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, 2000
( ) 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: (570) 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, 2000
Common Stock, without par value, 1,925,758
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>
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
June 30, 2000 and March 31, 2000 1 & 2
Combined Condensed Statements of
Operations - Three Months ended
June 30, 2000 & 1999 3
Combined Condensed Statements of
Cash Flows - Three Months Ended
June 30, 2000 & 1999 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
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<TABLE>
<CAPTION>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
ASSETS June 30, March 31,
2000 2000
(UNAUDITED)
<S> <C> <C>
Current Assets
Cash and cash equivalents
(all funds are interest bearing) $ 905,787 $2,553,510
Accounts receivable 396,256 448,838
Inventories 216,403 213,215
Prepaid expenses, principally
insurance and real estate taxes 562,058 620,284
Deferred operating costs-net of
deferred revenue-ski facilities 1,822,594 0
--------- -----------
Total current assets 3,903,098 3,835,847
--------- ---------
Properties:
Land, principally unimproved (19,873 1,869,709 1,869,709
acres per land ledger)
Land Improvements, buildings
and equipment 52,284,211 52,025,096
---------- ----------
54,153,920 53,894,805
---------- ----------
Less accumulated depreciation
and amortization 34,256,018 33,774,181
---------- ----------
19,897,902 20,120,624
---------- ----------
$23,801,000 $23,956,471
=========== ===========
See accompanying notes to unaudited financial statements.
1
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, March 31,
2000 2000
Current Liabilities:
Current installments of
long-term debt $ 843,369 $ 842,152
Accounts and other payables 497,524 410,430
Accrued claims 49,067 46,601
Accrued income taxes 120,543 293,113
Accrued pension expense 536,876 494,837
Accrued liabilities 675,731 659,800
Deferred revenue 513,186 216,899
------- -------
Total current liabilities 3,236,296 2,963,832
--------- ---------
Long-term debt, less
current installments 7,855,829 7,976,642
--------- --------
Deferred income taxes 2,151,836 2,149,945
--------- ---------
Deferred income 502,433 502,433
------- -------
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, 2000 and as of March 31, 2000 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 9,925,232 10,031,343
---------- ----------
12,046,424 12,152,535
---------- ----------
LESS: Cost of 272,390 & 250,790
shares of capital stock in treasury as
of June 30, 2000 & March 31, 2000
respectively. 1,991,818 1,788,916
--------- ---------
10,054,606 10,363,619
---------- ----------
$23,801,000 $23,956,471
=========== ===========
See accompanying notes to unaudited financial statements.
2
<PAGE>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
June 30, June 30,
2000 1999
Revenues:
Ski operations $ 0 $ 0
Real estate management 1,192,659 1,118,168
Rental income 454,383 413 821
-------- -------
1,647,042 1,531,989
--------- ---------
Costs and expenses:
Ski operations 0 0
Real estate management 1,126,342 1,167,880
Rental operations 219,964 194,692
General & administrative expenses 276,131 252,968
-------- --------
1,622,437 1,615,540
--------- ---------
Income from operations 24,605 ( 83,551)
------ ---------
Other income (expense:)
Interest & other income 48,875 78,603
Interest expense (179,591) (165,696)
------- -------
(130,716) (87,093)
-------- -------
Loss before Income taxes (106,111) (170,644)
--------- ---------
Benefit for income taxes 0 (83,525)
-- --------
Net loss, as restated in 1999 (106,111) (87,119)
========= ========
Basic and diluted loss per weighted
average combined share as restated
in 1999 ($0.05) ($0.05)
See accompanying notes to unaudited financial statements.
3
<PAGE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2000 & JUNE 30, 1999
(UNAUDITED)
2000 1999
Cash Flows from Operating Activities:
Net Income (Loss) $(106,111) $ (87,119)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 481,837 473,833
Deferred income taxes 1,891 (29,494)
Gain on sale of assets (3,000) 0
Changes in assets and liabilities:
Accounts & other receivables 52,582 148,525
Prepaid expenses and other current assets (1,767,556) (1,825,468)
Accounts Payable & accrued liabilities 147,530 (432,489)
Accrued income taxes (172 570) 30
Deferred revenue 296,287 163,878
------- -------
Net cash used in operating activities $(1,069,110) $(1,588,304)
----------- -----------
Cash Flows (used in) from Investing Activities:
Deferred income 0 25,988
Proceeds from disposition of assets 3,000 0
Additions to properties (259,115) (791,867)
------- ---------
Net cash used in investing activities $(256,115) $(765,879)
------- ----------
Cash flows (used in) from Financing Activities:
Purchase of Treasury stock (202,902) (10,012)
Proceeds from notes payable, bank 0 800,000
Payment of long-term debt (119,596) (102,601)
------- ---------
Net cash used in financing activities $ ($322,498) $ 687,387
Net increase (decrease) in cash and
cash equivalents $(1,647,723) $(1,666,796)
Cash and cash equivalents, beginning
of period $2,553,510 $2,707,188
Cash and cash equivalents,
end of period $ 905,787 $ 1,040,392
======= ==========
Supplemental disclosures of cash
flow information:
Cash paid during period:
Interest $179,780 $ 166,253
======== =========
Income taxes,
See accompanying notes to unaudited financial statements.
