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 June 30, 1996
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 June 30, 1996
$1 par value; 371,716 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 [ ]
<PAGE>
CENTRAL COAL & COKE CORPORATION
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995
Consolidated Statements of Earnings and Retained Earnings
- Six and three months ended June 30, 1996 and 1995
Consolidated Statements of Cash Flows - Six months
ended June 30, 1996 and 1995
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
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL COAL & COKE CORPORATION
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
ASSETS 1996 1995
__________ ___________
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 776,931 755,422
Accounts receivable 0 22,500
Securities maturing within one year,
at amortized cost (note 2):
U. S. government securities 8,335,408 8,337,926
Accrued interest receivable 38,724 38,724
Other 59,672 43,836
__________ __________
Total current assets 9,210,735 9,198,408
Equity securities, at fair value (note 2) 612,781 576,749
Coal deposits, real estate, equipment
and leasehold improvements:
Coal deposits 1,602,882 1,602,882
Mineral rights 39,988 39,988
Surface land 29,249 29,320
Equipment and leasehold improvements 448,245 379,164
__________ __________
2,120,364 2,051,354
Less accumulated depletion and depreciation 677,088 644,965
Net coal deposits, real estate, __________ __________
equipment and leasehold improvements 1,443,276 1,406,389
__________ __________
$ 11,266,792 11,181,546
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Deferred oil lease bonus $ 52,500 0
Accounts payable and accrued expenses 39,340 25,534
Federal and state income taxes 34,895 218,527
__________ __________
Total current liabilities 126,735 244,061
Deferred income taxes 37,105 38,138
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 9,180,655 8,910,623
__________ __________
11,188,543 10,918,511
Less cost of shares in treasury, 4,972 in
1996 and 2,858 in 1995 (138,539) (74,058)
Net unrealized appreciation of investments
available-for-sale, net of deferred taxes
of $28,510 and $29,559 at June 30, 1996
and December 31, 1995 52,948 54,894
__________ __________
Total stockholders' equity 11,102,952 10,899,347
__________ __________
$ 11,266,792 11,181,546
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Earnings and Retained Earnings
Six months ended June 30, 1996 and 1995 and
three months ended June 30, 1996 and 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
Six months ended Three months ended
June 30, June 30,
1996 1995 1996 1995
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Operating revenue:
Coal royalties $ 26,762 30,385 24,793 26,631
Oil and gas royalties 383,611 204,553 195,866 104,521
Oil and other mineral lease
rentals and bonuses 142,681 271,463 72,946 77,961
Food sales 572,404 399,220 282,269 193,291
_________ _________ _________ _________
Total operating revenue 1,125,458 905,621 575,874 402,404
Operating expenses:
Cost of food sales 235,813 162,731 114,320 79,309
Food operations 411,824 220,032 227,380 112,438
General and administrative
expenses 247,398 226,467 118,375 76,262
_________ _________ _________ _________
Total operating expenses 895,035 609,230 460,075 268,009
Operating income 230,423 296,391 115,799 134,395
Nonoperating income:
Investment income 327,570 299,553 174,815 157,372
Gain on sale of real estate 5,725 1,794 4,940 1,794
Other 120 11,937 77 9,357
_________ _________ _________ _________
Total nonoperating income 333,415 313,284 179,832 168,523
Earnings before income
taxes 563,838 609,675 295,631 302,918
Income taxes 200,877 219,228 107,861 104,407
_________ _________ _________ _________
Net earnings 362,961 390,447 187,770 198,511
Retained earnings at
beginning of period 8,910,623 8,771,546 8,992,885 8,870,024
Deduct cash dividends declared
of $.25 per share in 1996
and 1995 (92,929) (93,458) 0 0
_________ _________ _________ _________
Retained earnings at end
of period $ 9,180,655 9,068,535 9,180,655 9,068,535
Earnings per share $ .97 1.05 .51 .53
Weighted average number
of shares of common
stock outstanding 372,326 373,830 371,716 373,830
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Cash Flows
Six months ended June 30, 1996 and 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1996 1995
__________ __________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 362,961 390,447
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depletion and depreciation 32,123 12,550
Amortization of premiums and
discounts of securities, net (192,339) (170,575)
Gain on sale of real estate (5,725) (1,794)
Deferred income taxes 16 10,000
Gain on sale of equity securities (76,800) (21,353)
Changes in assets and liabilities:
Accounts receivable 22,500 22,500
Accrued interest receivable
and other assets (15,836) (2,188)
