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 June 30, 2000
Commission File No. 1-3871
CALIFORNIA-ENGELS MINING COMPANY
(Exact name of registrant as specified in its charter)
State of California
(State or other jurisdiction of incorporation or organization)
94-0357560 (I.R.S. Employer Identification Number)
Address: 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
Capital Stock, par value: $0.25 per share.
OUTSTANDING AT JUNE 30, 2000: 760,954.34 shares.
Filing Contains 11 pages.
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
(Unaudited)
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
ASSETS
<CAPTION>
June 30 December 31
2000 1999
--------- ---------
<S> <C> <C>
CURRENT ASSETS
Cash $ 3,820 $ 71,295
Deeds of Trust - current
portion $ 6,215 $ 5,317
Deferred income tax $ - $ -
Reimbursements receivable $ - $ -
Deposits $ - $ -
Prepaid income tax $ 4,360 $ -
Total Current Assets $ 14,395 $ 76,612
PROPERTY AND EQUIPMENT, NET $ 450,564 $ 450,804
OTHER ASSETS
Investments available-for-sale $ 1,576 $ 1,549
Investments held-to-maturity $ 2,481 $ 2,790
Deeds of trust - net of current
portion $ 76,659 $ 30,830
Total Other Assets $ 80,716 $ 35,169
Total Assets $ 545,675 $ 562,585
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
June 30 December 31
2000 1999
--------- --------
<S> <C> <C>
CURRENT LIABILITIES
Income taxes payable $ - $ 4,697
Deferred tax liabilities $ 50 $ 50
Accrued expenses $ 47,114 $ 48,614
Notes payable, current portion $ 23,739 $ 6,444
Total Current Liabilities $ 70,903 $ 59,805
LONG TERM LIABILITIES
Notes payable, net of current
portion $ 121,422 $ 124,866
Total Liabilities $ 192,325 $ 184,671
</TABLE>
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
BALANCE SHEETS
(Unaudited)
<TABLE>
STOCKHOLDER'S EQUITY
<CAPTION>
June 30 December 31
2000 1999
--------- ---------
<S> <C> <C>
STOCKHOLDERS' EQUITY
Capital stock, par value $.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 (2,638,096) (2,613,532)
Total Stockholders' Equity $ 353,350 $ 377,914
Total Liabilities and
Stockholders' Equity $ 545,675 $ 562,585
</TABLE>
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
2000 1999
----- -----
<S> <C> <C>
REVENUE
Timber and rock revenue $ - $ 2,352
Dividend income 57 811
Interest income 2,289 1,887
Total revenue $ 2,346 $ 5,050
OPERATING AND GENERAL EXPENSES
Depreciation $ 501 1,836
Director fees - -
Insurance - -
Miscellaneous 171 295
Office and storage rents 3,128 878
Office expenses 2,405 157
Professional fees 3,040 1,838
Reclamation plan expense - -
Repairs and maintenance 1,050 3,315
Superior quarry expense - -
Taxes and licenses 2,316 1,888
Travel and per diem 484 219
Vehicle expense 252 504
Wages and related taxes 2,445 -
Total operating and
general expenses $ 15,792 $ 10,930
Net income (loss) from
operations $ (13,446) $ (5,880)
OTHER INCOME and (EXPENSE)
Depletion $ - $ -
Gain (loss) on sale
of securities $ - $ -
Gain on sale of land $ - $ -
Interest $ (3,935) $ -
Resource management expense $ (10,819) $ (2,886)
Office and bookkeeping
service $ 7,205 $ -
Total other income
and(expense) $ (7,549) $ (2,886)
Income(Loss)Before Taxes $ (20,995) $ (8,766)
Provision for income taxes $ - $ -
Net Income (Loss) $ (20,995) $ (8,766)
Earnings (Loss) Per Share $ (0.028) $ (0.012)
</TABLE>
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
2000 1999
----- -----
<S> <C> <C>
REVENUE
Timber and rock revenue $ 1,045 $ 2,512
Dividend income 767 862
Interest income 2,989 3,614
Total revenue $ 4,801 $ 6,988
OPERATING AND GENERAL EXPENSES
Depreciation $ 1,002 1,836
Director fees - -
Insurance 1,900 1,900
Miscellaneous 363 1,802
Office and storage rents 6,256 2,006
Office expenses 2,680 616
Professional fees 3,040 1,838
Reclamation plan expense - -
Repairs and maintenance 1,050 3,740
Superior quarry expense - -
Taxes and licenses 2,889 2,138
Travel and per diem 484 219
Vehicle expense 693 810
Wages and related taxes 6,177 -
Total operating and
