<PAGE>
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 December 31, 1999
( ) 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 December 31, 1999 Common Stock, without par value, 1,951,058 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
December 31, 1999 and March 31, 1999 1 & 2
Combined Condensed Statements of
Operations - Three Months and Nine
Months ended December 31, 1999 and 1998 3
Combined Condensed Statements of
Cash Flows - Nine Months Ended
December 31, 1999 and 1998 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>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
ASSETS December 31, March 31,
1999 1999
(UNAUDITED)
Current Assets:
Cash and cash equivalents
(all funds are interest bearing) 749,315 $2,707,188
Accounts receivable 497,424 559,678
Inventories 377,607 283,946
Prepaid expenses, principally
insurance and real estate taxes 794,567 674,448
Deferred operating costs-net of
deferred revenue-ski facilities 3,707,246 0
--------- ------------
Total current assets 6,126,159 4,225,260
--------- ---------
Other non-current assets 0 36,797
--------- ------
Properties:
Land, principally unimproved 1,869,709 1,867,655
Land improvements, buildings
and equipment 52,319,802 50,533,623
---------- ----------
54,189,511 52,401,278
Less accumulated depreciation
and amortization 33,717,476 32,855,580
---------- ----------
20,472,035 19,545,698
$26,598,194 $23,807,755
See accompanying notes to unaudited financial statements.
<PAGE>1
LIABILITIES AND SHAREHOLDERS' EQUITY
December 31, March 31,
1999 1999
Current Liabilities:
Notes Payable-Line of Credit $1,400,000 $ 0
Current installments of
long-term debt 840,983 461,609
Accounts and other payables 923,250 861,740
Deferred revenue 715,180 328,207
Accrued income taxes 48,607 168,517
Accrued liabilities 1,234,061 1,074,862
--------- ---------
Total current liabilities 5,162,081 2,894,935
--------- ---------
Long-term debt, less
current installments 8,332,623 8,338,296
--------- ---------
Deferred income taxes 2,513,872 2,208,852
--------- ---------
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 Dec. 31, 1999 and
as of March 31, 1999 659,444 659,444
Capital in excess of stated
value 1,461,748 1,461,748
Earnings retained in the
business 10,221,221 9,782,983
---------- ---------
12,342,413 11,904,175
LESS: Cost of 247,090 & 225,190
shares of capital stock in treasury as
of December 31 1999 & March 31,1999,
respectively. 1,752,795 1,538,503
--------- ---------
10,589,618 10,365,672
$26,598,194 $23,807,755
See accompanying notes to unaudited financial statements.
<PAGE>2
BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1999 1998 1999 1998
Revenues:
Ski operations $2,293,328 $2,160,371 $2,293,328 $2,160,371
Real estate management 1,011,876 790,319 4,481,721 3,911,888
Rental income 410,425 403,581 1,333,026 1,245,940
------- ------- --------- ---------
3,715,629 3,354,271 8,108,075 7,318,199
--------- --------- --------- ---------
Costs and expenses:
Ski operations 2,379,330 2,414,304 2,379,330 2,414,304
Real estate management 927,013 791,738 3,804,095 3,297,580
Rental operations 226,078 186,613 697,946 645,405
General & administra-
tive expenses 260,675 286,185 777,520 849,253
3,793,096 3,678,840 7,658,891 7,206,542
--------- --------- --------- ---------
Income(loss)from operations (77,467) (324,569) 449,184 111,657
-------- --------- ------- -------
Other income (expense:)
Interest & other income 11,898 266 70,918 64,909
Interest expense (203,262) (190,798) (548,630) (546,105)
--------- --------- --------- ---------
(191,364) (190,532) (477,712) (481,196)
--------- --------- --------- ---------
Loss before income taxes
& extraordinary item (268,831) (515,101) (28,528) (369,539)
--------- --------- -------- ---------
Benefit for income taxes (109,107) (206,039) (11,412) (147,815)
--------- --------- ---------- ---------
Loss before
extraordinary item (159,724) (309,062) (17,116) (221,724)
--------- --------- -------- ---------
Extraordinary item-assets
contributed from sewer
line construction net of
income taxes of $202,845 163,455 93,575 455,354 219,580
Net income (loss) $ 3,731 ($215,487) $438,238 ($2,144)
======== ========== ======== ========
Basic earnings per weighted average combined share:
Before extraordinary item ($0.08) ($0.16) ($0.01) ($0.11)
Extraordinary item 0.08 0.05 0.23 0.11
---- ---- ---- ----
Net income (loss) $0.00 ($0.11) $0.22 $0.00
