ANNUAL REPORT FOR SMALL BUSINESS ISSUERS SUBJECT
TO THE 1934 ACT REPORTING REQUIREMENTS
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [Fee Required]
For the Fiscal Year ended September 30, 1997
Commission file number 0-8463
PISMO COAST VILLAGE, INC.
(Name of small business issuer in its charter)
California 95-2990441
(State or other jurisdiction (IRS Employer ID Number)
of incorporation or organization)
165 South Dolliver Street, Pismo Beach, CA 93449
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number (805)773-5649
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange
on Which Registered.
N/A N/A
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
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 90 days past.
YES XX NO __
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-KSB or any amendment to this Form 10-KSB. XX
<PAGE> 1 of 41
State issuer's revenues for its most recent fiscal year. $2,629,131
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days (See definition of affiliate in Rule 12b-2 if the
Exchange Act). $15,930,000
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 1,800
Statements in this Annual Report on Form 10-KSB which express the
"Belief", "Anticipation", "Intention" or "Expectation", as well as other
statements which are not historical fact, and statements as to business
opportunities, market conditions, and operating performance insofar as they
may apply prospectively, are forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 and involve risks
and uncertainties that could cause actual results to differ materially from
those projected.
<PAGE> 2 of 41
FORM 10-KSB PART I
ITEM 1 DESCRIPTION OF BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS
Pismo Coast Village, Inc., the "Registrant" or the "Company" was
incorporated under the laws of the State of California on April 2, 1975.
The Company's sole business is owning and operating a recreational vehicle
resort (hereinafter the "Resort") in Pismo Beach, California. The Resort
has continued to enhance its business by upgrading facilities and services
to better serve customers.
(b) BUSINESS OF ISSUER
The Company is engaged in only one business, namely, the ownership and
operation of the Resort. The Company generates revenue from rental of
camping sites, recreational vehicle storage, recreational vehicle repair
and retail sales from a general store and recreational vehicle parts store.
Accordingly, all of the revenues, operating profit (loss) and identifiable
assets of the Company, are attributable to a single industry segment.
Pismo Coast Village, Inc., is a full service 400 space recreational vehicle
resort. Its resort operations include site rentals, trailer rentals, RV
storage business, video arcade, laundromat, restaurant rental, and other
income sources related to the operation. The retail operations include a
general store, RV parts store, and RV repair shop. In addition, the
Company has a recreation department that provides a youth program and
recreational equipment rentals.
PUBLIC AND SHAREHOLDER USERS
The present policy of the Company is to offer each shareholder the
opportunity for 45 days of free use of sites at the Resort, 25 days may be
used during prime time and 20 days during non-prime time. The free use of
sites by shareholders is managed by designating the days of the year as
prime time and non-prime time. A prime time day is one that is most in
demand, for example Memorial Day weekend and the period from mid-June until
Labor Day. Non-prime time is that time with the least demand. Each
shareholder is furnished annually a calendar that designates the prime and
non-prime time days, it also provides a schedule of when reservations can
be made and the procedure for making reservations. Shareholders' free use
of sites average approximately 20% to 22% annually, refer to Results of
Operations MD&A, page 9.
SEASONAL ASPECTS OF BUSINESS
The business of the Company is seasonal and is concentrated during prime
days of the year which are defined as follows: Washington's birthday,
Easter week, Memorial Day weekend, summer vacation months, Labor Day,
Thanksgiving weekend and Christmas vacation.
<PAGE> 3 of 41
WORKING CAPITAL REQUIREMENTS
By accumulating reserves during the prime seasons, the Company is able
generally to meet its working capital needs during off-season. Industry
practice is to accumulate funds during the prime season and use such funds
as necessary in the off-season. The Company has arranged, but not used, a
$150,000 line of credit to ensure funds are available, if necessary, in the
off-season.
COMPETITION
The Company is in competition with nine other RV parks located within a
five-mile radius. Since its property is the only property located adjacent
to the beach, it has a competitive edge. The Company is recognized as a
recreational vehicle resort rather than a park because of its upgraded
facilities and amenities which include 21 Channels of Satellite TV, a
heated pool, a miniature golf course and a recreational program. The
Resort is noted for its ability to provide full service which includes RV
Storage and RV Repair and Service. The Resort is consistently given high
ratings by industry travel guides based on resort appearance, facilities
offered, and recreational programs. In Fiscal Year 1997, Pismo Coast
Village, Inc., was awarded the designation of RV Park of the Year, Mega
Park Category 1996, by the California Trailer Park Association (CTPA) which
has a membership of over 380 properties. These factors allow the Resort to
price its site rental fees well above most of its competition based on
perceived value received.
Competition for the tourist market is keen between the cities on the
Central Coast of California. Resort management and staff are involved with
the City of Pismo Beach, Chamber of Commerce, Conference and Visitors
Bureau, and Business Improvement Group and are major sponsors in
cooperative events and advertising. The Resort continues to market off
season discounts using its reservations' database to enhance repeat
business. To attract new business the Company uses mailing lists of
recreational vehicle owners and places its brochure with companies selling
or renting recreational vehicles. The marketing program has been expanded
targeting groups and clubs by providing entertainment and catering services
through the restaurant. The Company's marketing plan was funded by $45,447
for Fiscal Year 1997 which was developed out of operating revenues. The
major source of the Company's business is repeat business, which has been
developed by attention to good customer service.
ENVIRONMENTAL REGULATION
The Company is affected by federal, state and local antipollution laws and
regulations. Due to the nature of its business operations (camping, RV
storage and small retail store sales) the discharge of materials into the
environment is not considered to be of a significant concern and the EPA
has not designated the Company as a potentially responsible party for clean
up of hazardous waste.
<PAGE> 4 of 41
The main property of the Resort is located within the boundaries of those
lands under the review and purview of the Coastal Commission of the State
of California and the City of Pismo Beach. The water and sewer systems are
serviced by the City of Pismo Beach. The Company was subject to state and
federal regulations regarding the Fiscal Year 1996 reconstruction of an
outflow structure that empties into Pismo Creek at the north boundary of
the Resort. Because the Resort is within the wetlands area, the California
Coastal Commission required permits for repair and construction to be
reviewed by the following agencies: City of Pismo Beach, State Lands
Commission, Regional Water Quality Board, State of California, California
Department of Fish and Game, State Department of Parks and Recreation and
the Army Corps of Engineers. The requirement for these permits involved
the diversion of capital from operations, but did not increase cost of debt
financing.
EMPLOYEES
As of September 30, 1997, the Company employed approximately 44 people with
17 of these on a part time basis and 27 on full time basis. Due to the
seasonal nature of the business, additional staff are needed during peak
periods and fewer during the off season. Staffing levels during the fiscal
year ranged from approximately 38 employees to 51 employees. Management
considers its labor relations to be good.
ADDITIONAL INFORMATION
The Company's Business and Plan of Operation for the fiscal year starting
October 1, 1996, required revision as a result of the illness and death of
General Manager Blaine Forrest in April 1997 and subsequent hiring of
General Manager Jay Jamison in June of 1997. The revised plan considered a
reduced level of planned capital expenditures and increased debt reduction.
