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 June 30, 1997
( ) 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 June 30, 1997
Common Stock, without par value, 1,992,014
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.
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
June 30, 1997 and March 31, 1997 1 & 2
Combined Condensed Statements of
Operations - Three Months ende
June 30, 1997 and May 31, 1996 3
Combined Condensed Statements of
Cash Flows - Three Months Ended
June 30, 1997 and May 31, 1996 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
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
(UNAUDITED)
[CAPTION]
<TABLE>
ASSETS June 30, March 31,
1997 1997
<S> <C> <C>
Current Assets
Cash (including interest bearing
deposits of $854,277 at June 30, 1997
and $2,084,101 at March 31, 1997 $ 860,192 $2,387,197
Accounts receivable 189,519 430,628
Refundable income taxes 7,323 23,146
Inventories 284,066 249,590
Prepaid expenses, principally
insurance and real estate taxes 255,705 623,561
Deferred operating costs-net of
deferred revenue-ski facilities 1,168,468 0
Total current assets 2,765,273 3,714,122
Other non-current assets 36,797 36,797
Properties:
Land, principally unimproved 1,867,766 1,867,766
Land improvements, buildings
and equipment 47,357,982 47,146,625
49,225,748 49,014,391
Less accumulated depreciation
and amortization 29,155,428 28,962,573
20,070,320 20,051,818
$22,872,390 $23,802,737
<FN>
<F1>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
June 30, March 31,
1997 1997
<S> <C> <C>
Current Liabilities:
Current installments of
long-term debt $ 532,513 $ 532,513
Accounts and other payables 577,742 430,814
Accrued claims 134,851 158,905
Deferred revenue 100,836 192,556
Accrued income taxes 23,596 138,566
Accrued liabilities 366,964 801,849
Total current liabilities 1,739,502 2,255,203
Long-term debt, less
current installments 9,134,633 9,245,918
Deferred income taxes 2,113,605 2,201,348
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 June
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 9,103,694 9,235,309
11,224,886 11,356,501
LESS: Cost of 206,134 & 194,134
shares of capital stock in treasury as
of June 30, 1997 and March 31, 1997,
respectively. 1,337,236 1,256,233
9,887,650 10,100,268
$22,872,390 $23,802,737
<FN>
<F2>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS FOR
THREE MONTHS ENDED JUNE 30, 1997 AND MAY 31, 1996
(UNAUDITED)
[CAPTION]
<TABLE>
<S> <C> <C>
Revenues:
Ski operations $ 0 $1,638,413
Real estate management 1,012,439 533,702
Rental income 489 793 579,706
1,502,232 2,751,821
Costs and expenses:
Ski operations 0 1,757,012
Real estate management 992,644 813,680
Rental operations 241,794 228,203
General & administrative expenses 269,937 210,459
1,504,375 3,009,354
Loss from operations (2,143) (257,533)
Other income (expense:)
Interest & other income 19,878 30,959
Interest expense (237,093) (210,043)
(217,215) (179,084)
Loss before income taxes (219,358) (436,617)
Benefit for income taxes (87,743) (234,945)
Net loss $(131,615) $(201,672)
Net loss per shares outstanding $(0.07) $(0.10)
</TABLE>
<TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS FOR
THREE MONTHS ENDED JUNE 30, 1997 AND MAY 31, 1996
(UNAUDITED)
<CAPTION>
<S> <C> <C> <C>
1997 1996
Cash Flows from Operating Activities:
Net loss $(131,615) $(201,672)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 192,855 498,486
Deferred income taxes (87,743) (143,556)
Write-off of project development costs 0 178,818
Deferred revenue (91,720) (372,480)
Changes in assets and liabilities:
Accounts & other receivables 241,109 (196,621)
Refundable income taxes 15,823 10,000
Prepaid expenses and other current assets (835,088) (167,373)
Accounts payable & accrued liabilities (312,011) (380,394)
Accrued income taxes (114,970) 59,098
Net cash used in operating activities $1,123,360) $(715,694)
Cash Flows (used in) from Investing Activities:
Marketable securities 0 (293,588)
Collection of mortgage receivables 0 744
Other non-current assets 0 (34,500)
Additions to properties (211,357) (318,574)
Net cash used in investing activities: $(211,357) $(645,918)
Cash flows (used in) from Financing Activities:
Purchase of treasury stock (81,003) 0
Payment of long-term debt (111,285) (207,516)
Net cash used in financing activities $(192,288) $(207,516)
Net (decrease) in cash and
cash equivalents $(1,527,005) $(1,569,128)
Cash and cash equivalents beginning
of period $2,387,197 $3,528,091
Cash and cash equivalents end of period $ 860,192 $1,958,963
Supplemental disclosures of cash
flow information:
Cash paid during period:
Interest $51,073 $ 219,243
Income taxes, net $ 99,177 $0
<FN>
<F3>See accompanying notes to unaudited financial statements.
