QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT
TO THE 1934 ACT REPORTING REQUIREMENTS
FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________ to ______________
Commission file number #0-8463
PISMO COAST VILLAGE, INC.
(Exact name of small business issuer as specified in its charter)
California 95-2990441
(State or other jurisdiction of (IRS Employer I.D. Number)
incorporation or organization)
165 South Dolliver Street, Pismo Beach, California 93449
(Address of Principal Executive Offices)
(Issuer's telephone number) (805) 773-5649
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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 ___
<PAGE> 1/15
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No _____
FORM 10-QSB
State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: -1800-
<PAGE> 2/15
PART I
__________
Financial Information
_________________________
ITEM 1 - FINANCIAL STATEMENTS
The following financial statements and related information are included in
this Form 10-QSB, Quarterly Report.
1. Accountant's Review Report
2. Balance Sheets
3. Statement of Operations and Retained Earnings (Deficit)
4. Statement of Cash Flows
5. Notes to Financial Statements (Unaudited)
The financial information included in Part 1 of this Form 10-QSB has been
reviewed by Glenn, Burdette, Phillips and Bryson, the Company's Certified
Public Accountants, and all adjustments and disclosures proposed by said firm
have been reflected in the data presented. The information furnished reflects
all adjustments which, in the opinion of management, are necessary to a fair
statement of the results for the interim periods.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company develops its income from two sources, Resort Operations, which
consists of monies earned from site rentals and from rental of RV storage
space, and the second source is Retail Operations which consists of a General
Store and the RV Parts and Service Facilities.
Income from Resort Operations for the three month period ended June 30, 1996,
increased $32,847, or 6.6%, above the same period in 1995, and for the nine
month period ended June 30, 1996, increased $140,518 or 12.2%, above the same
period in 1995. The increase in income from resort operations is the result
of two factors. The first factor, which increased occupancy during the
third quarter by 1,397 or 9.3% paid site nights was additional advertising
using a direct mailer in March of 1996, Cable TV spots from January through
March 1996 and Radio spots during the month of June. The second factor was
RV storage revenues grew $16,701 or 9.0% above the same nine month period last
year ended June 30, 1995. This growth is attributed to an increase of 21 RV
units, or a 2.7% increase in storage inventory.
<PAGE> 3/15
Retail operations revenue increased by $11,061 or 10.2%, for the three month
period ended June 30, 1996 compared to the same period in 1995 and for the
nine month period ended June 30, 1996, Retail Operations increased by $37,092,
or 15.2%, which is a direct result of increased occupancy in the resort and
the local community. The addition of propane sales at the RV Parts and
Service Facility increased the traffic count at the RV Parts Store and in turn
increased store sales.
The Company currently has no plans to increase or decrease its property and
anticipates it will continue to operate the restaurant by lease to an outside
vendor.
Operating expenses for the three month period ending June 30, 1996, were
managed to a decrease of $10,901 or 2.6%, below the same period in 1995 and
for the nine month period ending June 30, 1996, decreased by $25,722, or 2.0%,
below the same period in 1995. This decrease is a result of continued close
management in the areas of risk management, service expenses and recognizing
the one time flood damage expense in 1995.
Cost of Goods Sold expenses for the three month period ended June 30, 1996,
decreased to 56.8% compared to 61.7% for the same period in 1995, and for the
nine month period ending June 30, 1996, costs were at 56.8% compared to 56.4%
for the same period in 1995. The Cost of Goods Sold variance comparing
quarter to quarter is a result of the sales mix of Goods and Services sold at
the retail outlets.
Interest expense for the three month period ended June 30, 1996, was reduced
by $2,727, or 29.0%, below the same period in 1995, and for the nine month
period ending June 30, 1996, was reduced by $6,343, or 22.3%, below the same
period in 1995. These reductions are a result of increase of payments to
principal owed and continued retirement of long term debit.
Income before provisions for taxes on income for the quarter ended June 30,
1996, was $79,686 compared to $42,170 for the same period in 1995. Net
loss before provisions for taxes on income for the nine month period ended
June 30, 1996, decreased by $165,360, or 74.5%, below the same period in 1995.