Capital expenditures in Fiscal Year 1997 included completion of renovation
of 123 sites including installation of sod, irrigation, and crushed granite
site pad at a cost of $210,477, a trailer moving vehicle at a cost of
$47,283, and $69,900 for laundry building and public square area
renovations, information systems, resort lighting, maintenance equipment,
and preliminary development and design of a new RV storage lot.
Beginning October 1, 1994, site rental rates at the Resort were increased
to range from $22 - $26 per day during the off season and $32 - $36 per day
during prime time. Rates were not increased for Fiscal Year 1997-97 and an
increase in rates is not being considered for Fiscal Year 1997-98. It is
anticipated the current rates will continue to market site usage at its
highest value and a rate increase would possibly affect the Company's
ability to capture an optimum market share.
<PAGE> 5 of 41
ITEM 2 DESCRIPTION OF PROPERTIES
The Company's principal asset consists of the Resort which is located at
165 South Dolliver Street in Pismo Beach, California. The Resort is built
on a 26-acre site and includes 400 campsites with full hookups and nearby
restrooms with showers, and common facilities, such as a restaurant, video
arcade, recreation hall, general store, swimming pool, laundromat, and
three playgrounds.
In 1980 the Company purchased a 2.2 acre parcel of real property located at
2050 22nd Street, Oceano, California, at a price of $66,564. The property
is being used by the Company as a storage facility for recreational
vehicles. The storage capacity of this lot is approximately 114 units.
In 1981 the Company exercised an option and purchased a 3.5 acre parcel
located at 300 South Dolliver Street, Pismo Beach, California, at a price
of $300,000. The property, which previously had been leased by the
Company, is used primarily as a recreational vehicle storage yard. The
storage capacity of this lot is approximately 223 units.
In 1988 the Company purchased approximately 0.8 acres of property at 180
South Dolliver Street, Pismo Beach, California, across the street from the
main property, consisting of a large building with a storefront and one
large maintenance bay in the rear. Also, on the property is a smaller
garage-type building with three parking stalls. The Company enlarged its
recreational vehicle repair operation, added RV storage for approximately
eleven units and developed the storefront into an RV parts store. The
property was purchased for $345,000, of which $300,000 was financed and
paid in full during Fiscal 1997.
There is no deferred maintenance on any of the Resort's facilities. The
Company's facilities are in good condition and adequate to meet the needs
of the stockholder users as well as the public users. The Company
continues to develop sufficient revenue from general public sites sales to
support a continued positive maintenance program and to meet the demands of
shareholders use of free sites.
The Resort, RV Repair Shop and Parts Store and two storage facilities
constitute substantially all the Company's property, and are owned in fee.
Two storage lots and beach access used by the shareholders and general
public visitors are leased by the Company pursuant to the herein below
described leases.
<PAGE> 6 of 41
1. TRAILER STORAGE YARDS. In 1986 the Company leased a parcel of land
100 feet wide by 1,600 feet long from the Southern Pacific Railroad Corp.
The property is being used by the Company as a storage facility for
recreational vehicles. Capital improvements in the amount of $40,000 were
made to this property, which provides storage for approximately 183 units.
The property was leased for $950 per month the first year, $1,400 per month
for the second year, with continuing years tied to the "CPI" Index, or Fair
Market Value of the property according to the lease agreement. During
Fiscal Year 1997, lease payments were made in the amount of $34,955, Fiscal
Year 1998 lease payments will be $35,040, and Fiscal Year 1999 lease
payments will be $35,040 plus applicable changes in index or valuation.
In 1991 the Company developed a lease for a five-acre RV storage lot at the
Oceano Airport clear zone as storage for approximately 337 RV's. This lot
was developed to replace a 100-unit storage lot that was closed when the
lease was not renewed. The lease on the new storage lot is for five years
with an additional five-year option which has been executed. Construction
was completed in January 1992 and capital improvements in the amount of
$330,768 were made to this property of which $300,000 was financed and paid
in full during Fiscal 1997.
Lease payments for the first year of control and occupancy area were $1,500
per month, $2,000 for the second year and continuing years are tied to the
"CPI" index. During Fiscal Year 1997, lease payments were made in the
amount of $26,065, Fiscal Year 1998 lease payments will be $26,493 plus
applicable changes in index, and Fiscal Year 1999 lease payments will be
$26,453 plus index changes.
2. AMENDMENT NO. 4 TO CONTRACT, PISMO STATE BEACH LOCATED IN SAN LUIS
OBISPO COUNTY, PISMO COAST VILLAGE, INC., DATED JULY 1976. (Pertaining to
the Boardwalk Concession Contract for construction and maintenance of three
boardwalks to the beach for pedestrians at Pismo State Beach and to provide
for continued access through the sand dunes to the State Beach abutting the
Resort.) This contract is between the Company and the State of California
Department of Parks and has been renewed annually since June 30, 1984. The
contract was originally assigned by the former owner to the Company by an
assignment, dated December 1, 1975. Continued ocean access is granted
annually by payment of a license fee of $400.
The Company holds no lease agreement with any affiliated party.
The Resort leases out areas to other companies to insure that the best
service and equipment are available for guest use. These areas are leased
from the Company pursuant to the herein below described leases.
<PAGE> 7 of 41
1. RECREATIONAL ARCADE AGREEMENT WITH COIN AMUSEMENTS, INC. This
agreement is dated October 1, 1996, and pursuant to this agreement the
Company granted Coin Amusements, Inc., the concession to operate various
coin-operated game units at the Resort. The one year term expired on
September 30, 1997. This agreement has been subsequently renewed for a one
year term ending September 30, 1998; continued renewal is expected without
significant impact.
2. WEB SERVICE COMPANY, GOLETA, CA. The five-year lease expired on July
22, 1997, and was reissued for a five year period which will expire on July
22, 2002, and grants to Web Service Company the right to place and service
coin-operated laundry machines at the Resort on a 50-50 basis for all
revenues derived from their use. Continued renewal is expected without
significant impact.
3. RESTAURANT AGREEMENT, THE LITTLE DECK, PISMO BEACH, CA. In 1993 the
Company reorganized its restaurant operations from a company-managed
facility to a leased restaurant operation. The concessionaire operates the
restaurant facilities as an independent food service operation. A one year
lease was entered into on June 1, 1997, at an annual rent of $4,800. It is
expected this agreement will be renewed and continued without significant
impact. The Company does not expect to resume operation of the restaurant
facilities, but intends to continue leasing to a third party.
ITEM 3 LEGAL PROCEEDINGS
The Company or its property is not a party to any pending legal
proceedings.
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SHAREHOLDERS
Paragraph inapplicable
PART II
ITEM 5 MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS
(a.) There is no market for the Company's common stock, and there are only
limited or sporadic transactions in its stock. Mr. Kenneth L. McFarlen, a
licensed broker/dealer, handles sales of the Company shares as Central
Coast Investments. The last transaction the Company is aware of occurred
on September 30, 1997, at a price of $9,000 for one share conveyed. This
price was used for computation of aggregate market value of Company stock
on page 2 of this Report.
<PAGE> 8 of 41
(b.) The approximate number of holders of the Company's common stock on
September 30, 1997 was: 1,527
(c.) The Company has paid no dividends since it was organized in 1975, and
although there is no legal restriction impairing the right of the Company
to pay dividends, the Company does not intend to pay dividends in the
foreseeable future. The Company selects to invest its available working
capital to enhance the facilities at the Resort.
