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SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 2000 Commission File
No. 1-3871
CALIFORNIA-ENGELS MINING COMPANY
(Exact name of registrant as specified in its charter)
State of California 94-0357560
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
117 Crescent Street
P.O. Box 778
Greenville, California 95947-0778
(Address of principal executive office) (Zip Code)
(530) 284-6191
(Registrant's telephone number including area code)
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 Exchange Act of 1934 during the preceding 12 months (or for such shorter 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 _____
CLASS OUTSTANDING AT SEPTEMBER 30, 2000
Capital Stock, par 760,954.34 Shares
Value, $0.25 per share
Filing Contains 8 pages
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
(Unaudited)
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
September 30 December 31
2000 1999
ASSETS
Current Assets
Cash $ 54,467 $ 71,295
Deeds of trust - current portion 2,837 5,317
Deferred income tax - -
Reimbursements receivable - -
Deposits - -
Prepaid income tax - -
Total Current Assets 57,304 76,612
Property and Equipment, net 398,243 450,804
Other Assets
Investments available-for-sale 1,575 1,549
Investments held-to-maturity 2,367 2,790
Deeds of trust - net of current portion 174,544 30,830
Total Other Assets 178,486 35,169
Total Assets $ 634,033 $ 562,585
LIABILITIES
Current Liabilities
Income taxes payable $ 23,284 $ 4,697
Deferred tax liabilities 50 50
Accrued expenses 41,594 48,614
Notes payable, current portion 1,894 6,444
Total Current Liabilities 66,822 59,805
Long-term Liabilities
Notes payable, net of current portion 114,563 124,866
Total Long-term Liabilities 114,563 124,866
Total Liabilities 181,385 184,671
STOCKHOLDER'S EQUITY
Stockholder's Equity
Capital stock, par value $0.25: 4,000,000
shares authorized 760,954.3 shares
issued and outstanding in 1999 and 2000 190,241 190,241
Accumulated other comprehensive
income (loss) 288 288
Reduction surplus 2,800,917 2,800,917
Accumulated deficit (2,538,798) (2,613,532)
Total Stockholder's Equity 452,648 377,914
Total Liabilities and Stockholder's Equity $ 634,033 $ 562,585
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended September 30,
2000 1999
Revenue
Timber and rock revenue $ 480 $ 695
Dividend income 200 347
Interest income 2,717 1,030
Total Revenue 3,397 2,072
Operating and General Expenses
Depreciation 501 1,836
Director fees 2,000 -
Insurance - -
Miscellaneous 268 473
Memberships and dues - -
Office and storage rents 3,127 878
Office expenses 460 217
Professional fees 930 -
Reclamation plan expense 12,738 -
Repairs and maintenance - 30
Superior quarry expense - -
Taxes and licenses 222 976
Travel and per diem 230 -
Vehicle expense 249 355
Wages and related taxes 3,334 -
Total Operating and General
Expenses 24,059 4,765
Net Income (Loss) from Operations (20,662) (2,693)
Other Income and (Expense)
Depletion - -
Gain (loss) on sale of securities - -
Gain on sale of land 143,240 -
Interest (4,752) (1,110)
Timber management expense 5,319 (8,156)
Office and bookkeeping service 5,790 -
Total other income and (expense) 149,597 (9,266)
Income (Loss) Before Taxes 128,935 (11,959)
Provision for Income Taxes (29,824) -
Net Income (Loss) $ 99,111 $ (11,959)
Earnings (Loss) per Share $ 0.130 $ (0.016)
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended September 30,
2000 1999
Revenue
Timber and rock revenue $ 1,525 $ 2,798
Dividend income 967 1,209
Interest income 5,706 4,646
Total revenue 8,198 8,653
Operating and General Expenses
Depreciation 1,503 3,672
Director fees 2,000 -
Insurance 1,900 1,900
Miscellaneous 631 1,255
Memberships and dues - 350
Office and storage rents 9,383 2,883
Office expenses 3,140 768
Professional fees 3,970 1,838
Reclamation plan expense 12,738 -
Repairs and maintenance 1,050 3,770
Superior quarry expense - -
Taxes and licenses 3,111 3,114
Travel and per diem 714 411
Vehicle expense 945 973
Wages and related taxes 9,511 -
Total Operating and General
Expenses 50,596 20,934
Net Income (Loss) from Operations (42,398) (12,281)
Other Income and (Expense)
Depletion - -
Gain (loss) on sale of securities - -
Gain (loss) on sale of land 143,240 -
Interest (12,679) (1,110)
Timber management expense (6,160) (11,042)
Office and bookkeeping service 22,365 -
Total Other Income and (Expense) 146,766 (12,152)
Income (Loss) Before Taxes 104,368 (24,433)
Provision for Income Taxes (29,824) -
Net Income (Loss) $ 74,544 $ (24,433)
Earnings (Loss) per Share $ 0.098 $ (0.032)
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
2000 1999
Cash Flows from Operating Activities
Net Income (Loss) $ 74,544 $ (24,433)
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation and depletion 1,503 3,672
Amortization of GNMA discount - -
(Gain) loss on sale of securities - (2,948)
(Gain) loss on sale of land (143,228) -
(Increase) decrease in assets
Prepaid expenses - -
Deposits - 563
Increase (decrease) in liabilities
Taxes payable 18,587 (1,650)
Accrued expenses (7,020) 49,114
Net cash provided (used) by
operating activities (55,614) 24,318
Cash Flows from Investing Activities
Payments received on notes receivable 4,683 35,232
Notes issued (49,117) -
Purchases of securities and investments (26) -
Proceeds from sale of securities - 20,824
Proceeds from sale of land 98,248 -
Return of principal GNMA 613 1,095
Capital expenditures (762) (233,003)
Net cash provided (used) by
investing activities 53,639 (175,852)