Reduced Income tax benefits is the result of higher profits and increased
capitalization of the property.
LIQUIDITY
The Company has consistently demonstrated an ability to optimize revenues
developed from the resort and retail operations during the summer season.
Historically, the Company, because of it's
seasonal market, has produced over 40% of it's revenue during the fourth
quarter. The fourth quarters' occupancy is expected to be consistent with
that of the past years. Expenditures not related to the repair of the fresh
water lift station are consistent with prior year's operations and resources
are expected to be adequate to meet these demands.
The Company's cash and certificate of deposit position of $418,233 for the
nine month period ended June 30, 1996, is $10,643, or 2.5%, below the same
period in 1995. Rental deposits for the three month period ended June 30,
1996, increased $20,716, or 5.0%, above the same period ended June 30, 1995,
which reflects a significant increase in advance reservations for the fourth
quarter. Rental deposits for the nine month period ended June 30, 1996,
increased $259,480, or 144.7%, from the period ending September 30, 1995,
which is consistent with prior year's operations and is a result of the
seasonal aspects of the business.
<PAGE> 4/15
During the nine month period ended June 30, 1996, Capital Expenditures
increased by $318,417, or 174.7%, above the same period in 1995, as a result
of the rebuilding of the outfall structure. The Company completed the
rebuilding of the outfall structure, the proposed site renovation project,
purchase of chairs for the Club House, purchased a street sweeper and a
utility golf cart. The other planned capital expenditures included restaurant
renovations, renovation of 48 sites, major road repair and purchase of a
commercial pressure washer for the RV Facilities were completed and the
company expects to install playground equipment prior to the end of the
fiscal year.
A portion of the future capital expenditures previously planned have been
temporarily suspended because of the expenditures required to rebuild the
outfall structure. Capital expenditures not completed prior to the peek
season will be completed after Labor Day. The Company was able to fund all
improvement projects through operations with out using the $150,000 Line of
Credit established as a contingency.
Repayment of all outstanding loans balances are current and the Company, as a
policy, continues to pay an additional portion toward the principal to reduce
debt and interest expense.
<PAGE> 5/15
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Not Applicable
ITEM 2 - CHANGES IN SECURITIES
Not Applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5 - OTHER INFORMATION
Director Danny Shaffer (a non-compensated director elected by the
shareholders of Pismo Coast Village, Inc.) submitted his
resignation on March 13, 1996, due time constraints and other
business demands. The Nominating Committee was directed to
interview applicants to fill the position and at the meeting of
July 20, 1996 they recommended and the Board of Directors took
action to appoint Thomas A. Rourke to fill the vacancy on the
Board.
ITEM 6 - EXHIBITS AND REPORTS ON THE 8-K
(a) Exhibit Index:
Sequential
Exhibit Number Item Description Page Number
24 Consent of Accountants *
27 Financial Data Schedule **
28 Accountant's Review
Report 8
* Contained in Accountant's Review
Report, Exhibit 28.
** Filed electronically only
<PAGE> 6/15
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PISMO COAST VILLAGE, INC.
Date: _________8/14/96__________________
Signature:_____/s/ Ronald Nunlist ______
Ronald Nunlist, President
Date: _________8/14/96_________________
Signature:____/s/ Jerald Pettibone ____
Jerald Pettibone, Chief Financial Officer
<PAGE> 7/15
ACCOUNTANTS' REVIEW REPORT
Board of Directors
Pismo Coast Village, Inc.
165 South Dolliver Street
Pismo Beach, California 93449
We have made a review of the balance sheets of Pismo Coast Village, Inc.
as of June 30, 1996 and 1995, and the related statements of operations
and retained earnings (deficit) for the three month and nine month
periods ended June 30, 1996 and 1995, and the statements of cash flows
for the nine month periods ended June 30, 1996 and 1995, in accordance
with Statements on Standards for Accounting and Review Services issued by
the American Institute of Certified Public Accountants. All information
included in these financial statements is the representation of the
management of Pismo Coast Village, Inc.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of interim
financial information, applying analytical review procedures to financial
data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
examination in accordance with generally accepted auditing standards
which will be performed for the full year with the objective of
expressing an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of September 30, 1995, (presented herein)
and the related statements of operations and retained earnings (deficit)
and cash flows for the year then ended (not presented herein); and in our
report dated October 26, 1995, we expressed an unqualified opinion on those
financial statements.
