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 November 30, 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 November 30, 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 certifi-
cate 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
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
November 30, 1996 and May 31, 1996 1 & 2
Combined Condensed Statements of
Operations - Three Months and Six
Months Ended November 30, 1996 & 1995 3
Combined Condensed Statements of
Cash Flows - Six Months Ended
November 30, 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 7
Signatures 8
PAGE 2
<PAGE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
ASSETS November 30, May 31,
1996 1996
<S> <C> <C>
Current Assets
Cash (including interest bearing
deposits of $171,500 at November
30, 1996 and $2,064,134 at May
31, 1996) $ 220,015 $2,252,551
Current installments of mortgage
notes receivable --- 10,670
Accounts receivable 107,888 334,397
Inventories 262,251 123,257
Prepaid expenses, principally
insurance and real estate taxes 904,312 766,921
Deferred operating costs-net of
deferred revenue-ski facilities 2,115,817 ---
Total current assets 3,610,283 3,487,796
Mortgage notes receivable, less
current installments --- 2,479
Other current assets 71,297 71,297
Properties:
Land, principally unimproved 1,867,766 1,867,766
Land Improvements, Buildings
and equipment 47,645,539 45,779,980
49,513,305 47,647,746
Less accumulated depreciation
and amortization 28,366,122 27,999,628
21,147,183 19,648,118
$24,828,763 $23,209,690
<FN>
<F1>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
PAGE 3
<PAGE>
<TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
November 30, May 31,
1996 1996
<S> <C> <C>
Current Liabilities:
Notes payable, Line of Credit $ 1,500,000 $ ---
Current installments of
long-term debt 5,605,832 504,681
Accounts and other payables 643,143 503,063
Accrued claims 174,070 204,147
Deferred revenue 114,362 293,095
Accrued liabilities 720,771 743,933
Total current liabilities 8,758,178 2,248,919
Long-term debt, less
current installments 4,373,877 9,189,486
Deferred income taxes 2,180,282 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 November 30, 1996
and as of May 31, 1996 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 8,651,467 8,748,503
10,772,659 10,869,695
LESS: Cost of 194,134
shares of capital
stock in Treasury
1,256,233 1,256,233
9,516,426 9,613,462
$24,828,763 $23,209,690
<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>
Three Months Ended Six Months Ended
November 30 November 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Ski operations $ 73,411 $ 0 $ 73,411 $ 0
Real estate management 712,415 634,856 2,406,485 1,701,320
Rental income 329,230 340,489 819,780 764,312
1,115,056 975,345 3,299,676 2,465,632
Costs and expenses:
Ski operations 73,411 0 73,411 0
Real estate management 677,828 676,362 2,096,739 1,564,000
Rental operations 206,086 193,359 434,800 390,953
General & administra-
tive expenses 220,129 235,380 452,740 471,811
1,177,454 1,105,101 3,057,690 2,426,764
Income (Loss) from
operations (62,398) (129,756) 241,986 38,868
Other income (expense:)
Interest & other income 15,815 20,388 36,980 45,200
Interest expense (226,019) (214,290) (435,475) (436,121)
(210,204) (193,902) (398,495) (390,921)
Loss before income taxes (272,602) (323,659) (156,509) (352,053)
Credit for income taxes 103,589 122,990 59,473 133,780
Net Loss $(169,013) $(200,669) $(97,036) $(218,273)
Net loss per shares
outstanding (2,004,014)
in 1996 and in 1995
$(.08) $(.10) $(.05) $(.11)
</TABLE>
PAGE 5
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<TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
<S> <C> <C>
Six Months ended November 30, 1996 1995
Cash flows from Operating
Activities
Net Loss $(97,036) $(218,273)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Depreciation and amortization 366,494 403,991
Deferred revenue (178,733) (304,059)
Changes in assets and liabilities:
Accounts & other receivables 226,509 144,880
Prepaid expenses and other
current assets (2,392,202) (1,569,096)
Accounts Payable 140,080 277,709
Accrued liabilities (30,780) (294,021)
Net cash used in operating activities (1,965,668) (1,558,869)
Cash Flows from Investing Activities:
Collection of mortgage
receivables 13,149 7,216
Additions to properties (1,865,559) (575,732)
Net cash used in investing
activities (1,852,410) (568,516)
Cash flows from financing activities:
Proceeds from bank note 2,060,401 600,000
Payment of long-term debt (274,859) (256,661)
Net cash provided by (used
in)financing activities 1,785,542 343,339
Net decrease in cash and
cash equivalents (2,032,536) (1,784,046)
Cash and cash equivalents
beginning of period 2,252,551 2,085,287
Cash and cash equivalents
end of period $ 220,015 $ 301,241
Supplemental disclosures of cash
flow information:
Cash paid (refunded) during
period:
Interest $ 435,475 $ 444,197
Income taxes $ --- $ ---
<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 November 30, 1996, and the
results of operations and the statements of cash flows for the six month
periods ended November 30, 1996 and 1995.