(d.) Mr. McFarlen, the Company's on-site broker, renewed his agreement
which expired on March 31, 1993, to lease 200 square feet at the Resort,
from which he conducts sales activities in the Company's stock. He has
agreed to continue this lease on a month to month agreement and is current
under his lease agreement. Termination or cancellation may be made by
either Lessor or Lessee by giving the other party ninety (90) days written
notice.
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Pismo Coast Village, Inc., operates as a 400 space recreational vehicle
resort. The Corporation includes additional business operations to provide
its users with a full range of services expected of a recreational resort.
These services include a restaurant, store, video arcade, laundromat,
recreational vehicle repair, parts shop and an RV storage operation.
The Corporation is authorized to issue 1,800 shares, of one class, all with
equal voting rights and all being without par value. Transfers of shares
are restricted by Company bylaws. One such restriction is that transferees
must acquire shares with intent to hold the same for the purpose of
enjoying camping rights and other benefits to which a stockholder is
entitled. Each share of stock is intended to provide the stockholder with
the opportunity for 45 days of free site use per year. However, if the
Corporation is unable to generate sufficient funds from the public, the
Company may be required to charge shareholders for services.
Management is charged with the task of developing sufficient funds to
operate the Resort through site sales to general public guests by
allocating a minimum of 175 sites to general public use and allocating a
maximum of 225 sites for stockholder free use. The other service centers
are expected to generate sufficient revenue to support themselves and/or
produce a profit.
<PAGE> 9 of 41
Certain information included herein contains statements that may be
considered forward-looking statements within the meaning of Section 21E of
the Securities Exchange Act of 1934, such as statements relating to
anticipated expenses, capital spending and financing sources. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and,
accordingly, such results may differ from those expressed in any forward-
looking statements made herein. These risks and uncertainties include, but
are not limited to, those relating to competitive industry conditions,
California tourism and weather conditions, dependence on existing
management, leverage and debt service, the regulation of the recreational
vehicle industry, domestic or global economic conditions and changes in
federal or state tax laws or the administration of such laws.
CURRENT OPERATING PLANS
The Board of Directors continues its previously established policy by
adopting a stringent, conservative budget for Fiscal Year 1998, which
projects a positive cash flow of approximately $313,821 from operations.
While the Company projects a positive cash flow, this cannot be assured for
Fiscal Year 1998. Capital expenditures planned for 1998 include the
continued enhancement of RV sites and services offered with rebuilding of
a restroom complex, replacing an electrical generator, upgrading of
computer systems, and continuing the enhancement of the maintenance area,
equipment and buildings. These investments are projected to be
approximately $290,000, most of which can be deferred, if necessary. These
proposed capital improvements will be funded from cash from operations,
from existing working capital and, if necessary, from a line of credit
obtained by the Company in the event projected cash is not developed.
Thus, budgeted cash flow for the year is expected to be within the
Company's capabilities based on its present working capital position.
Fiscal 1997 marked the end of a long range plan to revitalize the Company's
main marketable asset. Over the past eight years, each of its 400 camping
sites have been totally refurbished and upgraded. Each site pad has been
replaced with a compacted, crushed granite material, and its surrounding
area has been relandscaped with sod and irrigation. Each site has been
connected with a satellite television system and new lights have been
installed throughout the Resort. With this project completion, the Company
plans on continuing improvements to its sites, expanding electrical
services, enhancing service centers, and improving the Resort's operational
efficiency. These projects include lengthening overall trailer length
capacity on sites, improving electrical hookups from 30 amp to 50 amp,
upgrading the maintenance yard by resurfacing the lot and building a
garage/workshop building, rebuild a restroom complex, and build extensions
onto the Reservations and Accounting office.
<PAGE> 10 of 41
Further, the Company plans to replace its emergency generator, and complete
its management information system upgrades and reservation computer system
by the end of the First Quarter of Fiscal Year 1998. The Company estimates
these plans will cost approximately $290,000 and can be funded from cash
from operations. The Company also expects that an additional storage lot
may be purchased or leased with improvements to be approximately $350,000.
It is anticipated that funding this project will come partially from
operating revenues and partially from new financing.
FINANCIAL CONDITION
The business of the Company is seasonal and is concentrated on prime days
of the year which are defined as follows: Washington's birthday, Easter
week, Memorial Day weekend, summer vacation months, Labor Day, Thanksgiving
weekend, and Christmas vacation. There are no known trends which affect
business or affect revenue.
During the fiscal year ended September 30, 1997, there were several events
which impacted the reporting period's profits which were of a short term
duration, and were either non-repetitive or corrected by remedial actions
in the operations of the Company.
The Company develops its income from two sources: (a) Resort Operations,
consisting of revenues generated from RV site rentals, from RV storage
space operations, and from lease revenues from restaurant, laundry, and
arcade operations by third party lessees; and (b) Retail Operations,
consisting of revenues from general store operations and from RV parts and
service operations.
A major impact on the financial condition of Fiscal Year 1996, was the
Company's reconstruction of the storm water drainage outfall caused by
storm damage suffered March 10, 1995. The $422,719 cost of this project
required the review and modification to the Company's business and
operational plans during the fiscal year ending 1996. This impact included
the delay of proposed capital expenditures, such as deferring site
enhancement on the north side of the Resort, which was completed in Fiscal
Year 1997, and deferring the rebuilding of a restroom complex to Fiscal
Year 1998.
The Company completed its plan to aggressively reduce debt by eliminating,
by early payoff, all outstanding loan balances. The Company continues its
policy to adopt conservative budgets with managed capital outlays.
<PAGE> 11 of 41
The Company has arranged a $150,000 line of credit that has not been drawn
on to date. The Company has no other liabilities to creditors other than
current accounts payable arising from its normal day-to-day operations and
advance Resort rental reservation deposits, none of which are in arrears.
LIQUIDITY
The Company's policy is to use its ability to generate operating cash flow
to meet its expected future needs for internal growth. The Company has
continued to maintain sufficient cash so as to not require the use of a
short term line of credit during the off-season period, and the Company
expects to be able to do so (although no assurance of continued cash flow
can be given).
Net cash provided by operating activities, including proceeds of a
certificate of deposit converted to cash in 1995, totaled $444,213 in 1997,
compared to $577,120 in 1996, and $477,831 in 1995. Cash on hand for
period in 1997 decreased over the period ended 1996 by $107,174, and over
the period ended 1995 by $119,004. These decreases are primarily a result
of early payoff of long term debt, rebuilding the storm water outfall
structure, marketing a reduced discount rate, and pricing concepts. The
fluctuation of cash position in Fiscal Years 1997, 1996, and 1995 are a
result of deferring selected capital projects. The capital projects that
were deferred will not detrimentally affect current business and were moved
to the next out year. Future capital expenditures are expected to be
funded through normal operating cash flows.
In 1997, cash investments of $327,660 included the enhancement of 123
sites, street lights, a new trailer moving vehicle, maintenance equipment,
computer systems, renovation of square public areas, and research into
permits and plans for a new storage lot. The major capital expenditures
during 1996 consisted of $502,514 to rebuild the storm water outfall
structure due to storm damage, renovation of restaurant kitchen, site
enhancements, playground equipment, computer software, awnings, street
sweeper, maintenance cart, and clubhouse furniture. Major capital
expenditures during 1995 consisted of $212,540 for site enhancements,
installation of night/safety lights, road repair, painting of buildings,
computer hardware and clubhouse furniture. Site enhancements have involved
installation of landscaping, road improvements, sidewalks and crushed
granite as a parking base. These site improvements have assisted
management in raising the average paid rate from $23.61 in 1994, to an
average of $27.45 in 1997.