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
San Luis Obispo, California
July 12, 1996
<PAGE> 8/15
PISMO COAST VILLAGE, INC.
BALANCE SHEETS
June 30, September 30, June 30,
1996 1995 1995
(Unaudited) (Audited) (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 418,233 $ 529,066 $ 376,729
Certificates of deposit 52,147
Accounts receivable 6,900 10,960 13,311
Inventory 70,712 65,826 75,479
Current deferred taxes 47,000 22,624 98,847
Prepaid income taxes 8,890 4,195
Prepaid expenses 8,977 74,079 18,002
--------- ---------- ----------
Total current assets 560,712 702,555 638,710
Pismo Coast Village Recreational
Vehicle Resort and Related Assets -
Net of accumulated depreciation 5,713,509 5,423,666 5,458,600
Other Assets1 15,724 8,255 8,587
---------- ---------- ----------
Total Assets $6,289,945 $6,134,476 $6,105,897
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 55,394 $ 37,796 $ 54,497
Salaries payable 9,200 5,827
Vacation payable 28,456 28,456 27,577
Other accrued expenses 22,443 32,155 19,129
Rental deposits 438,780 179,300 418,064
Income tax payable 6,498
Current portion of long-term debt 31,075 22,712 19,657
---------- ---------- ---------
Total current liabilities 576,148 316,117 544,751
Long-Term Liabilities
Long-term deferred taxes 33,500 23,331 4,410
Long-term debt 215,195 287,451 310,399
---------- ---------- ---------
Total liabilities 824,843 626,899 859,560
---------- ---------- ---------
Stockholders' Equity
Common stock - no par value, issued
and outstanding 1,800 shares 5,647,708 5,647,708 5,647,708
Retained earnings (deficit) (182,606) (140,131) (401,371)
---------- ---------- ----------
Total stockholders' equity 5,465,102 5,507,577 5,246,337
---------- ---------- ----------
Total Liabilities and Stockholders'
Equity $6,289,945 $6,134,476 $6,105,897
========== ========== ==========
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
<PAGE> 9/15
PISMO COAST VILLAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
(UNAUDITED)
For the Three Months For the Nine Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
Income
Resort operations $529,222 $496,375 $1,291,489 $1,150,971
Retail operations 119,508 108,447 281,050 243,958
-------- -------- ---------- ----------
Total income 648,730 604,822 1,572,539 1,394,929
-------- -------- ---------- ----------
Cost and Expenses
Operating expenses 412,690 423,591 1,236,883 1,262,604
Cost of goods sold 67,928 66,914 158,276 137,564
Depreciation 81,405 62,400 210,796 187,195
Amortization 332 331 995 994
Interest 6,689 9,416 22,064 28,407
-------- --------- ---------- ----------
569,044 562,652 1,629,014 1,616,764
-------- --------- ---------- ----------
Income (Loss) Before Provision
for Taxes on Income 79,686 42,170 (56,475) (221,835)
Income Tax Expense (Benefit) 11,707 9,386 (14,000) (66,455)
-------- -------- ---------- ----------
Net Income (Loss) $ 67,979 $ 32,784 (42,475) (155,380)
======== ========
Retained Earnings (Deficit)
Beginning of period (140,131) (245,991)
---------- ----------
End of period $ (182,606) (401,371)
========== ==========
Net Income (Loss)
Per Share $ 37.77 $ 18.21 $ (23.60) $ (86.32)
========== ======== ========== =========
See accountants' review report.
The accompanying notes are an integral part of these financial
statements.