===== ====== ========= =====
Diluted earnings per weighted average combined share:
Before extraordinary item ($0.08) ($0.16) ($0.01) ($0.11)
Extraordinary item 0.08 0.05 0.23 0.11
------ ---- ---- ----
Net income (loss) $0.00 ($0.11) $0.22 $0.00
===== ====== ===== =====
<PAGE>3
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS FOR
NINE MONTHS ENDED DECEMBER 31, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
1999 1998
---- ----
Cash Flows used in Operating Activities:
Net income (loss) $ 438,238 $ (2,144)
Adjustments to reconcile net income to net
cash used by operating activities:
Extraordinary item (455,354) (219,580)
Depreciation and amortization 716,707 729,557
Deferred income taxes 305,020 23,656
Deferred revenue 386,973 461,547
Changes in assets and liabilities:
Accounts & other receivables 62,254 (268,316)
Refundable income taxes 0 (24,543)
Prepaid expenses and other current assets (3,192,752) (3,468,944)
Accounts payable & accrued liabilities 220,709 870,851
Accrued income taxes (119,910 (214,090)
---------- --------
Net cash used by operating activities (1,638,115) (2,112,006)
=========== ===========
Cash Flows used in Investing Activities:
Additions to intangible assets (35,615) 0
Additions to land (2,137) 0
Disposition of land 83 83
Contributed assets-sewer line construction 455,354 219,580
Additions to properties (2,296,852) (888,996)
----------- ---------
Net cash investing activities (1,879,167) (669,333)
----------- ---------
Cash flows from Financing Activities:
Purchase of treasury stock (214,292) (201,267)
Proceeds from notes payable, bank 2,350,000 1,950,000
Proceeds from long term debt 800,000 0
Payment of notes payable, bank (950,000) (1,050,000)
Payment of long-term debt (426,299) (291,160)
--------- --------
Net cash from financing activities 1,559,409 407,573
--------- --------
Net decrease in cash &
cash equivalents (1,957,873) (2,373,766)
------------ ---------
Cash & cash equivalents beginning of period 2,707,188 2,799,777
Cash and cash equivalents end of period $749,315 $426,011
======== ========
Supplemental disclosures of cash
flow information:
Cash paid (rcv'd.) during period:
Interest $548,943 $ 539,559
Income taxes $123,395 $ 214,100
<PAGE>4
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
December 31, 1999, and the results of operations and the statements of cash
flows for the three and nine month periods ended December 31, 1999 and 1998.
2. The results of operations for the three and nine 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 facilities for the months of April through November are
deferred and recognized as revenue and operating expenses, ratably, over the
operating period.
3. The provision for income taxes for the nine months ended December 31, 1999
and December 31,1998 represents the estimated annual effective tax rate for the
year ending March 31, 2000 and 1999, respectively.The effective income tax rate
for the first nine months of Fiscal 2000 was 40%, as compared to 34% for the
nine months ended December 31, 1998. State taxes account primarily for the
Fiscal 2000 effective rates being greater than the federal statutory rate of
34%.
<PAGE>5
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the Third Quarter and First Nine Months of Fiscal 2000 resulted
in net income of $.00 and $.22 per combined share compared to a net loss of
$(.11) and $.00 per combined share for the three and nine months ended December
31, 1998.
Combined revenue of $8,108,075 represents an increase of $361,358 and $789,876
for the third quarter and first nine months of Fiscal 2000 as compared to the
three and nine months ended December 31, 1998. Ski operations revenue increased
$132,957 for the third quarter and first nine months of Fiscal 2000 as compared
to the three and nine months ended December 31, 1998.
The increase in ski operation revenue for the three and nine months of Fiscal
2000 as compared to the three and nine months ended December 31, 1998 is
attributable to improved weather conditions as compared to previous year,
resulting in an earlier opening date. Real Estate Management increased $221,557
and $569,833 for the third quarter and first nine months of Fiscal 2000 as
compared to the three and nine months ended December 31, 1998. Rental Income
increased $6,844 and $87,086 for the third quarter and first nine months of
Fiscal 2000 as compared to the three and nine months ended December 31, 1998.