<PAGE> 12 of 41
The Company has continued to maintain sufficient cash from operations to
not require the addition of long term debt during 1997 or 1996. With the
possibility of requiring additional funds for planned capital improvements
and winter season, the Company established a $150,000 Line of Credit to
insure funds will be available if required. In anticipation of future
large projects, the Board of Directors have instructed management to build
operational cash balances.
Fiscal Year 1997's current ratio (current assets to current liabilities) of
1.88 increased from Fiscal Year 1996's current ratio of 1.76. The
increase in current ratio is the result of planned capital expenditures,
the elimination of current portion of long term debt, and prepayment of
income taxes at year end.
Working Capital decreased to $272,325 at the end of Fiscal Year 1997
compared with $289,613 at year end Fiscal Year 1996. These fluctuations are
a result of payoff of all long term debts, planned capital improvements,
development of cash reserves, and deferment of capital projects that have
not detrimentally affected current operations, and no required maintenance
has been deferred.
CAPITAL RESOURCES AND PLANNED EXPENDITURES
The Company plans capital expenditures of $290,000 in Fiscal Year 1997 to
renovate operational buildings, utility upgrades, restroom reconstruction,
upgrading of the computer systems, and continuing the enhancement of the
equipment and buildings in the maintenance area. Funding for these
projects is expected to be by revenue generated from the normal course of
business and is expected to increase the Resort's value to its stockholders
and the general public.
The Company is currently reviewing the RV storage market place to determine
the viability of leasing or purchasing of property sufficient to meet
anticipated needs. Total improvements to develop a storage facility is
anticipated to cost approximately $350,000 which is expected to be funded
through revenue from the normal course of business or issuance of new
financing.
<PAGE> 13 of 41
RESULTS OF OPERATIONS
YEAR TO YEAR COMPARISON
INCOME: Increased over the prior fiscal year ended September 30, 1996, by
$44,079, or 1.7%, and increased from fiscal year ended September 30, 1995,
by $208,095, or 8.6%.
INCOME BY SEGMENT
1997 1996 1995
OCCUPANCY
% of Stockholder Site Use 20.6% 20.8% 20.2%
% of Paid Site Rental 42.3% 42.1% 39.8%
% Total Site Occupancy 62.9% 63.0% 60.1%
% of Storage Rental 99.7% 94.0% 95.4%
Average Paid Site $27.45 $27.78 $27.97
RESORT OPERATIONS
Site Rental $1,695,109 $1,710,716 $1,621,027
Storage Operations $357,621 $319,280 $294,400
Support Operations $99,629 $94,258 $76,851
Total $2,152,360 $2,124,254 $1,992,278
RETAIL OPERATIONS
Store $290,184 $308,293 $291,616
RV Repair/Parts store $171,341 $137,583 $124,657
Total $461,525 $445,876 $416,273
INTEREST INCOME $15,246 $14,922 $12,485
TOTAL INCOME $2,629,131 $2,585,052 $2,421,036
<PAGE> 14 of 41
Occupancy rates on the above table are calculated based on the quantity
occupied as compared to the total sites available for occupancy (i.e. total
occupied to number of total available). Average paid site is based on site
revenue and paid sites. Resort support operations include revenues
received from the arcade, laundry, recreational activities, restaurant
lease, and other less significant sources.
1997 COMPARED WITH 1996
Resort operations income increased 1.3% due to a 0.5% increase in paid site
occupancy and a 6.1% increase in storage rental occupancy. Average paid
site rental decreased 1.2% as primarily a result of decreasing the fiscal
year's prime nights by 1.3%. Prime nights are charged a higher nightly
rate and are not discounted.
Retail operations income increased 3.5% from an 24.5% increase in RV Repair
/ Parts Store revenue and a decrease of 5.9% in General Store sales. These
large fluctuations are a result of managements continuing program to
increase RV Shop sales and the General Store's deficiency of supervisory
management that was resolved prior to year end.
Interest Income increased 2.2% as a result of carrying higher cash balances
through most of the year. Long term debt payoff occurred in the Fourth
Quarter and the Company expects to see reduced interest income over the
next several quarters due to reduced cash balances and increased capital
expenditures.
Operating Expenses increased $98,678, or 5.7%, as a result of increasing
maintenance staff, landscaping contract services, and associated projects
to improve the Resort's appearance and efficiency. The Board of Directors
have directed management to continue maintenance projects as needed to
provide a first class resort for campers using recreational vehicles.
Depreciation Expense increased 10.4% due to the mid-fiscal 1996 year
completion of the water outfall structure and the mid-fiscal 1997 year
completion of site renovation project.
Interest Expense decreased by 35.8% due to accelerated prepayments of
principal and debt payoff.
Loss on Disposal of Fixed Assets for 1997 of $92,191 represents the
reclassification of certain assets that were determined to no longer have a
useful life.
Income before provision for taxes on income of $103,820 is reflective of
the Company's current pricing policies and continuing efforts to maximize
resort services and value. This income is within management's plan of
operations.
<PAGE> 15 of 41
Net income decreased by $98,756, or 54.1%, primarily as a result of the
loss on disposal of fixed assets and the increase in operating expenses.
This is the eighth consecutive year of positive net income for the company.
1996 COMPARED WITH 1995
Resort Operations Income increase of 6.6% can be directly attributed to a
5.9% increase in paid site rental occupancy and an increase in fees charged
to place stored vehicles on site. In addition, elimination of special
promotional pricing and additional lot space rentals for recreational
vehicle storage also significantly contributed to increased revenues.
Average paid site decreased as a result of the increase in paid site
rentals during the off season, which is a lower rated period.
Retail operations increased 7.1%. The RV Repair and Parts operation's
growth is directly related to the growth of the storage operation, and the
increase in General Store revenues are a direct result of a 4.8% increase
in total occupancy during Fiscal Year 1996.
Interest Income increased 19.5% as a result of delaying planned capital
outlays during 1995 and 1996 to build cash reserves for replacement of the
1995 storm damaged outfall structure.
Operating expenses: Decreased 0.5%, that can be attributed directly to
expenses caused by a flood condition which occurred on March 10, 1995.
Interest expense: Decreased 24.2%, as a result of increased principal
payments, prepayment of principal, and reduced interest rates.
Income before provision for taxes: Indicated a profit of $279,576 for the
year ended September 30, 1996, compared to a profit of $146,287 for the
year ended September 30, 1995. These profits are reflective of the
Company's pricing policies, and continuing efforts to maximize Resort
services and increase capital expenditures.
RESTAURANT OPERATIONS: No longer a Company revenue center. It was closed
as a Company operation in October of 1992 and is currently being operated
as a leased facility. Currently, the Company expects to continue the
leasing out of this facility.
INFLATION has not had a significant impact on our profit position. Company
has increased rates which have more than compensated for the rate of
inflation.