<PAGE> 10/15
PISMO COAST VILLAGE, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED JUNE 30, 1996 and 1995
1996 1995
Cash Flows From Operating Activities
Net loss $ (42,475) $(155,380)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation $ 210,796 $187,195
Amortization 995 994
Increase in certificates
of deposit (2,147)
Decrease in accounts receivable
and prepaid expenses 69,162 69,583
Increase in deferred taxes (14,207) (66,455)
Increase in prepaid income taxes (8,890) (4,195)
Increase in inventory (4,886) (2,496)
Decrease (increase) in other assets (8,464) 1,800
Increase in accounts payable 17,598 32,229
Decrease in salaries payable (9,200) (20,358)
Decrease in other accrued expenses (9,712) (11,593)
Decrease in income tax payable (6,498)
Increase in rental deposits 259,480 246,106
--------- ---------
Total adjustments 522,674 430,663
-------- --------
Net cash provided by
operating activities 453,699 275,283
Cash Flows From Investing Activities
Capital expenditures (500,639) (182,222)
--------- --------
Net cash used in investing
activities (500,639) (182,222)
Cash Flows From Financing Activities
Retirement of debt (63,893) (68,402)
--------- --------
Net cash used in financing
activities (63,893) (68,402)
-------- --------
Net increase (decrease) in
cash and cash equivalents (110,833) 24,659
Cash and Cash Equivalents at Beginning
of Period 529,066 352,070
-------- --------
Cash and Cash Equivalents at End of Period $ 418,233 $ 376,729
======== ========
Schedule of Payments of Interest and Taxes
Payments for interest $ 22,064 $ 28,407
Payments for income tax $ 15,388 $ 3,570
See accountants' review report.
The accompanying notes are an integral part of these financial
statements.
<PAGE> 11/15
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 1996 AND 1995 AND SEPTEMBER 30, 1995
Note 1 - Summary of Significant Accounting Policies
Nature of Business
Pismo Coast Village, Inc. (Company) is a recreational vehicle camping
resort. Its business is seasonal in nature with the fourth quarter, the
summer, being its busiest and most profitable.
Inventory
Inventory has been valued at the lower of cost or market on a first-in,
first-out basis.
Depreciation and Amortization
Depreciation of property and equipment is computed using an accelerated
method based on the cost of the assets, less allowance for salvage value,
where appropriate. Depreciation rates are based upon the following
estimated useful lives:
Building and park improvements 5 to 40 years
Furniture, fixtures, equipment and
leasehold improvements 5 to 31.5 years
Transportation equipment 5 to 10 years
Loan fees of $9,292 net of accumulated amortization of $3,646 at June 30,
1996, $2,321 at June 30, 1995 and $2,653 at September 30, 1995, are
included in other assets. Amortization is computed using the straight-
line method over seven years.
Investment Tax Credits
Investment tax credits are accounted for by the flow-through method.
Earnings (Loss) Per Share
The earnings (loss) per share is based on the 1,800 shares issued and
outstanding.
Reclassification of Previously Issued Financial Statements
Reclassification of certain accounts reported in previously issued
financial statements have been made to enhance comparability with current
financial statements.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Corporation considers
all highly liquid investments including certificates of deposit with a
maturity of three months or less when purchased, to be cash equivalents.
<PAGE> 12/15
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 1996 AND 1995 AND SEPTEMBER 30, 1995
PAGE 2
Note 2 - Pismo Coast Village Recreational Vehicle Resort and Related
Assets
At June 30, 1996, September 30, 1995 and June 30, 1995, property and
equipment included the following:
June 30, 1996 September 30, 1995 June 30, 1995
Land $2,680,850 $2,680,850 $2,680,850
Building and park improvements 5,520,838 5,020,613 5,043,244
Furniture, fixtures, equipment
and leasehold improvements 1,206,007 1,197,457 1,190,275
Transportation equipment 148,227 139,227 139,227
Construction in progress 17,136 2,038
---------- ---------- ----------
9,555,922 9,055,283 9,055,634
Less accumulated depreciation 3,842,413 3,631,617 3,597,034
---------- ---------- ----------
$5,713,509 $5,423,666 $5,458,600
========== ========== ==========
Note 3 - Long-Term Debt
Long-term debt at June 30, 1996, September 30, 1995 and June 30, 1995, is
summarized as follows:
June 30, 1996 September 30, 1995 June 30, 1995
8% Installment note payable,
due in monthly installments
of $125 through April 13,
2010, secured by deed of trust
on the storage lot at 2050
22nd Street, Oceano. $12,510 $12,872 $12,988
10.25% Installment note payable,
due in monthly installments
of $4,426 through August 1,
2000, unpaid balance due in
full September 1, 2000.