Deferred oil lease bonus 52,500 155,770
Accounts payable and accrued expenses 13,806 13,159
Federal and state income taxes (183,632) 158,165
__________ __________
Total adjustments (353,387) 176,234
Net cash provided by operating activities 9,574 566,681
Cash flows from investing activities:
Addition to equipment and leasehold
improvements (69,081) (189,807)
Proceeds from matured/called investment
debt securities 7,500,000 6,250,000
Purchases of investment debt securities (7,305,143) (7,277,265)
Proceeds from sale of real estate 5,796 1,800
Purchases of equity securities (273,662) (43,661)
Proceeds from sales of equity
securities 311,435 88,688
__________ __________
Net cash provided by (used in)
investing activities 169,345 (1,170,245)
Cash flows from financing activities:
Purchase of treasury stock (64,481) 0
Payment of dividends (92,929) (93,458)
__________ __________
Net cash used in financing activities (157,410) (93,458)
Net increase (decrease) in cash and
cash equivalents 21,509 (697,022)
Cash and cash equivalents,
beginning of period 755,422 1,558,952
Cash and cash equivalents,
end of period $ 776,931 891,930
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
June 30, 1996
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 June 30, 1996,
and the results of operations and cash flows for the three months ended
June 30, 1996 and 1995.
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) Investment Securities:
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 June 30, 1996
and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
Amortized holding holding Fair
June 30, 1996 cost gains losses value
__________________ __________ __________ __________ __________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 8,335,408 1,265 (1,573) 8,335,100
Available-for-sale:
Equity securities $ 531,324 122,392 (40,935) 612,781
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
_________________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 8,337,926 15,527 (742) 8,352,711
Available-for-sale:
Equity securities $ 492,296 111,891 (27,438) 576,749
</TABLE>
<PAGE>
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
Note (3) Food Operations
Food operations of the Company's fast food bagel and delicatessen
business includes the following expenses for the six months and three
months ended June 30, 1996 and 1995:
<TABLE>
<CAPTION>
Six months Three months
ended June 30, ended June 30,
1996 1995 1996 1995
__________ __________ __________ __________
<S> <C> <C> <C> <C>
Salaries and wages $ 165,704 101,095 88,782 49,380
Occupancy expense 57,624 36,150 35,229 20,172
Depreciation expense 25,905 10,940 12,755 5,302
Utility expense 20,965 11,071 11,358 5,517
Other expenses 141,626 60,776 79,256 32,067
__________ __________ __________ __________
$ 411,824 220,032 227,380 112,438
</TABLE>
<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 six months of 1996 from the end of the last
fiscal year, and it continues very strong. The liquidity of the
Registrant continues to be high.
Revenue from coal royalties was down slightly in the first six months of
1996 from the first six months of 1995 and in the second quarter of 1996
from the second quarter of 1995, in both cases due to a decrease in
production.
Revenue from oil and gas royalties was up substantially in the first six
months of 1996 over the first six months of 1995 and in the second
quarter of 1996 over the second quarter of 1995, due primarily to higher
production and somewhat higher oil prices. Revenue from oil and other
lease rentals and bonuses was down substantially in the first six months
of 1996 from the first six months of 1995, and was down somewhat in the
second quarter of 1996 from the second quarter of 1995 due to fewer new
leases being made in 1996. Three new leases which paid substantial
bonuses were made during the first six months of 1995, while only one
new lease was made during the first six months of 1996.
Revenue from food sales shows a substantial increase in the first six
months of 1996 over the first six months of 1995 (over a 43% increase)
and in the second quarter of 1996 over the second quarter of 1995 (a 46%
increase). This results from the operation of Beekman's Deli Systems,
Limited Liability Company, a limited liability company in which the
Registrant is a majority member (hereinafter "Beekman's"). During the
first six months of 1995, only two fast food bagel and delicatessen
facilities were in operation (Athens, Ohio and Columbus, Ohio), but a
third facility was opened in State College, Pennsylvania in the third
quarter of 1995, so that there were three such facilities fully
operational during the first six months of 1996. A fourth facility was
opened in May of 1996 in an area of San Diego, California known as
Pacific Beach, however, its contribution to food sales revenue was
slight during the second quarter since it only opened in late May.
