Form 1O-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or
15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended March 31, 1995
Commission File No. 0-1392
Central Coal & Coke Corporation and Subsidiaries
Incorporated in State of Delaware IRS Number: 44-0195290
127 West 10th Street, Room 666
Kansas City, Missouri 64105
Phone: 816-842-2430
Common stock outstanding as of March 31, 1995
$1 par value; 373,830 shares
The Registrant (l) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such
filing requirements for the past ninety days.
Yes [X] No [ ]
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CENTRAL COAL & COKE CORPORATION
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - March 31, 1995 and
December 31, 1994
Consolidated Statements of Earnings and Retained Earnings
- Three months ended March 31, 1995 and 1994
Consolidated Statements of Cash Flows - Three months
ended March 31, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL COAL & COKE CORPORATION
Consolidated Balance Sheets
March 31, 1995 and December 31, 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
ASSETS 1995 1994
_________ __________
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,531,941 1,588,952
Accounts receivable 0 22,500
Securities maturing within one year,
at amortized cost (note 3):
Municipal bonds 40,000 40,000
U. S. government securities 5,803,935 6,172,887
__________ __________
5,843,935 6,212,887
Accrued interest receivable 26,892 49,283
Other 43,696 34,131
__________ ___________
Total current assets 8,446,464 7,907,753
Securities maturing beyond one year,
at amortized cost (note 3):
U. S. government and government
agency securities 999,775 999,751
Equity securities, at fair value (note 3) 699,238 606,969
Coal deposits, real estate, equipment
and leasehold improvements:
Coal deposits 1,602,882 1,602,882
Mineral rights 39,988 39,988
Surface land 29,894 29,894
Equipment and leasehold improvements 144,327 144,327
__________ __________
1,817,091 1,817,091
Less accumulated depletion and depreciation 596,726 591,048
Net coal deposits, real estate, __________ __________
equipment and leasehold improvements 1,220,365 1,226,043
Deferred income taxes 0 1,164
__________ __________
$ 11,365,842 10,741,680
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Deferred oil lease bonus $ 233,657 0
Accounts payable and accrued expenses 18,105 17,321
Dividends payable 93,458 0
Federal and state income taxes 165,864 39,715
__________ __________
Total current liabilities 511,084 57,036
Deferred income taxes 30,816 0
Stockholders' equity:
Common stock of $1 par value; authorized
500,000 shares; issued 376,688 shares 376,688 376,688
Additional capital 1,631,200 1,631,200
Retained earnings 8,870,024 8,771,546
__________ __________
10,877,912 10,779,434
Less cost of 2,858 shares in treasury (74,058) (74,058)
Net unrealized appreciation (depreciation)
of investments available for sale, net of
deferred taxes of $10,816 and $(11,164) at
March 31, 1995 and December 31, 1994 20,088 (20,732)
__________ __________
Total stockholders' equity 10,823,942 10,684,644
__________ __________
$ 11,365,842 10,741,680
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Earnings and Retained Earnings
Three months ended March 31, 1995 and 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1995 1994
_________ __________
<S> <C> <C>
Operating revenue:
Coal royalties $ 3,754 900
Oil and gas royalties 100,032 81,024
Oil and other mineral lease rentals
and bonuses 193,502 4,170
Food sales 205,929 94,942
__________ __________
Total operating revenue 503,217 181,036
Operating expenses:
Cost of food sales 83,422 36,379
Food operations 107,594 48,001
General and administrative expenses 150,205 96,465
__________ __________
Total operating expenses 341,221 180,845
Operating income 161,996 191
Nonoperating income:
Investment income 142,181 124,074
Gain on sale of real estate 0 13,500
Other 2,580 44
__________ __________
Total nonoperating income 144,761 137,618
Earnings before income taxes 306,757 137,809
Income taxes (note 2) 114,821 54,575
__________ __________
Net earnings 191,936 83,234
Retained earnings at beginning of period 8,771,546 8,675,962
Deduct cash dividends declared of $.25 per
share in 1995 and $.50 per share in 1994 (93,458) (186,915)
__________ __________
Retained earnings at end of period $ 8,870,024 8,572,281
Earnings per share $ .51 .22
Weighted average number of shares of
common stock outstanding 373,830 373,830
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Cash Flows
Three months ended March 31, 1995 and 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1995 1994
_________ __________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 191,936 83,234
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depletion and depreciation 6,156 3,105
Amortization of premiums and
discounts of securities, net (83,634) (29,044)
Deferred income taxes 10,000 10,000
Gain on sale of real estate 0 (13,500)
Gain on sales of equity securities (5,457) (3,852)
Changes in assets and liabilities:
Accounts receivable 22,500 22,508
Accrued interest receivable
and other assets 12,348 (31,729)
Deferred oil lease bonus 233,657 0
Accounts payable and accrued expenses 784 4,829
Federal and state income taxes 126,149 (18,242)
__________ __________
Total adjustments 322,503 (55,925)
Net cash provided by operating activities 514,439 27,309
Cash flows from investing activities:
Proceeds from matured/called
investment debt securities 6,250,000 2,000,000
Purchases of investment debt securities (5,797,438) (1,962,100)
Proceeds from sale of real estate 0 13,500
Purchases of equity securities (37,262) (329,511)
Proceeds from sales of equity securities 13,250 19,752
Net cash provided by (used in)
investing activities 428,550 (258,359)
Net increase (decrease) in cash
and cash equivalents 942,989 (231,050)
Cash and cash equivalents,
beginning of period 1,588,952 1,729,515
Cash and cash equivalents,
end of period $ 2,531,941 1,498,465
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
March 31, 1995
Note (1) Basis of Presentation:
In the opinion of the Central Coal & Coke Corporation (the
Company), the accompanying unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of March 31, 1995,
and the results of operations and cash flows for the three months ended
March 31, 1995 and 1994.
