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, 1998
( ) 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, 1998
Common Stock, without par value, 1,991,892
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
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
June 30, 1998 and March 31, 1998 1 & 2
Combined Condensed Statements of
Operations - Three Months ended
June 30, 1998 & 1997 3
Combined Condensed Statements of
Cash Flows - Three Months Ended
June 30, 1998 & 1997 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,
1998 1998
<S> <C> <C>
Current Assets
Cash and cash equivalents
(all funds are interest bearing) $1,022,588 $2,799,777
Accounts receivable 156,814 230,482
Refundable Income Taxes 8,614 8,614
Inventories 257,759 221,210
Prepaid expenses, principally
insurance and real estate taxes 530,347 485,513
Deferred operating costs-net of
deferred revenue-ski facilities 1,757,683 0
Total current assets 3,733,805 3,745,596
Other non-current assets 36,797 36,797
Properties:
Land, principally unimproved 1,867,738 1,867,738
Land Improvements, Buildings
and equipment 49,082,754 48,907,191
50,950,492 50,774,929
Less accumulated depreciation
and amortization 31,466,661 30,977,716
19,483,831 19,797,213
$23,254,433 $23,579,606
See accompanying notes to unaudited financial statements.
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
June 30, March 31,
1998 1998
<S> <C> <C>
Current Liabilities:
Current installments of
long-term debt $ 458,489 $ 457,503
Accounts and other payables 527,302 436,941
Accrued claims 83,695 78,423
Deferred revenue 483,694 236,598
Accrued income taxes 53,735 267,885
Accrued liabilities 442,662 559,575
Total current liabilities 2,049,577 2,036,925
Long-term debt, less
current installments 8,750,906 8,833,406
Deferred income taxes 2,193,776 2,295,417
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, 1998 and as of March 31, 1998 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 9,477,438 9,629,902
11,598,630 11,751,094
LESS: Cost of 206,256 & 206,134
shares of capital stock in treasury as
of June 30, 1998 & March 31, 1998
respectively. 1,338,456 1,337,236
10,260,174 10,413,858
$23,254,433 $23,579,606
See accompanying notes to unaudited financial statements.
</TABLE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998 & JUNE 30, 1997
(UNAUDITED)
<TABLE>
June 30, June 30,
1998 1997
<S> <C> <C>
Revenues:
Ski operations $ 0 $ 0
Real estate management 1,076,246 1,012,439
Rental income 387 293 489,793
1,463,539 1,502,232
Costs and expenses:
Ski operations 0 0
Real estate management 1,025,396 992,644
Rental operations 237,512 241,794
General & administrative expenses 322,597 269,937
1,585,505 1,504,375
Loss from operations (121,966) (2,143)
Other income (expense:)
Interest & other income 44,243 19,878
Interest expense (176,382) (237,093)
(132,139) (217,215)
Loss before Income taxes (254,105) (219,358)
Benefit for income taxes (101,641) (87,743)
Net loss $(152,464) $(131,615)
Net Loss per weighted average
Combined Shares:
Basic $(0.08) $(0.07)
Diluted $(0.08) $(0.07)
</TABLE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 1998 & JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
1998 1997
Cash Flows from Operating Activities:
Net Income (Loss) $(152,464) $(131,615)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 488,945 192,855
Deferred income taxes (101,641) (87,743)
Deferred revenue 247,096 (91,720)
Changes in assets and liabilities:
Accounts & other receivables 73,668 241,109
Refundable income taxes 0 15,823
Prepaid expenses and other current assets (1,839,066) (835,088)
Accounts Payable & accrued liabilities (21,280) (312,011)
Accrued income taxes (214,150) (114,970)
Net cash used in operating activities $(1,518,892) $(1,123,360)
Cash Flows used in Investing Activities:
Additions to properties (175,563) (211,357)
Net cash used in investing activities $(175,563) $(211,357)
Cash flows used in Investing Activities:
Purchase of Treasury stock (1,220) (81,003)
Payment of long-term debt (81,514) (111,285)
Net cash used in financing activities $82,734) $(192,288)
Net decrease in cash and
cash equivalents $(1,777,189) $(1,527,005)
Cash and cash equivalents beginning
of period $2,799,777 $2,387,197
Cash and cash equivalents,
end of period $1,022,588 $ 860,192
Supplemental disclosures of cash
flow information:
Cash paid (rcv'd) during period:
Interest $177,204 $ 51,073
Income taxes, $214,100 $ 99,177
See accompanying notes to unaudited financial statements.