Interest is variable, secured
by deed of trust on 300 South
Dolliver and 180 South
Dolliver, Pismo Beach. 233,760 297,291 317,068
-------- -------- --------
246,270 310,163 330,056
Less current portion of
long-term debt 31,075 22,712 19,657
-------- -------- --------
$215,195 $287,451 $310,399
======== ======== ========
<PAGE> 13/15
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 1996 AND 1995 AND SEPTEMBER 30, 1995
PAGE 3
Note 3 - Long-Term Debt (Continued)
Maturities of long-term debt are as follows:
Year Ended June 30, Amount
1997 $ 31,075
1998 33,889
1999 37,609
2000 41,736
2001 92,681
Thereafter 9,280
--------
$246,270
========
Note 4 - Operating Leases
The Company leases two pieces of property to use as storage lots. One is
leased under a cancelable month-to-month lease. The other was entered
into effective January 1, 1992, for five years with an option to extend
the lease for an additional five years. Monthly lease payments are
currently $2,160 and are increased annually based on the Consumer Price
Index. Future minimum lease payments under the second lease are as
follows:
Year Ended June 30,
1997 $12,960
-------
Total $12,960
=======
Note 5 - Line of Credit
The Company has a revolving line of credit for $150,000. The interest
rate is variable at two percent over prime, with an initial rate of 10.50
percent expiring December 28, 1996. The purpose of the loan is to
augment operating cash needs in off season months. There were no
outstanding amounts as of June 30, 1996.
Note 6 - Common Stock
Each share of stock is intended to provide the shareholder with a minimum
free use of the park for 45 days per year. If the Company is unable to
generate sufficient funds from the public, the Company may be required to
charge shareholders for services.
A shareholder is entitled to a pro rata share of any dividends as well as
a pro rata share of the assets of the Company in the event of its
liquidation or sale. The shares are personal property and do not
constitute an interest in real property. The ownership of a share does not
entitle the owner to any interest in any
particular site or camping period.
<PAGE> 14/15
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 1996 AND 1995 AND SEPTEMBER 30, 1995
PAGE 4
Note 7 - Carryforwards Relating to Federal Income Taxes
The Company files its income tax returns as of September 30, the end of
its fiscal year. At September 30, 1995, the Company had net operating
loss carryforwards which expire as follows:
Federal
September 30, 2002 $ 35,000
September 30, 2003 23,000
September 30, 2004 61,000
--------
Total Net Operating Loss Carryforwards $119,000
========
In addition, the Company has the following tax credits available to
offset future federal tax liabilities:
Approximate investment tax credits expiring as follows:
September 30, 1995
September 30, 1996 $ 300
September 30, 1997 2,500
September 30, 1998 3,300
September 30, 1999 2,300
September 30, 2000 3,000
September 30, 2001 400
Note 8 - Income Taxes
The provision for income taxes is as follows:
June 30, June 30,
1996 1995
Income tax expense (benefit) $(14,000) $(66,455)
The difference between the effective tax rate and the statutory tax rates
is due primarily to the effects of the graduated tax rates and state
taxes net of the federal tax benefit.
<PAGE> 15/15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Pismo Coast Village, Inc., for the quarterly period
ended June 30, 1996, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 418,233
<SECURITIES> 0
<RECEIVABLES> 6,900
<ALLOWANCES> 0
<INVENTORY> 70,712
<CURRENT-ASSETS> 560,712
<PP&E> 9,555,922
<DEPRECIATION> 3,842,413
<TOTAL-ASSETS> 6,289,945
<CURRENT-LIABILITIES> 576,148
<BONDS> 0
0
0
<COMMON> 5,647,708
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,289,945
<SALES> 281,050
<TOTAL-REVENUES> 1,572,539
<CGS> 158,276
<TOTAL-COSTS> 1,236,883
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,064
<INCOME-PRETAX> (56,475)
<INCOME-TAX> (14,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (42,475)
<EPS-PRIMARY> (23.60)
<EPS-DILUTED> (23.60)
</TABLE>
