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 September 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 September 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.
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INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1-Financial Statements
Combined Condensed Balance Sheets
September 30, 2000 and March 31, 2000 1 & 2
Combined Condensed Statements of
Operations - Three Months and Six
Months ended September 30, 2000 and 1999
3
Combined Condensed Statements of
Cash Flows - Six Months Ended
September 30, 2000 and 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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<CAPTION>
BLUE RIDGE REAL ESTATE COMPANY and SUBSIDIARIES
BIG BOULDER CORPORATION AND SUBSIDIARIES
COMBINED CONDENSED BALANCE SHEETS
ASSETS September 30, March 31,
2000 2000
(UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents
(all funds are interest bearing) $261,363 $2,553,510
Accounts receivable 295,846 448,838
Inventories 229,421 213,215
Prepaid expenses, principally
insurance and real estate taxes 544,292 620,284
Deferred operating costs-net of
deferred revenue-ski facilities 3,684,377 0
--------- ------------
Total current assets 5,015,299 3,835,847
--------- ---------
Properties:
Land, principally unimproved
(19,741 acres per land ledger) 1,868,505 1,869,709
Land improvements, buildings
and equipment 52,944,577 52,025,096
---------- ----------
54,813,082 53,894,805
Less accumulated depreciation
and amortization 34,721,721 33,774,181
---------- ----------
20,091,361 20,120,624
$25,106,660 $23,956,471
See accompanying notes to unaudited financial statements.
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LIABILITIES AND SHAREHOLDERS' EQUITY
September 30, March 31,
2000 2000
<S> <C> <C>
Current Liabilities:
Notes Payable-Line of Credit $ 700,000 $ 0
Current installments of
long-term debt 865,404 842,152
Accounts and other payables 758,396 410,430
Accrued claims 108,240 46,601
Accrued income taxes 120,573 293,113
Accrued pension expense &
accrued liabilities 931,345 1,154,637
Deferred revenue 283,424 216,899
------- -------
Total current liabilities 3,767,382 2,963,832
--------- ---------
Long-term debt, less
current installments 7,753,069 7,976,642
--------- ---------
Deferred income taxes 2,453,338 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 Sept.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 10,501,064 10,031,343
---------- ----------
12,622,256 12,152,535
LESS: Cost of 272,390 & 250,790
shares of capital stock in treasury as
of September 30, 2000 & March 31,2000
respectively. 1,991,818 1,788,916
--------- ---------
10,630,438 10,363,619
$25,106,660 $23,956,471
See accompanying notes to unaudited financial statements.
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BLUE RIDGE REAL ESTATE COMPANY AND SUBSIDIARIES
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Ski operations $ 0 $ 0 $ 0 $ 0
Real estate management 2,391,502 2,351,677 3,584,161 3,469,845
Rental income 484,131 508,780 938,514 922,601
------- ------- ------- -------
2,875,633 2,860,457 4,522,675 4,392,446
--------- --------- --------- ---------
Costs and expenses:
Ski operations 0 0 0 0
Real estate management 1,841,370 1,709,202 2,967,712 2,877,082
Rental operations 229,985 277,176 449,949 471,868
General & administra-
tive expenses 266,797 263,877 542,928 516,845
------- ------- ------- -------
2,338,152 2,250,255 3,960,589 3,865,795
--------- --------- --------- ---------
Income from operations 537,481 610,202 562,086 526,651
------- ------- ------- -------
Other income (expense:)
Interest & other income 536,114 174,726 584,989 253,329
Interest expense (184,763) (179,672) (364,354) (345,368)
--------- -------- --------- --------
351,351) (4,946) 220,635 (92,039)
-------- ------ ------- --------
Income before income taxes 888,832 605,256 782,721 434,612
------- ------- ------- -------
Provision for income
taxes 313,000 181,220 313,000 97,695
------- ------- ------- ------
Net income, as restated
in 1999 $575,832 $424,036 $469,721 $336,917
======== ======== ======== ========
Basic and diluted income
per weighted average combined
share as restated in 1999 $0.29 $0.22 0.24 $0.17
===== ===== ==== =====
See accompanying notes to unaudited financial statements.