4
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<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 combined
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position as
of June 30, 2000, and the results of operations and the statements of cash flows
for the three month period ended June 30, 2000 and June 30, 1999.
Certain information and footnote disclosures have been condensed or omitted
pursuant to the rules and regulations of the Securities and Exchange
Commission.These combined financial statements should be read in conjunction
with the financial statements and notes thereto included in the Companies'
Annual Report on Form 10-K for the year ended March 31, 2000.
2. The Companies and the subsidiaries, under SFAS No. 131, operate in two
business segments - Ski Operations and Real Estate Management/Rental Operations.
The results of operations for the three months 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 Operations for the months of April through November are
deferred and recognized as revenue and operating expenses, ratably, over the
operating period. Therefore revenues and operating expenses of the Real Estate
Management/Rental Operations are as disclosed on the statement of operations.
Depreciation of ski facility fixed assets is calculated over the 12
month period. The expense is deferred until the operating period, at which time
it will be recognized ratably.
3. In 1999, the Companies, under a contract with the Pennsylvania Department of
Transportation ("PDOT"), began construction of a two-mile sewer line from the
Jack Frost treatment plant to a rest station on Interstate Route 80. The monies
received from PDOT in 1999 were recorded, net of estimated income taxes, as an
extraordinary item. During the fourth quarter of Fiscal 2000, management
determined that the amounts received under the contract related to construction
of the sewer line should be deferred and recognized as income over the period in
which depreciation on those assets is charged. The amounts related to
reimbursement of income taxes and non-capital overhead expenses will be
recognized as income in the periods in which the related income taxes and
overhead expenses are incurred. Accordingly, results of operations for 1999 and
the first three quarters of 2000 have been restated. The effect on the quarter
ended June 30, 1999 was an increase in the net loss of $25,988($.02 per share).
4. A benefit for income taxes for the three months ended June 30, 2000
has not been provided due to quarterly losses and the existance of net operating
loss carryforwards for federal and state tax purposes.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the three months ended June 30, 2000 (Fiscal 2001) resulted in a
net loss of $(.05) per combined share compared to a net loss of $(.05) per
combined share for the three months ended June 30, 1999.
Combined revenue of $1,647,042 represents an increase of $ 115,053 as compared
to the three months ended June 30, 1999. Ski operations remained unchanged at
$0. Real Estate Management increased $74,491 and Rental Income increased
$40,562.
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.
Rental income increase in revenue is from investment properties.
Interest and Other Income increased $19,038. This increase was due to interest
income received from a pending land transaction.
Operating costs decreased by $16,266 during the first three months of Fiscal
2001 as compared to the three months ended June 30, 1999. This decrease was due
primarily to a reduction in services provided to homeowner associations.
General and Administrative expenses for the first three months of Fiscal 2001 as
compared to the three months ended June 30, 1999, increased by $23,163, this
fluctuation is the result of timing differences in the purchase of supplies.
Several items are non-recurring services related to repair and maintenance.
Interest expense for the first three months of Fiscal 2001, as compared to the
three months ended June 30, 1999, increased by $13,895. This increase is
attributable to an additional mortgage note payable for the East Mountain Lift
at Jack Frost Mountain and an increase in the prime interest rate.
6
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<TABLE>
<CAPTION>
Per Share Data
Loss per share are computed as follows:
3 Mos ended 3 Mos ended
June 30, June 30,
2000 1999
<S> <C> <C>
Net Loss $(106,111) $(87,119)
-------- ------
Weighted average combined shares of common
stock outstanding used to compute basic
earnings per combined common share 1,933,491 1,972,291
Additional combined common shares to be
issued assuming exercise of stock options,
net of combined shares assumed reacquired 10,240 10,921
------ ------
Combined shares used to compute dilutive
effect of stock option 1,943,731 1,983,212
========= ========
Basic and diluted loss per combined
common share $(.05) $(.05)
== ==
</TABLE>
Financial Condition, Liquidity and Capital Resources
Working capital as of June 30, 2000, decreased by $205,213 as compared to
March 31, 2000. This was due principally to an increase in deferred revenue
relating to summer activities.
The change in the balances of accounts receivable and deferred operating costs
from March 31, 2000 to June 30, 2000 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 2000 were for various
equipment purchases. The Companies, in Fiscal 2001, will continue in the
process of developing a motocross park on 50 acres of Company land at Jack
Frost Mountain and in the construction of a communication tower located
at the Fernridge Campground.
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).
7
<PAGE>
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, 2000
8