Revenue from investment income was higher in the first six months of
1996 than in the first six months of 1995 and in the second quarter of
1996 over the second quarter of 1995 due to the overall rate of return
on investments being higher in the current periods, even though there
was a somewhat smaller amount of funds being invested in the current
periods than in the earlier periods under comparison. Other income was
down in both 1996 periods from the corresponding periods in 1995 because
in the second quarter of 1995 the Registrant recognized a gain from the
sale of timber on certain of its real properties which did not recur in
1996.
Included in operating expenses are costs 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 six months of 1996 over the first six
months of 1995, and in the second quarter of 1996 over the second
quarter of 1995, is the same as explained above in connection with
revenue from this operations, that during the 1995 periods there were
only two facilities in operation, while three facilities were in
operation during the current period, with a fourth facility becoming
operational late in the second quarter of 1996. Also contributing to
the increased operating expenses in the current periods were increased
payments to outside service providers in connection with the bagel and
delicatessen business.
<PAGE>
After the close of the quarter, Congress passed and President Clinton
signed legislation increasing the minimum wage in two increments. Since
Beekman's employs a number of workers at the prevailing minimum wage, an
increase in labor expense is anticipated but, at this time, the
Registrant is unable to predict the effect of this increase on its net
income from this operation.
Income taxes were somewhat lower for the first six months of 1996 than
for the first six months of 1995 as a result of decreased earnings
before income taxes.
There was positive net cash provided by operating activities in the
first six months of 1996, but not as much as in the first six months of
1995. One reason for this was that in the first six months of 1996, the
Registrant received less in deferred oil lease bonuses and rentals which
were deferred and recognized as income over the related future periods
for income purposes, than in the first six months of 1995. Also
contributing to this variance was the fact that in the 1995 period there
were substantial tax refunds received which increased cash flow, while
in the 1996 period substantial estimated and other income tax payments
were required which decreased cash flow. There was somewhat more net
proceeds from investment debt securities in the first six months of 1996
than in the first six months of 1995 due to the timing of maturities.
The Board of Directors declared a dividend of twenty-five cents per
share which was paid on May 1, 1996 to stockholders of record on April
15, 1996.
Regarding capital commitments, as discussed above, a fourth fast food
bagel and delicatessen business facility was opened by Beekman's during
the second quarter of 1996 in San Diego, California. The estimated
total capital commitment in connection with opening this new facility
will aggregate approximately $100,000. Other than this capital
expenditure, the Registrant has no specific commitment for material
capital expenditures at the present time. However, the Registrant
continues to actively pursue other business opportunities which will
result in a more productive deployment of its assets and ultimately
increase earnings. As reflected in the accompanying consolidated
financial statements and as is discussed above, aggressive pursuit of
development of increased royalty income from oil and gas properties has
resulted in increased royalty revenue during 1996. Management continues
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 - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
<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: August 13, 1996
By: Gary J. Pennington
(Signature)
Gary J. Pennington,
Assistant Secretary-
General Manager, Principal
Financial and Accounting Officer
Date: August 13, 1996
By: Leonard L. Noah
(Signature)
Leonard L. Noah,
Vice President, Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 776931
<SECURITIES> 8335408
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9210735
<PP&E> 2120364
<DEPRECIATION> 677088
<TOTAL-ASSETS> 11266792
<CURRENT-LIABILITIES> 126735
<BONDS> 0
<COMMON> 376688
0
0
<OTHER-SE> 10726264
<TOTAL-LIABILITY-AND-EQUITY> 11266792
<SALES> 572404
<TOTAL-REVENUES> 1125458
<CGS> 235813
<TOTAL-COSTS> 895035
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 563838
<INCOME-TAX> 200877
<INCOME-CONTINUING> 362961
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 362961
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