Oil Lease Bonuses
Oil lease bonuses which relate to future periods are deferred and
recognized as income over the related future periods (generally one
year).
Note (2) Income Taxes:
The Company's Missouri corporation income tax returns for the years
1985, 1986, 1987, 1989, 1990 and 1991 were examined by the Missouri
Department of Revenue, and additional taxes and interest thereon were
assessed. The Company made certain payments under protest in 1993 and
1994 in connection with the examination adjustments.
On February 3, 1995, the Company entered into a settlement
agreement with the Missouri Director of Revenue which settled all issues
relating to the examinations. The Company had adequately provided for
its tax obligations with respect to this matter.
Note (3) Securities, Common Stocks and Options:
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (Statement 115) on January 1, 1994. This
statement requires that investments in debt and certain equity
securities be classified in one of three categories: (1)held-to-
maturity securities, which are carried at amortized cost; (2)trading
securities, which are carried at fair market value, with unrealized
gains and losses included in earnings; and (3)available-for-sale
securities, which are carried at fair value, with unrealized gains and
losses excluded from earnings and reported in a separate component of
stockholders' equity, net of related income taxes. The effect on the
Company's consolidated financial statements at January 1, 1994 of
initially adopting Statement 115 was immaterial.
(Continued)
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2
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
The amortized cost, gross unrealized holding gains, gross
unrealized holding losses and fair value for held-to-maturity and
available-for-sale securities by major security type at March 31, 1995
and December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
Amortized holding holding Fair
March 31, 1995 cost gains losses value
______________ __________ __________ __________ __________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 6,803,710 15,226 (2,706) 6,816,230
Municipal bonds 40,000 400 0 40,400
__________ __________ __________ __________
$ 6,843,710 15,626 (2,706) 6,856,630
Available-for-sale:
Equity securities $ 668,334 55,913 (25,009) 699,238
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
_________________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 7,172,638 3,309 (900) 7,175,047
Municipal bonds 40,000 400 0 40,400
__________ __________ __________ __________
$ 7,212,638 3,709 (900) 7,215,447
Available-for-sale:
Equity securities $ 638,865 21,526 (53,422) 606,969
</TABLE>
Note (4) Dividends:
During the quarter ended March 31, 1995, the Company's Board of
Directors declared a $.25 dividend per share which is payable May 1,
1995.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
There was no significant change in the financial condition of the
Registrant during the first quarter of 1995 from the end of the last
fiscal year, and it continues very strong. The liquidity of the
Registrant continues to be high.
Revenue from oil and gas royalties increased approximately 23% in the
first quarter of 1995 over the first quarter of 1994 due to increased
production and somewhat higher oil prices. Revenue from oil and other
mineral lease rentals and bonuses increased significantly in the first
quarter of 1995 over the first quarter of 1994. This was due primarily
to three new leases entered into in the first quarter of 1995 generating
substantial bonus income in that quarter, including one fairly sizable
lease on a portion of the Registrant's Texas property. Also included in
revenue from this source for the first quarter of 1995 was a substantial
rental payment for a lease extension entered into with respect to
certain of the Registrant's property in Vernon Parish, Louisiana.
Revenue from food sales shows a substantial increase in the first
quarter of 1995 over the first quarter of 1994 which results from the
operation of Beekman's Deli Systems, Limited Liability Company, a
limited liability company in which the Registrant is a majority member
(hereafter "Beekman's") which is the successor by statutory merger to a
wholly-owned subsidiary of the Registrant which carried on this business
activity in 1994. Only one fast food bagel and delicatessen facility was
in operation in early 1994 (that being the one in Athens, Ohio), and the
second facility located in Columbus, Ohio was not opened until the third
quarter of 1994, thus accounting for the increased revenue reflected in
the first quarter of 1995 when both facilities were fully operational.
Revenue from investment income was higher in the first quarter of 1995
over the first quarter of 1994 due to the overall rate of return on
investments being higher in the current period and a somewhat greater
amount of funds being invested in the current period than in the first
quarter of 1994. In the first quarter of 1994, there was revenue from
gain on occasional nonrecurring sales of real estate, while there were
no such sales during the first quarter of 1995.