</TABLE>
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 combined condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present fairly
the financial position as of June 30, 1998, and the results of operations
and the statements of cash flows for the periods ended June 30, 1998 and
June 30, 1997.
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 April through November are deferred and recognized as revenue and
operating expenses, ratably, over the operating period.
Depreciation of ski facility fixed assets is now being calculated over
the 12 month period. The expense is deferred until the operating period, at
which time it will be recognized ratably. Previously, depreciation was
calculated only during the operating period.
3. The provision for income taxes for the three months ended June 30,1998
& June 30, 1997 represents the estimated annual effective tax rate for the
year ending March 31, 1999 and the year ending March 31, 1998, respectively.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the three months ended June 30, 1998 (Fiscal 1999) resulted
in a net loss of $(.08) per combined share compared to a net loss of $(.07)
per combined share for the three months ended June 30, 1997
Combined revenue of $1,463,539 represents a decrease of $ 38,693 as compared
to the three months ended June 30, 1997. Ski operations remained unchanged
at $0. Real Estate Management increased $63,807 and Rental Income decreased
$102,500.
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 increased $24,365.
Operating costs increased by $28,470 during the first three months of Fiscal
1999 as compared to the three months ended June 30, 1997.
General and Administrative expenses for the first three months of Fiscal
1999 as compared to the three months ended June 30, 1997, increased by
$52,660 primarily because of supplies and services. Several items are non-
recurring services related to repair and maintenance.
Interest expense for the first three months of Fiscal 1999, as compared to
the three months ended June 30, 1997, decreased by $60,711 because of the
refinancing of the Dreshertown Plaza and the principal pay down on various
notes.
The effective income tax rate for the first three months of Fiscal 1999 was
40% as compared to 34% for the three months ended June 30, 1997. State
taxes account primarily for the Fiscal 1999 effective rate being greater
than the federal statutory rate of 34%.
Per Share Data
Earnings per share are computed as follows:
<TABLE>
<S> <C> <C>
3 Mos ended 3 Mos ended
June 30, June 30,
1998 1997
Net Loss $(152,464) $(131,615)
Weighted average combined shares of common
stock outstanding used to compute basic
earnings per combined common share 1,991,970 1,996,014
Additional combined common shares to be
issued assuming exercise of stock options,
net of combined shares assumed reacquired 14,119 0
Combined shares used to compute dilutive
effect of stock option 2,006,089 1,996,014
Basic earnings per combined common share $(.08) $(.07)
Diluted earnings per combined common share $(.08) $(.07)
</TABLE>
Financial Condition, Liquidity and Capital Resources
Working capital as of June 30, 1998, decreased by $24,443 as compared to
March 31, 1998. This was due principally to a decrease in accounts
receivable and an increase in deferred revenue.
The change in the balances of accounts receivable and deferred operating
costs from March 31, 1998 to June 30, 1998 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 1999 were for various
equipment purchases. The Companies, in Fiscal 1999, will expand camping
sites at Fernridge Campground, construct a communications tower and install
a sewer line for the Pennsylvania Department of Transportation's planned
rest area.
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, 1998
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> JUN-30-1998
<CASH> 1,022,588
<SECURITIES> 0
<RECEIVABLES> 156,814
<ALLOWANCES> 0
<INVENTORY> 257,759
<CURRENT-ASSETS> 3,733,805
<PP&E> 49,082,754
<DEPRECIATION> 31,466,661
<TOTAL-ASSETS> 23,254,433
<CURRENT-LIABILITIES> 2,049,577
<BONDS> 0
0
0
<COMMON> 1,991,892
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 23,254,433
<SALES> 1,463,539
<TOTAL-REVENUES> 1,463,539
<CGS> 0
<TOTAL-COSTS> 1,585,505
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (176,382)
<INCOME-PRETAX> (254,105)
<INCOME-TAX> (101,641)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (152,464)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