</FN>
</TABLE>
NOTES TO UNAUDITED FINANCIAL STATEMENTS
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 combined condensed financial statements contain
all adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1997, and the results
of operations and the statements of cash flows for the periods ended June
30, 1997 and May 31, 1996. Due to the change in the fiscal year end the
most comparable quarterly prior year information is the three month period
ended May 31, 1996. The re-statement of prior year quarters was not
cost justifiable.
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 April through November are deferred and recognized as revenue and
operating expenses, ratably, over the operating period.
The provision for income taxes for the three months ended June 30,
1997 and May 31, 1996 represents the estimated annual
effective tax rate for the year ending March 31, 1998 and the year ended
May 31, 1996, respectively.
In September 1997, the loan on the Dreshertown Plaza will mature.
Management has initiated refinancing of the loan, therefore $79,000 is
classified as current debt and the balance of $5,253,343 is included in
long-term debt.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the three months ended June 30, 1997 (Fiscal 1998) resulted
in a net loss of $(.07) per combined share compared to a net loss of $(.10)
per combined share for the three months ended May 31, 1996.
Combined revenue of $1,502,232 represents a decrease of $1,249,589 for
three months ended May 31, 1996. Ski operations decreased $1,638,413,
Real Estate Management increased $478,737 and Rental Income decreased
$89,913.
The decrease in Ski operation revenues for the three months ended June 30,
1997 as compared to May 31, 1996 is attributed to the change in fiscal year
end which results in non-conforming quarterly comparisons. The three months
ended June 30, 1997, does not reflect any ski operation income whereas
the three months ended May 31, 1996 does.
Ski operation income is generated December through March annually.
Real Estate Management increase in revenue is attributed to festival
revenues, recreational activities, rental management operations and property
management of homes in our resort communities.
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 $11,081.
Operating costs decreased by $1,562,181 during the first three months of
Fiscal 1998 as compared to the three months ended May 31, 1996. This was
due to the non-conforming quarterly comparison. The three months ended
June 30, 1997, does not reflect any ski operation expenses whereas the
three months ended May 31, 1996 does. Ski operations encompasses December
through March annually.
General and Administrative expenses for the first three months of Fiscal
1998 as compared to the three months ended May 31, 1996, increased by
$59,478 primarily because of supplies and services. Several items are non-
recurring services related to research and development.
Interest expense for the first three months of Fiscal 1998, as compared to
the three months ended May 31, 1996, increased by $27,050 because of the
acquisition of an additional loan for snow making equipment.
The effective income tax rate for the first three months of Fiscal 1998 was
34% as compared to 38% for the three months ended May 31, 1996. State
taxes account primarily for the Fiscal 1998 and 1997 effective rates being
greater than the federal statutory rate of 34%.
Financial Condition, Liquidity and Capital Resources
Working capital as of June 30, 1997, decreased by $433,148 as compared to
March 31, 1997. This was due principally to a decrease in accounts
receivable and prepaid expenses.
The change in the balances of accounts receivable, deferred operating costs
and accrued liabilities from March 31, 1997 to June 30, 1997 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 the First Quarter of Fiscal 1998 were for various
equipment purchases. The Companies, in Fiscal 1998, will expand camping
sites at Fernridge Campground and continue snow tubing and snow making
expansion at Big Boulder and Jack Frost.
Change in Fiscal Accounting Period
At the July 24, 1996, Board of Directors' meeting, a change in the Fiscal
year end was approved from May 31 to March 31. This change was
effective for the Companies' 1997 Fiscal year. The purpose is to
have the fiscal reporting period coincide with the operating periods
of the Companies.
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: August 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 860,192
<SECURITIES> 0
<RECEIVABLES> 189,519
<ALLOWANCES> 0
<INVENTORY> 284,066
<CURRENT-ASSETS> 2,765,273
<PP&E> 47,357,982
<DEPRECIATION> 29,155,428
<TOTAL-ASSETS> 22,872,390
<CURRENT-LIABILITIES> 1,739,502
<BONDS> 0
0
0
<COMMON> 1,992,014
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 22,872,390
<SALES> 1,502,232
<TOTAL-REVENUES> 1,502,232
<CGS> 0
<TOTAL-COSTS> 1,504,375
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (237,093)
<INCOME-PRETAX> (219,358)
<INCOME-TAX> (87,743)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (131,615)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> 0
</TABLE>
