated with no land sales.
Increases in general and administrative expenses for the third quarter
and first nine months of Fiscal 1996 are attributed to supplies
and services increases.
Interest and other income increases for the third quarter and decrease
for the first nine months of Fiscal 1996 are attributed to average
interest rates on short-term investments.
Decreases in interest expense for the third quarter and first nine months
of Fiscal 1996 are due to our variable rate loans.
The effective income tax rate for the first nine months of Fiscal 1996
of 38%, as compared to 37% for Fiscal 1995. State taxes account
primarily for the Fiscal 1996 and 1995 effective rate being greater
than the federal statutory rate of 34%
PAGE 8
<PAGE>
Financial Condition, Liquidity and Capital Resources
Working capital as of February 29, 1996 increased by $681,380 compared
to May 31, 1995. This was due principally to increase of cash.
The change in the balances of accounts receivable, deferred operating
costs and accrued liabilities from May 31, 1995 to February 29, 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 for Fiscal 1996 included expansion of the Tubing
Hill at Jack Frost Mountain and the construction of a complete Tubing
facility at Big Boulder Ski Area.
Future capital improvements include the installation of an additional
10,000 C.F.M. of air at Jack Frost Mountain to enhance our snowmaking
ability and the addition of 40 sites at our Fern Ridge Campground.
The Companies have adequate capital resources to fund these projects.
We are expanding our Summer activities with the 1st Annual Pocono
American Roots Music Festival on June 22nd and 23rd at Big Boulder Ski
Area.
PAGE 9
<PAGE>
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)
Russell S. Mollath, Chief
Accounting Officer
Date: April 12, 1996
PAGE 10
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> FEB-29-1996
<CASH> 3,528,091
<SECURITIES> 0
<RECEIVABLES> 158,446
<ALLOWANCES> 0
<INVENTORY> 68,921
<CURRENT-ASSETS> 4,446,139
<PP&E> 47,519,417
<DEPRECIATION> 27,512,571
<TOTAL-ASSETS> 24,456,208
<CURRENT-LIABILITIES> 2,975,403
<BONDS> 0
<COMMON> 2,004,014
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 24,456,208
<SALES> 12,557,165
<TOTAL-REVENUES> 12,614,266
<CGS> 0
<TOTAL-COSTS> 11,562,992
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (656,219)
<INCOME-PRETAX> 395,055
<INCOME-TAX> 150,120
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET INCOME> 244,935
<EPS-PRIMARY> .12
<EPS-DILUTED> 0
</TABLE>