Included in operating expenses for the first quarter of 1995 and the
first quarter of 1994 are cost of food sales and food operations. Both
occur in connection with the fast food bagel and delicatessen business
now being conducted by Beekman's as discussed above. The primary reason
for the increased amount of expenditures in these categories in the
first quarter of 1995 over the first quarter of 1994 is the same as
explained above in connection with revenue from this operations, that
during the 1994 period there was only one facility in operation while
two facilities were in operation in the current period. Also
contributing to the increased operating expenses in the current period
were increased payments to outside service providers in connection with
the bagel and delicatessen business.
Income taxes were materially higher for the first quarter of 1995 over
the first quarter of 1994 as a result of increased earnings before
income taxes.
The Registrant adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," (Statement 115) on January 1, 1994. The
effect on the Registrant's consolidated financial statements at
January 1, 1994 of initially adopting Statement 115 was immaterial. See
note 3 to the accompanying consolidated financial statements for a more
detailed explanation of this accounting change.
<PAGE>
2
Net cash provided by operating activities was up substantially in the
first quarter of 1995 over the first quarter of 1994. A contributing
factor to this increase was the receipt of certain deferred oil lease
bonuses and rentals in the first quarter of 1995 but which were deferred
and recognized as income over the related future periods for income
purposes.
Regarding capital commitments, in addition to the two locations of the
fast food bagel and delicatessen business currently being operated by
Beekman's, negotiations are currently underway for a third facility to
be located in State College, Pennsylvania. The capital commitment of
the Registrant in connection with the first two facilities was
approximately $220,000 in the aggregate through the end of 1994. The
capital commitment in connection with the proposed facility at State
College, Pennsylvania could be approximately $200,000. Other than these
capital expenditures, the Registrant has no specific commitments for
material capital expenditures at the present time. However, the
Registrant continues to actively review other business opportunities
which would result in a more productive deployment of its assets and
ultimately increase earnings. As reflected in the accompanying
consolidated financial statements and discussed above, aggressive
pursuit of the development of increased royalty and rental and bonus
income from oil and gas properties has already resulted in increased
revenue in 1995. Management plans to continue to aggressively pursue
development of such income from its real property and mineral interests.
<PAGE>
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 - Attached
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Information regarding matters submitted to a vote of security holders
subsequent to the first quarter of 1995, but prior to the date of this
report, is submitted as follows:
(a) The annual meeting of stockholders of the Registrant was held
April 19, 1995.
(b) Directors were elected at that meeting and the five nominees
named in the Proxy Statement previously filed with the Securities and
Exchange Commission pursuant to Regulation 14A and elected at the
meeting were as follows:
Leonard Noah
S. M. Riddle
Beekman Winthrop
Phelps M. Wood
Ernest N. Yarnevich, Jr.
There were no other directors whose term of office as a Director
continued after that meeting.
(c) The following matters were voted on by the stockholders at that
meeting:
(i) A resolution to appoint the firm of KPMG Peat Marwick LLP as
independent public accountant to examine the financial statements of the
Registrant for the year ending December 31, 1995 and to perform other
appropriate accounting services was approved. The holders of 338,355
shares cast their votes in favor of the resolution, the votes of 29
shares were cast against it and the holders of 130 shares abstained.
(ii) A resolution was voted on by the stockholders approving the
"Directors' Non-Qualified Stock Option Plan" in the form previously
approved by the Board of Directors and described in the Proxy Statement
sent to stockholders and filed with the Securities and Exchange
Commission under Regulation 14A. The holders of 241,363 shares cast
their votes in favor of such proposal, the votes of 81,282 shares were
cast against it and the holders of 15,869 abstained. Thus, the
resolution was approved.
(iii) Tabulation of votes with respect to nominees for Directors
is as follows:
Votes Withhold
for authority
Leonard Noah 281,821 56,693
S. M. Riddle 281,822 56,692
Beekman Winthrop 278,755 59,759
Phelps M. Wood 278,756 59,758
Ernest N. Yarnevich, Jr. 281,655 56,859
(d) There were no solicitations subject to Rule 14a-11 and thus
there were no settlements or terms of settlements thereof.
<PAGE>
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.
CENTRAL COAL & COKE CORPORATION
(Registrant)
Date: May 10, 1995
By: Gary J. Pennington
(Signature)
Gary J. Pennington,
Assistant Secretary-
General Manager, Principal
Financial and Accounting Officer
Date: May 10, 1995
By: Leonard L. Noah
(Signature)
Leonard L. Noah,
Vice President, Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Mar-31-1995
<CASH> 2531941
<SECURITIES> 7542948
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8446464
<PP&E> 1817091
<DEPRECIATION> 596726
<TOTAL-ASSETS> 11365842
<CURRENT-LIABILITIES> 511048
<BONDS> 0
<COMMON> 376688
0
0
<OTHER-SE> 10447254
<TOTAL-LIABILITY-AND-EQUITY> 11365842
<SALES> 205929
<TOTAL-REVENUES> 503217
<CGS> 83422
<TOTAL-COSTS> 257799
<OTHER-EXPENSES> 93458
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 306757
<INCOME-TAX> 114821
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<EPS-PRIMARY> .51
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