<PAGE> 16 of 41
FUTURE OPERATING RESULTS could be unfavorably impacted to the extent that
changing prices result in lower discretionary income for customers and/or
increased transportation costs to the Resort. In addition, increasing
prices affects operations and liquidity by raising the replacement cost of
property and equipment.
ITEM 7 FINANCIAL STATEMENTS
<PAGE> 17 of 41
PAGE
Independent Auditors' Report 3
Balance Sheets September 30, 1997 and 1996 4
Statements of Operations and Changes in Retained Earnings
(Deficit) for the Years Ended
September 30, 1997, 1996 and 1995 5
Statements of Cash Flows for the Years
Ended September 30, 1997, 1996 and 1995 6
Notes to Financial Statements 7-13
<PAGE> 18 OF 41
INDEPENDENT AUDITORS' REPORT
Board of Directors
Pismo Coast Village, Inc.
Pismo Beach, California 93449
We have audited the accompanying balance sheets of Pismo Coast Village, Inc. as
of September 30, 1997 and 1996, and the related statements of operations and
changes in retained earnings (deficit) and cash flows for each of the three
years then ended September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pismo Coast Village, Inc. as
of September 30, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years then ended September 30, 1997, in conformity
with generally accepted accounting principles.
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
1150 Palm Street
San Luis Obispo, CA 93401
October 23, 1997
<PAGE> 19 of 41
PISMO COAST VILLAGE, INC.
BALANCE SHEETS
SEPTEMBER 30, 1997 AND 1996
1997 1996
ASSETS
Current Assets
Cash and cash equivalents $410,062 $517,236
Accounts receivable 8,467 6,122
Inventory 69,597 59,092
Current deferred taxes 19,000 25,000
Prepaid income taxes 24,551
Prepaid expenses 48,900 60,864
--------- ---------
Total current assets 580,577 668,314
Pismo Coast Village Recreational
Vehicle Resort and Related Assets -
Net of accumulated depreciation 5,569,029 5,643,793
Other Assets 6,619 12,979
--------- ---------
Total Assets $6,156,225 $6,325,086
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and
accrued liabilities $86,479 $67,123
Accrued salaries and vacation 37,394 35,115
Rental deposits 184,379 197,968
Income tax payable 45,000
Current portion of long-term debt 33,495
--------- ---------
Total current liabilities 308,252 378,701
Long-Term Liabilities
Long-term deferred taxes 74,000 66,000
Long-term debt 190,232
--------- ---------
Total liabilities 382,252 634,933
--------- ---------
Stockholders' Equity
Common stock - no par value, issued
and outstanding 1,800 shares 5,647,708 5,647,708
Retained earnings 126,265 42,445
--------- ---------
Total stockholders' equity 5,773,973 5,690,153
--------- ---------
Total Liabilities and Stockholders'
Equity $6,156,225 $6,325,086
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE> 20 OF 41
PISMO COAST VILLAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
1997 1996 1995
Income
Resort operations $2,152,360 $2,124,254 $1,992,278
Retail operations 461,525 445,876 416,273
Interest income 15,246 14,922 12,485
--------- --------- ---------
Total income 2,629,131 2,585,052 2,421,036
--------- --------- ---------
Costs and Expenses
Operating expenses 1,838,534 1,739,856 1,747,993
Cost of goods sold 264,928 255,060 235,817
Depreciation 310,233 281,062 252,447
Amortization 1,326 1,325 1,326
Interest expense 18,099 28,173 37,166
Loss on disposal of fixed assets 92,191
--------- --------- ---------
Total costs and expenses 2,525,311 2,305,476 2,274,749
--------- --------- ---------
Income Before Provision for
Taxes on Income 103,820 279,576 146,287
Provision for taxes on income 20,000 97,000 40,427
--------- --------- ---------
Net Income 83,820 182,576 105,860
Retained Earnings (Deficit)
Beginning of Year 42,445 (140,131) (245,991)
--------- --------- ---------
End of Year $126,265 $42,445 $(140,131)
========= ========= =========
Earnings Per Share $46.57 $101.43 $58.81
====== ====== ======
The accompanying notes are an integral part of these financial statements.
<PAGE> 21 OF 41
PISMO COAST VILLAGE, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
1997 1996 1995
Cash Flows From Operating Activities
Net income $83,820 $182,576 $105,860
------- ------- -------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 310,233 281,062 252,447
Amortization 1,326 1,325 1,326
Deferred income tax 14,000 40,293 28,689
Loss on disposal of fixed assets 92,191
Proceeds of certificates of deposit 50,000
(Increase) decrease in accounts receivable (2,345) 4,837 2,008
(Increase) decrease in inventory (10,505) 6,734 7,157
Increase in prepaid income taxes (24,551) (625)
Decrease in prepaid expenses 11,964 13,216 13,148
(Increase) decrease in other assets 5,034 (4,724) 3,126
Increase (decrease) in accounts payable
and accrued liabilities 19,356 (2,828) 16,961
Increase (decrease) in accrued salaries
and vacation payable 2,279 (2,541) (16,106)
Increase (decrease) in income
taxes payable (45,000) 38,502 6,498
Increase (decrease) in rental deposits (13,589) 18,668 7,342
------- ------- -------
Total adjustments 360,393 394,544 371,971
------- ------- -------
Net cash provided by operating activities 444,213 577,120 477,831
------- ------- -------
Cash Flows From Investing Activities
Capital expenditures (327,660) (502,514) (212,540)
------- ------- -------
Net cash used in investing activities (327,660) (502,514) (212,540)
------- ------- -------
Cash Flows From Financing Activities
Retirement of debt (223,727) (86,436) (88,295)
------- ------- -------
Net cash used in financing activities (223,727) (86,436) (88,295)
------- ------- -------
Net increase (decrease) in cash and
cash equivalents (107,174) (11,830) 176,996
Cash and Cash Equivalents at
Beginning of Year 517,236 529,066 352,070
------- ------- -------
Cash and Cash Equivalents at End of Year $410,062 $517,236 $529,066
======= ======= =======
Schedule of Payments of Interest and Taxes
Payments for interest $18,099 $28,173 $37,166
Payments for income tax $75,611 $18,318 $4,880
The accompanying notes are an integral part of these financial statements.
<PAGE> 22 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 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 $3,978 at
September 30, 1996, are included with other assets. Amortization is computed
using the straight-line method over seven years. The balance of other assets
at September 30, 1997 and 1996, represents deposits held by others of $6,619
and $7,665, respectively.
Investment Tax Credits
Investment tax credits are accounted for by the flow-through method.
Earnings Per Share
The earnings 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 statements 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> 23 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 2
Note 1 - Summary of Significant Accounting Policies (Continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Revenue and Cost Recognition
The Company's revenue is recognized on the accrual basis as earned based on
the date of stay. Expenditures are recorded on the accrual basis whereby
expenses are recorded when incurred, rather than when paid.
Note 2 - Pismo Coast Village Recreational Vehicle Resort and Related Assets
At September 30, 1997 and 1996, property and equipment, which are recorded
at cost, included the following:
1997 1996
Land $2,680,850 $2,680,850
Building and park improvements 5,564,088 5,521,908
Furniture, fixtures, equipment
and leasehold improvements 1,214,381 1,205,415
Transportation equipment 200,450 148,152
Construction in progress 15,890 147
--------- ---------
9,675,659 9,556,472
Less accumulated depreciation 4,106,630 3,912,679
--------- ---------
$5,569,029 $5,643,793
========= =========
Major additions in the year ended September 30, 1997, included facility
improvements and the purchase of a towing vehicle.