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 for the first nine months of Fiscal 2000 as compared to
the nine months ended December 31, 1998 is due to increased rental income from
the Dreshertown Plaza Shopping Center.
Interest and Other Income increased $11,632 and $6,009 for the third
quarter and first nine months of Fiscal 2000 as compared to the three and nine
months ended December 31, 1998.
Operating costs (net G & A) increased by $139,766 and $524,082 for the third
quarter and first nine months of Fiscal 2000 as compared to the three and nine
months ended December 31, 1998. This increase was primarily due to the expansion
of existing operations, including the introduction of a new summer
festival-Pocono Biker's Music Rally.
General and Administrative expenses decreased by $25,510 and $71,733 for the
third quarter and first nine months of Fiscal 2000 as compared to the three and
nine months ended December 31, 1998. This fluctuation is the result of
consulting fees incurred in Fiscal '99 for Y2K compliance and the
reclassification of several expenses to the Ski Area.
Interest expense increased by $12,464 and $2,525 for the third quarter and first
nine months of Fiscal 2000 as compared to the three and nine months ended
December 31, 1998. This increase is due to the loan for the East Mountain Lift
at Jack Frost Mountain secured June 1999.
<PAGE>6
Per Share Data
Earnings per share are computed as follows:
9 Mos. Ended 9 Mos.Ended
December 31, December 31,
1999 1998
Net Income $ 438,238 $ (2,144)
---------- ------------
Weighted average combined shares of common
stock outstanding used to compute basic
earnings per combined common share 1,967,091 1,983,288
Additional combined common shares to be
issued assuming exercise of stock options,
net of combined shares assumed reacquired 0 0
Combined shares used to complete dilutive
effect of stock option would be anti-
dilutive and are not included 1,967,091 1,983,288
---------------------------
Basic earnings per combined common share $0.22 $0.00
-----------------------
Diluted earnings per combined common share $0.22 $0.00
-----------------------
Risks and Uncertainties
The companies have made their products, systems and infrastructure Year
2000 compliant and have installed new hardware and software. Nothing occurred
January 1, 2000 to indicate any Y2K malfunction, nor are there any indications
that the Companies would be required to make any additional investment in Y2K
compliance.
Financial Condition, Liquidity and Capital Resources
Working capital as of December 31, 1999 decreased by $366,247 as compared to
March 31, 1999. This was due principally to an increase in deferred revenue at
the Ski Areas and an increase in current installments of long-term debt.
The change in the balances of accounts receivable and deferred operating costs
from March 31, 1999 to December 31, 1999 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.
In June 1999, the Companies secured an $800,000 loan for the East Mountain Lift
project, of which $160,000 is classified as current debt.
Moving Forward
Capital expenditures for the First nine months of Fiscal 2000 were for the
continued expansion of campsites at Fern Ridge Campground, the upgrade of the
new dual double lift on East Mountain at Jack Frost Mountain and the purchase of
a new groomer for each Ski Area. The Companies, in Fiscal 2000, will continue to
install a sewer line for the Pennsylvania Department of Transportation's planned
rest area and construct TRAXX, a 50 acre Motocross complex.
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).
<PAGE>7
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: February 10, 2000
<PAGE>8
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000012779
<NAME> BLUE RIDGE REAL ESTATE COMPANY
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-mos
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> DEC-31-1999
<CASH> 749,315
<SECURITIES> 0
<RECEIVABLES> 497,424
<ALLOWANCES> 0
<INVENTORY> 377,607
<CURRENT-ASSETS> 6,126,159
<PP&E> 52,319,802
<DEPRECIATION> 33,717,476
<TOTAL-ASSETS> 26,598,194
<CURRENT-LIABILITIES> 5,162,081
<BONDS> 0
0
0
<COMMON> 1,951,058
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,598,194
<SALES> 8,108,075
<TOTAL-REVENUES> 8,108,075
<CGS> 0
<TOTAL-COSTS> 7,658,891
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (548,630)
<INCOME-PRETAX> (28,528)
<INCOME-TAX> (11,412)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 455,354
<CHANGES> 0
<NET-INCOME> 438,238
<EPS-BASIC> .22
<EPS-DILUTED> .22
</TABLE>