general expenses $ 26,534 $ 16,905
Net income (loss) from
operations $ (21,733) $ (9,917)
OTHER INCOME and (EXPENSE)
Depletion $ - $ -
Gain (loss) on sale
of securities $ - $ -
Gain on sale of land $ - $ -
Interest $ (7,927) $ -
Resource management expense $ (11,479) $ (2,886)
Office and bookkeeping
service $ 16,575 $ -
Total other income
and(expense) $ (2,831) $ (2,886)
Income(Loss)Before Taxes $ (24,564) $ (12,803)
Provision for income taxes $ - $ -
Net Income (Loss) $ (24,564) $ (12,803)
Earnings (Loss) Per Share $ (0.032) $ (0.017)
</TABLE>
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
2000 1999
------ ------
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C>
Net Income (loss) $ (24,564) $ (12,803)
Adjustments to reconcile
net income (loss)to net
cash provided (used) by
operating activities:
Depreciation and depletion 1,002 1,836
Amortization of GNMA discount - -
(Gain)loss on sale
of securities - -
(Gain)on sale of land - -
(Increase)decrease in assets
Prepaid expenses (4,360) (2,978)
Deposits - 563
Increase (decrease) in liabilities
Taxes payable (4,697) (3,272)
Accrued expenses (1,500) -
Net cash provided (used)
by operating activities $ (34,119) $ (16,654)
<CAPTION>
CASH FLOWS FROM INVESTING ACTIVITIES
<S> <C> <C>
Payments received on
notes receivable $ 2,584 $ 36,733
Notes issued (49,311) -
Purchases of securities
and investments (26) (10)
Proceeds from sale
of securities - 20,824
Proceeds from sale of land - -
Return of principal GNMA 309 678
Capital expenditures (762) (5,235)
Net cash Provided (Used) by
investing activities (47,206) 52,990
</TABLE>
<PAGE>
CALIFORNIA-ENGELS MINING COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
2000 1999
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of treasury shares $ - $ (90)
Notes payable 17,000 3,000
Payments on notes payable (3,150) 3,000
Net cash provided (used) by
financing activities $ (13,850) $ (90)
Net increase (decrease) in
cash and cash equivalents $ (67,475) $ (36,246)
CASH AND CASH EQUIVALENTS,
Beginning of Period $ 71,295 $ 10,128
CASH AND CASH EQUIVALENTS,
End of Period $ 3,820 $ 46,374
</TABLE>
FIXED ASSET SUMMARY
<TABLE>
<CAPTION>
June 30, December 31
2000 1999
<S> <C> <C>
Furniture and equipment $ 38,273 $ 33,775
Land 291,522 116,696
Less: Accumulated depreciation (25,212) (18,700)
Subtotal $ 304,583 $ 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 $ 450,564 $ 238,511
</TABLE>
<PAGE>
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 is presently preparing a Timber Harvest Plan on its Henry
Parcel and a mechanical thinning project on its Engels Parcel under its
Non-Industrial Timber Management Plan.
Results of Operations
The Company had net loss, for the three months ending June 30, of $20,995
in 2000, compared to net loss of $8,766 in the 1999 period.
The increase in net loss for the second quarter of 2000 over the
second quarter of 1999 was due to increased resource management expense,
office expense and interest.
The Company had net loss, for the six months ending June 30, of $24,564
in 2000, compared to net loss of $12,803 in the 1999 period. The increase
in net loss for the first six months of 2000 compared with the corresponding
period in 1999 was due to increased resource management expense, office
expense and interest.
<PAGE>
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 factors include, among others, the
speculative nature of mineral exploration, commodity prices,
production and reserve estimates, environmental and government
regulations, availability of financing, force majeure events, and
other risk factors as 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 as 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
<PAGE>
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
August 11, 2000 By: /s/ Norman A. Lamb
Norman A. Lamb, President
and Chief Executive Officer
August 11, 2000 By: /s/ James E. Brousseau
James E. Brousseau, Secretary-
Treasurer and Chief
Financial Officer