Note 3 - Long-Term Debt
Long-term debt at September 30, 1997 and 1996, is summarized as follows:
1996
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. $12,384
<PAGE> 24 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 3
Note 3 - Long-Term Debt (Continued)
1996
10.5% 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. $211,343
-------
223,727
Less current portion of long-term debt 33,495
-------
$190,232
=======
Total interest cost incurred was $18,099 and $28,173 for the years ended
September 30, 1997 and 1996, respectively.
Note 4 - 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, 1997. The purpose of the loan is to augment operating
cash needs in off season months. There were no outstanding amounts as of
September 30, 1997 or 1996.
Note 5 - 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 spot.
<PAGE> 25 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 4
Note 6 - Income Taxes
The provision for income taxes consists of the following components:
1997 1996 1995
Current:
Federal $ $62,000 $33,713
State 9,000 25,000 11,738
------ ------ ------
9,000 87,000 45,451
------ ------ ------
Deferred:
Federal 11,000 38,000 26,901
State 2,000 1,788
------ ------ ------
11,000 40,000 28,689
Tax benefit of net operating loss
carryforward:
Federal (30,000) (33,713)
------ ------ ------
$20,000 $97,000 $40,427
====== ====== ======
The deferred tax assets (liabilities) are comprised of the following:
1997 1996
Current Long-Term Current Long-Term
Deferred tax assets:
Federal $16,000 $ $23,000 $
State 3,000 2,000
Deferred tax liabilities:
Federal (53,000) (46,000)
State (21,000) (20,000)
------ ------ ------ ------
$19,000 $(74,000) $25,000 $(66,000)
====== ====== ====== ======
<PAGE> 26 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 5
Note 6 - Income Taxes (Continued)
The above deferred tax assets (liabilities) consist of the following
temporary differences:
1997 1996
Depreciation $(74,000) $(66,000)
------ ------
Total gross deferred
tax liabilities (74,000) (66,000)
------ ------
Federal tax credits 3,000
Vacation accrual 10,000 10,000
Miscellaneous 9,000 12,000
------ ------
Total gross deferred tax assets 19,000 25,000
------ ------
$(55,000) $(41,000)
====== ======
The effective income tax rate varies from the statutory federal income tax
rate as follows:
1997 1996 1995
Statutory federal income tax rate 34.0 % 34.0 % 34.0%
Increase (decreases):
State income taxes, net of
federal benefit 5.8 6.3 6.2
Effect of graduated tax rates (10.4) (5.1) (12.8)
Miscellaneous (.4) (.6) .2
---- ---- ----
Effective Income Tax Rate 29.1 % 34.6 % 27.6 %
==== ==== ====
<PAGE> 27 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 6
Note 7 - Operating Expenses
Operating expenses for the years ended September 30, 1997, 1996 and 1995,
consisted of the following:
1997 1996 1995
Direct labor $496,308 $450,450 $446,199
Administrative salaries 214,275 225,569 199,321
Contract labor 273 816 13,707
Insurance 146,028 148,302 179,259
Payroll tax expense 66,295 64,977 64,047
Employee travel and training 25,194 15,778 15,497
Property taxes 32,194 39,673 27,498
Taxes and licenses 4,713 4,367 4,725
Corporation expense 53,386 46,257 55,344
Advertising and promotion 45,447 50,583 31,219
Telephone 27,821 26,228 27,689
Security 63,983 62,295 62,950
Office supplies and expense 43,199 38,943 37,565
Custodial supplies 6,590 8,889 7,314
Recreational supplies 4,056 4,211 3,669
Professional services 25,580 24,413 33,142
Retail operating supplies 4,647 3,102 3,037
Repairs and maintenance 86,036 63,487 54,054
Contract services 140,676 125,713 123,128
Equipment lease 2,551 1,850 1,001
Utilities 210,270 194,691 193,380
Auto and truck expense 30,008 28,756 29,020
Rent - storage lots 61,020 59,769 55,766
Bad debts 18 1,277 238
Service charges 33,617 36,969 36,813
Storm damages 29,713
Uniforms 7,814 5,904 5,882
Miscellaneous 6,535 6,587 6,816
--------- --------- ---------
Total Operating Expenses $1,838,534 $1,739,856 $1,747,993
<PAGE> 28 OF 41
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997, 1996 AND 1995
PAGE 7
Note 8 - 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, 1997, for five years with an option to extend the lease
for an additional five years. Monthly lease payments are currently $2,208
and are increased annually based on the Consumer Price Index. Future minimum
lease payments under the second lease and an obligation to lease equipment
are as follows:
Year Ended September 30,
1998 $ 28,797
1999 28,797
2000 28,605
2001 26,493
2002 19,870
-------
Total $132,562
=======
Rent expense under these agreements was $27,712, $25,740 and $25,640 for the
years ended September 30, 1997, 1996 and 1995, respectively.
<PAGE> 29 OF 41
ITEM 8 CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Inapplicable.
PART III
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
(a) The Company's Directors were chosen at the Shareholder's Annual Meeting
on January 18, 1997. The Directors serve for one year, or until their
successors are elected. The names, ages, background and other information
concerning the Directors, including other offices held by the Directors
with the Company, are set forth below.
(b) The following is a list of the Company's Directors and Executive
Officers setting forth their functions and experience. There is no
familial relationship between the Directors nor between the Directors and
the Officers. There is no understanding or agreement under which the
Directors hold office.
HOWARD ALLARD, Director and Vice President - Administration
Howard Allard, age 72, resides at 5161 Diablo Drive, Sacramento, California
95842. He has a Master's degree in education administration from
California State University, Sacramento. He was an elementary school
principal in the Rio Linda Union School District for 29 years prior to
retirement in 1985. He has been a partner since 1978 in Allard Enterprises
which maintains rental properties, and he has also been a partner since
1982 in Allard Limousine. Mr. Allard has served on the Board for 17 years,
including three years as President, two years as Secretary, and is
currently serving as Vice President - Administration.
EMILY BARTON, Director
Emily Barton is 65 years old. She resides at 4008 Glenbrook Avenue,
Bakersfield, California 93306. She holds an inactive B-1 California
Contractors License and a supplemental Swimming Pool License C-53. She was
active in the building business for many years. She is still active in the
remodeling and rehabilitation of her properties. She has been in the
rental business for 30 years and is currently active in the rental
business. Her specialty is buying foreclosures. She holds an inactive
life and disability insurance license and is associated with Cross Town
Insurance Co. She is past president of B'nai B'rith Women Bakersfield
Chapter #69. Under her leadership, B'nai B'rith Women received many
community service awards. She has served on the Board for five years.
<PAGE> 30 of 41
DONALD BIANCHI, Director
Donald Bianchi is 74 years old. He resides at 3605 Belle Terrace,
Bakersfield, California 93309. He retired from the U.S. Air Force as a
Lieutenant Colonel in 1983 and served as president of The Retired Officers
Association in 1994. He was a traffic officer, pilot and accident follow-
up officer for the California Highway Patrol for 31 years until his
retirement in 1978. He served as vice president of the Kern Kiwanis and is
an active member of the Masonic Lodge. He is now a licensed state
investigator in private practice and monitor for California traffic
schools. He has served on the Board for 22 years.