Cash Flows from Financing Activities
Purchase of treasury shares - (90)
Notes payable - 177,600
Payments on notes payable (14,853) (28,890)
Net cash provided (used)
by financing activities (14,853) 148,620
Net Increase (Decrease) in Cash and
Cash Equivalents (16,828) (2,914)
Cash and Cash Equivalents,
Beginning of period 71,295 10,128
End of period $ 54,467 $ 7,214
CALIFORNIA-ENGELS MINING COMPANY
FIXED ASSET SUMMARY
(Unaudited)
September 30, December 31,
2000 1999
Furniture and Equipment $ 38,273 $ 33,775
Land 239,702 116,696
Less: Accumulated Depreciation (25,713) (18,700)
Subtotal 252,262 131,771
Timber Management Development 164,078 109,636
Less: Accumulated Depletion (18,097) (2,896)
Subtotal 145,981 106,740
Total Property and Equipment $ 398,243 $ 238,511
CALIFORNIA-ENGELS MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements are unaudited but, in the opinion of the management, include all adjustments, consisting solely of normal items, necessary for a fair presentation. Interim results are not necessarily indicative of results for a full year.
These financial statements should be read in conjunction with the financial statements and notes, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. The accounting policies set forth in those annual financial statements are the same as the accounting policies utilized in the preparation of these financial statements, except as modified for appropriate interim financial statement presentation.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
During the 30 years its mining properties were leased, the Company endeavored to increase working capital, total assets and shareholder's equity in the event that its lessee, Placer Dome U.S. Inc., terminated its Mining Lease and Option to Purchase agreement and return the mining properties to the Company. This event occurred effective April 20, 1993. Thus, funds were available to begin preparation of a Non-Industrial Timber Management Plan which was approved by the California Department of Forestry and became effective July 2, 1999. The objective of the Company is to earn income from the sale of its timber so funds are available for the maintenance of its properties and the implementation of its timber management plan. Because timber revenues are sporadic, in order to provide regular monthly income the President of the Company, on January 1, 2000, transferred management of the office building at 117 Crescent Street, Greenville, CA and its related bookkeeping business to the Company.
The Company filed a Notice of Timber Operations pursuant to its Non-Industrial Timber Management Plan with the California Department of Forestry on September 7, 2000 for a mechanical thinning and biomass project on its Engels Parcel and is completing a Timber Harvest Plan for its Henry Parcel.
Results of Operations
The Company had net gain, for the three months ending September 30, of $ 99,111 in 2000, compared to net loss of $ 11,959 in the 1999 period. The change in net income for the third quarter of 2000 over the third quarter of 1999 was due to the gain on the sale of land.
The Company had net gain, for the nine months ending September 30, of $ 74,544 in 2000, compared to net loss of $ 24,433 in the 1999 period. The change in net income for the first nine months of 2000 compared with the corresponding period in 1999 was also due to the gain on the sale of land.
The Company's principal sources of income are office management and bookkeeping fees, sale of timber, interest, dividends, capital gains on sale of real estate and sale of rock and sand. There is no assurance that any of the sources of income will continue at current rates into the future.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995
The matters discussed in this report on Form 10-Q, when not historical matters, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from projected results. Such risks, trends and uncertainties include the highly cyclical nature of the forest products industry, general economic conditions, competition, price conditions or trends for the Company's products, the possibility that timber supply could increase if governmental, environmental or endangered species policies change, and limitations on the Company's ability to harvest its timber due to adverse natural conditions or increased governmental restrictions. These and other risks are described from time to time in the Company's filings with the Securities and Exchange Commission. Many of these factors are beyond the Company's ability to control or predict. The Company disclaims any intent or obligation to update its forward-looking statements, whether a result of receiving new information, the occurrence of future events, or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Commodity Prices
The Company's earnings and cash flow may be significantly impacted by changes in the market price of timber. Timber prices fluctuate and may be affected by numerous factors, such as seasonal demand, production levels, economic policies of central banks, interest rates and producer hedging.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
None
SIGNATURE
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.
CALIFORNIA-ENGELS MINING COMPANY
Registrant
DATE:
November 10, 2000 By _/s/ Norman A. Lamb_____Norman A. Lamb, President
and Chief Executive Officer
DATE: November 10, 2000 By _/s/ James E. Brousseau__
James E. Brousseau, Secretary-
Treasurer and Chief Financial
Officer
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