2. The results of operations for the three and six months are not
necessarily indicative of the results to be expected or 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 six months ended
November 30,1996 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.
In September, 1997, the loan on the Dreshertown Plaza will
mature, therefore, $5,392,955 was reclassified as current debt.
Management intends to refinance the Dreshertown Plaza loan.
PAGE 7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the Second Quarter and First Half of Fiscal 1997 resulted
in a loss of ($.08) and ($.05) per combined share compared to a loss of
($.10) and ($.11) per combined share for the same periods in Fiscal 1996.
Combined revenue of $3,299,676 represents an increase of $834,044 for six
months ending November 30, 1996, compared to the same period of the
previous year. Real Estate Management increased $705,165 and Rental
Income increased $55,468.
Real Estate Management increase in revenue is from recreational activities
of $543,902, rental management operations of $154,104 and property management
of homes in our resort communities of $7,159. The increases were offset with
a decrease in marketing fees from resale of homes in our resort communities.
Rental income decrease in revenue is from investment properties.
Interest and Other Income decreased $8,220.
Operating costs increases by $630,926 during the first six 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 six months of Fiscal
1997 as compared to the same period in 1996, decreased by $19,071,
primarily because of supplies, income taxes and depreciation.
Interest expense for the first six months of Fiscal 1997, as compared
to the same period in 1996, decreased by $646 because of
retirement of two loans in fiscal 1996.
The effective income tax rate for the First Half 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
<PAGE>
Financial Condition, Liquidity and Capital Resources
Working capital as of November 30, 1996, (exclusive of the $5,392,955
debt reclassified to current), decreased by $993,817 as compared
to May 31, 1996. This was due principally to an increase in deferred ski
area operating costs, decrease in deferred revenue, and addition to
properties.
The change in the balances of accounts receivable, deferred operating
costs and accrued liabilities from May 31, 1996 to November 30, 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 1997 included expansion of our
Tubing Hill at Big Boulder and expansion of our snowmaking capacity
at Jack Frost. The Companies financed the air expansion with a bank
note and the tubing facilities 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
<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)
Cynthia A. Barron
Chief Accounting Officer
Date: January 14, 1997
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> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 220,015
<SECURITIES> 0
<RECEIVABLES> 107,888
<ALLOWANCES> 0
<INVENTORY> 262,251
<CURRENT-ASSETS> 3,610,283
<PP&E> 47,645,539
<DEPRECIATION> 28,366,122
<TOTAL-ASSETS> 24,828,763
<CURRENT-LIABILITIES> 8,758,178
<BONDS> 0
0
0
<COMMON> 2,004,014
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 24,828,763
<SALES> 3,299,676
<TOTAL-REVENUES> 3,299,676
<CGS> 0
<TOTAL-COSTS> 3,057,690
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (435,475)
<INCOME-PRETAX> (156,509)
<INCOME-TAX> 59,473
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,036)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> 0
</TABLE>