KURT BRITTAIN, Director and Executive Vice President
Kurt Brittain is 67 years old and resides at 15890 La Porte Court, Morgan
Hill, California 95037. After his Marine Corps service, he was employed
for more than 33 years by Orange County, California, before his retirement
in 1986. His background includes public works, flood control and manager
of the county's harbors, beaches and parks system. He was in charge of
three harbors, seven beaches and more than 26 parks, three of which were
camping parks. He has completed extension courses in business
administration, management, recreation and real estate. He has served on
the Board for eight years; one year as Vice President of Administration,
one year as Vice President-Secretary, and is currently serving a fifth year
as Executive Vice President.
ALBERT BROWN, Director
Albert Brown is 74 years old. He resides at 22718 Lone Eagle Road, Apple
Valley, California 92308. He was employed at Hughes Aircraft for 20
years, from 1945 to 1965, TRW Systems for 3 1/2 years, from 1965 to 1968, and
Rohr Industry, Inc., for 11 1/2 years, from 1968 until retirement in 1979.
He worked his way up from being an assembler to a senior industrial
engineer, reporting directly to the manager of industrial engineering. He
has completed extensive continued education in the field of industrial
engineering at U.S.C. He is an instructor with the A.A.R.P. 55-Alive
Senior Driving Course. He has served on the Board of Directors for 12
years, including two years as Vice President - Administration.
HARRY BUCHAKLIAN, Director
Harry Buchaklian is 65 years old. He resides at 1361 E. Ticonderoga Drive,
Fresno California 93720. He has a B.A. degree from C.S.U.F. in industrial
arts, and a secondary level teaching credential in laboratory electronics
and small engine repair. His career has included employment as an
assistant manager with Western Auto Stores, electronics instructor at
Fresno Technical College and technical supervisor for Sears Roebuck. He
retired from Sears Roebuck in 1994. He has served on the Board for 13
accumulative years, including most recently from September 16, 1995, to
present.
<PAGE> 31 of 41
FRANK DRAKE, Director
Frank Drake is 56 years old. He resides at 9511 Birch Creek Court,
Bakersfield, California 93312. Mr. Drake has an A.A. degree from
Bakersfield College, and holds an administration of justice lifetime
vocational teaching credential from U.C.L.A. Mr. Drake retired after 20
years with the Kern County Sheriffs Department where he was commander of
detective, administration and jail facilities. Following his retirement
from the Sheriff's Department in 1988, he was employed as a safety
consultant with State Compensation Insurance Fund assisting clients in
complying with OSHA and other safety standards. He retired from this
position in December 1995. Mr. Drake has served on the Board for two
years.
NORMAN GOULD, Director
Norman Gould is 78 years old. He resides at 10597 Road 30, Madera,
California 93637. He has a B.A. in education and an M.A. in
administration. His occupation prior to retirement in 1986 was as the
superintendent of schools for Madera County. He was a member of the board
of directors of Kingsview, Inc., from 1968 to 1980 and held the positions
of vice chairman and chairman of the board. He is currently on the board
of directors of Valley Teen Ranch, Inc. Mr. Gould also serves as the
president on the board of directors for Camp Sugar Pine, Inc., a nonprofit
corporation. He has served on the Board for 19 accumulative years,
including most recently from March 20, 1993 to present, serving nine years
as President, one year as Treasurer and two years as Secretary.
EDWARD HINDS, JR., Director and Vice President - Secretary
Edward (Dee) Hinds, Jr., age 70, resides at 3416 West Magill Avenue,
Fresno, California 93711. He was employed by Bank of America serving as a
branch officer, vice president, manager and regional credit administrator
for more than 38 years prior to his retirement in 1988. He has served on
the Board for 17 years, and is currently serving a fifth year as Vice
President - Secretary.
TERRIS HUGHES, Director
Terris (Terry) Hughes, is 48 years old and resides at 2426 Sunset, Wasco,
California 93280. Mr. Hughes holds an A.A. degree from Bakersfield Junior
College in police science. He was employed by Cal Resources LLC for 23
years, from 1973 to 1997, holding the position of senior training
technician for the last 10 years, and is currently employed as a process
specialist for Aera Energy LLC, an oil industry company formed in 1997
between the Shell Oil and Mobil Oil Corporations. His duties include
providing safety and operational training to Aera Energy LLC employees.
Mr. Hughes has served on the Board for two years.
<PAGE> 32 of 41
LARRY KELLER, Director
Larry Keller, age 44, resides at 3807 Mesa Grande, Bakersfield California
93304. Mr. Keller founded and operated Nooner Food Service from 1979 until
1992, providing on-site food service of up to 13,000 meals per day at fire
camps for the U. S. Forest Service throughout 11 western states. He also
served as president, vice president and secretary/treasurer of the Western
Forest Fire Catering Association. Since 1992 Mr. Keller has been self-
employed at Presidio Business Center, a commercial real estate management
company he owns and manages. Mr. Keller has served on the Board for two
years.
RONALD NUNLIST, Director
Ronald Nunlist, age 59, resides at 1105 Minter Avenue, Shafter, California
93263. Mr. Nunlist has been employed in the oil business for many years.
From 1995 to June 1997 he was employed as an operations foreman by Cal
Resources LLC, an oil industry company owned by Mobil Oil Corporation.
Since June 1997, Mr. Nunlist has been employed by Aera Energy, an oil
industry company formed between the Shell Oil and Mobil Oil Corporations,
as a logistics specialist. He has served on the Board for 12 years,
including five years as President.
JERALD PETTIBONE, Director and President
Jerry Pettibone, age 71, resides at 4179 Court Drive, Santa Cruz,
California 95062. He sold and retired from his company, Pettibone Signs,
in Santa Cruz in October 1988. He started the company in 1960, which
operated statewide. Active in trade associations, he served on the board
of directors of the National Electric Sign Association, and on the board of
directors of the World Sign Association, serving as national president in
1985-1986. He served on the board of directors of the California Electric
Sign Association for 22 years and was recently elected a director emeritus.
Also active in Rotary Club, he is a charter member and past president of
the Capitola/Aptos Club. He has served Rotary as district governor of
district 5170 in 1983-1984. Mr. Pettibone has been a stockholder since
1979. He has served on the Board for five years, including three years as
Chief Financial Officer, and is currently serving as President.
RICHARD PROSCHOLD, Director
Richard Proschold, age 68, resides at 5717 Maywood Drive, Foresthill,
California 95631. Mr. Proschold worked his entire career in and for the
printing and communications industry. In 1969, he became President/CEO of
Graphic Arts Credit Union in Sacramento, California, which served the
families of the industry with their financial needs. At the time he took
the helm, the credit union had 400 members. In 1989, he completed a merger
of Graphic Arts Credit Union and its 5,000 active members into S.A.F.E.
Federal Credit Union, also in Sacramento, to benefit the membership with
more expanded services. Mr. Proschold remained with S.A.F.E. until 1992
when he retired, and has since enjoyed traveling. Mr. Proschold has served
on the Board for one year.