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<PAGE>
BLUE RIDGE REAL ESTATE COMPANY
BIG BOULDER CORPORATION and SUBSIDIARIES
COMBINED CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six Months Ended September 30, 2000 1999
---- ----
Cash Flows from Operating Activities:
Net Income (Loss) $ 469,721 $ 336,917
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 296,122 294,523
Deferred income taxes 303,393 300,540
Gain on sale of assets (522,363) 0
Deferred revenue 66,525 63,449
Changes in assets and liabilities:
Accounts & other receivables 152,992 (33,262)
Prepaid expenses and other current assets (2,948,174) (2,832,737)
Accounts payable & accrued liabilities 186,313 (214,556)
Accrued income taxes (172,540) (119,940)
--------- -----------
Net cash used by operating activities (2,168,011) (2,205,066)
============ ===========
Cash Flows (used in) from Investing Activities:
Deferred income 0 97,590
Additions to intangible assets 0 (35,615)
Proceeds from disposition of assets 523,567 0
Additions to properties (944,480) (1,648,178)
--------- -----------
Net cash used in investing activities (420,913) (1,586,203)
--------- -----------
Cash flows (used in) from Financing Activities:
Purchase of treasury stock (202,902) (28,889)
Proceeds from notes payable, bank 62,360 650,000
Proceeds from short term financing 700,000 800,000
Payment of long-term debt (262,681) (216,764)
--------- --------
Net cash from financing activities 296,777 1,204,347
------- ---------
Net increase (decrease) in cash &
cash equivalents (2,292,147) (2,586,922)
----------- ---------
Cash & cash equivalents beginning of period 2,553,510 2,707,188
Cash and cash equivalents end of period $261,363 $120,266
======== ========
Supplemental disclosures of cash
flow information:
Cash paid (rcv'd.) during period:
Interest $364,804 $345,866
Income taxes $179,714 $120,000
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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
September 30, 2000, and the results of operations and the statements of cash
flows for the three and six month periods ended September 30, 2000 and
September 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 three and
six month periods ended September 30, 1999 was a decrease in the net income of
$71,602 ($.03 per share) and $94,590 ($.05 per share).
4. The provision for income taxes for the six months ended September 30, 2000
represents the estimated annual effective tax rate for the year ending March 31,
2001. The effective income tax rate for the first six months of Fiscal 2001 was
40%. State taxes account primarily for the Fiscal 2001 effective rates being
greater than the federal statutory rate of 34%.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Operations for the three and six months ended September 30, 2000 (Fiscal 2001)
resulted in net income of .29 and .24 per combined share compared to a net
income of $.22 and $.17 per combined share for the three and six months ended
September 30, 1999.
Combined revenue of $4,522,675 for the three and six months ended September 30,
2000 represents an increase of $15,176 and 130,229 as compared to the three and
six months ended September 30, 1999. Ski operations remained unchanged at $0.
Real Estate Management increased $39,825 and $114,316 for the three and six
months ended September 30, 1999. Rental Income decreased $24,649 and increased
$15,913 for the three and six months ended September 30, 2000 as compared to the
three and six months ended September 30, 1999.
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 $361,388 and 331,660 for the three and six
months ended September 30, 2000 as compared to the three and six months ended
September 30, 1999. This increase was due to the sale of land.
Operating costs increased by $84,977 and $68,711 for the first three and six
months of Fiscal 2001 as compared to the three and six months ended September
30, 1999. This increase was due primarily to the continued growth of our summer
activities.
General and Administrative expenses for the first three and six months of Fiscal
2001 as compared to the three and six months ended September 30, 1999, increased
by $2,920 and $26,083, this fluctuation is the result of a timing difference in
the purchase of supplies. Several items are non-recurring services related to
repair and maintenance.
Interest expense for the first three and six months of Fiscal 2001, as compared
to the three and six months ended September 30, 1999 increased by $5,091 and
$18,986. 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.
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<CAPTION>
Per Share Data
Earnings per share are computed as follows:
6 Mos. Ended 6 Mos.Ended
September 30, September 30,
2000 1999
-------------------------------
<S> <C> <C>
Net Income $ 469,721 $ 336,917
---------------------------
Weighted average combined shares of common
stock outstanding used to compute basic
earnings per combined common share 1,929,625 1,971,791
Additional combined common shares to be
issued assuming exercise of stock options,
net of combined shares assumed reacquired 10,488 11,037
Combined shares used to complete dilutive
effect of stock option 1,940,113 1,982,828
---------------------------
Basic and diluted earnings per combined
common share $0.24 $0.17
-----------------------
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Financial Condition, Liquidity and Capital Resources
Working capital as of September 30, 2000 increased by $375,902 as compared to
March 31, 2000. This was due principally to an increase in deferred revenue
relating to the ski facility.
The change in the balances of accounts receivable and deferred operating costs
from March 31, 2000 to September 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 Half of Fiscal 2001 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.
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).
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<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: November 6, 2000
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