<PAGE> 33 of 41
THOMAS ROURKE, Director
Thomas Rourke is 60 years old. He resides at 899 Stagi Lane, Los Altos,
California 94024. Mr. Rourke graduated from the University of
Massachusetts in 1965 with a B.B.A. degree. He was vice president of
operations at Lynch Communications, Inc., in Reno, Nevada from 1980-1982,
and president of Lynch Circuits, Inc., in Sunnyvale, California from 1982-
1987. He is currently president and chairman of the board of Startech
Electronics, Inc., a company that produces printed circuit boards and other
electronic products, in Mountain View, California, a position he has held
since 1988. Mr. Rourke has served on the board for two years.
HENRY VALENTIA, Director
Henry Valentia is 72 years old. He resides at 2007 Cardinal Way,
Fairfield, California 94533. He retired from the U.S. Air Force as a
Lieutenant Colonel in 1969. He has a degree in industrial management and
an A.A. in business administration. Mr. Valentia also retired from Chevron
Corporation as a safety engineer in 1984. From June 1979 to June 1984 he
served on the board of directors at Travis Air Force Base Credit Union on
its finance committee. Mr. Valentia has also served two years as treasurer
on the board of directors for Lawrence Welk Desert Oasis, Palm Springs,
California. He has served on the Board for 11 years, including two years
as Vice President - Administration.
JACK WILLIAMS, Director, Vice President - Finance, and Chief Financial
Officer
Jack Williams is 47 years old. He resides at 7801 Revelstoke Way,
Bakersfield, California 93309. Mr. Williams graduated from San Diego
State University in 1974 with a B.S. in accounting. Following that, he has
been employed in the field of accounting in a variety of industries,
including agriculture, construction, heavy equipment sales, and
manufacturing. Mr. Williams established his own C.P.A. practice in 1983.
He is currently employed by Monterey Resources, a subsidiary of Texaco Oil
Corporation, in the Bakersfield area. He has served on the Board of
Directors for three years, and is currently serving as Chief Financial
Officer.
CHARLES ZAHKA, Director
Charles Zahka, age 71, resides at 6300 Alonzo Avenue, Encino, California
91316. He retired as vice president of the Broadway Department Stores in
1990 after 20 years. He presently serves as a private management
consultant. Mr. Zahka is president of the Stroke Association of Southern
California and vice chairman of the Better Business Bureau of the
Southland. He has served on the Board for nine years, as Secretary for one
year and as President for one year.
<PAGE> 34 of 41
Other Officers and Key Employees:
JAY JAMISON, Assistant Corporate Secretary and General Manager
Jay Jamison, 44 years old, has been employed by the Company since June 1997
as General Manager and serves as Assistant Corporate Secretary. He resides
at 17105 Oak Road, Atascadero, California 93422. He has a B.S. degree in
agricultural management from Cal Poly San Luis Obispo, graduating in 1976.
Mr. Jamison was raised on his family's guest ranch, Rancho Oso, in Santa
Barbara County, which included a recreational vehicle park, resident summer
camp, equestrian facilities and numerous resort amenities. He worked on
the ranch throughout his childhood and after college. The family business
was sold in 1983 at which time Mr. Jamison was hired by Thousand Trails,
Inc., a private membership resort as a Resort Operations Manager. His last
ten years at Thousand Trails were spent managing a 200-acre, 518 site,
full-service resort located near Hollister, California. He also managed
resorts in Acton and Idyllwild in Southern California. Prior to his
employment with the Company, Mr. Jamison managed Sugarloaf Marina and
Resort on Lake Shasta in Northern California from 1995 to 1997. He is
active in the Resort and Commercial Recreation Association and is also a
member of the American Quarter Horse Association.
ROGER C. LYON, JR., Assistant Corporate Secretary and General Counsel
Roger C. Lyon, Jr., is a practicing attorney in the State of California and
owns his law firm, Roger C. Lyon, Jr., A Law Corporation. His business
address is 1104 Palm Street, Post Office Box 922, San Luis Obispo,
California 93406. Mr. Lyon has acted as outside general counsel to the
Corporation since 1984.
FURTHER INFORMATION CONCERNING EXECUTIVE OFFICERS AND DIRECTORS
To the knowledge of the Company, none of the officers or directors have
been personally involved in any bankruptcy or insolvency proceedings. To
the knowledge of the Company, none of the directors or officers have been
convicted in any criminal proceedings (excluding traffic violations and
other minor offenses) or are the subject of a criminal proceeding which is
presently pending, nor have such persons been the subject of any order,
judgment, or decree of any court of competent jurisdiction, permanently or
temporarily enjoining them from acting as an investment advisor,
underwriter, broker or dealer in securities, or as an affiliated person,
director or insurance company, or from engaging in or continuing in any
conduct or practice in connection with any such activity or in connection
with the purchase or sale of any security, nor were any of such persons the
subject of a federal or state authority barring or suspending, for more
than 60 days, the right of such person to be engaged in any such activity,
which order has not been reversed or suspended.
<PAGE> 35 of 41
ITEM 10 EXECUTIVE COMPENSATION
No Officer or Director was paid more than $100,000 during the past fiscal
year.
REMUNERATION OF DIRECTORS
The directors received no cash remuneration for their service. However,
the directors are entitled to mileage reimbursement for travel to and from
meetings upon request. In addition, they are entitled to use of the Resort
for attending meetings and are provided with food and refreshments in
connection with Board Meetings. The aggregate value of the foregoing
during the fiscal year ended September 30, 1997, was estimated at
$21,992.33.
OPTIONS, WARRANTS OR RIGHTS
The Company has no outstanding options, warrants or rights to purchase any
of its securities.
INDEBTEDNESS OF MANAGEMENT
No member of management was indebted to the Company during its last fiscal
year.
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS MANAGEMENT
(a) No person owns beneficially of record more than 5% of the Company's
securities.
SECURITY OWNERSHIP OF MANAGEMENT
(b) The following sets forth the securities beneficially owned, directly,
by all directors and officers as a group as of September 30, 1997:
Amount of Percent
Board Member Title of Class Ownership of Class
Howard Allard Common Stock 1 Share 0.056%
5161 Diablo Ave
Sacramento CA 95842
Emily Barton Common Stock 2 Shares 0.111%
4008 Glenbrook Ave
Bakersfield CA 93306
<PAGE> 36 of 41
Amount of Percent
Board Member Title of Class Ownership of Class
Donald Bianchi Common Stock 2 Shares 0.111%
3605 Belle Terrace
Bakersfield CA 93309
Kurt Brittain Common Stock 2 Shares 0.111%
15890 La Porte Ct
Morgan Hill CA 95037
Albert Brown Common Stock 2 Shares 0.111%
22718 Lone Eagle Rd
Apple Valley CA 92308
Harry Buchaklian Common Stock 1 Share 0.056%
1361 E Ticonderoga Dr
Fresno, CA 93720
Frank Drake Common Stock 1 Share 0.056%
9511 Birch Creek Ct
Bakersfield CA 93312
Norman Gould Common Stock 1 Share 0.056%
10597 Road 30
Madera CA 93637
Edward Hinds, Jr. Common Stock 1 Share 0.056%
3416 W Magill Ave
Fresno CA 93711
Terris Hughes Common Stock 1 Share 0.056%
2426 Sunset
Wasco CA 93280
Larry Keller Common Stock 1 Share 0.056%
3807 Mesa Grande
Bakersfield CA 93304
Ronald Nunlist Common Stock 4 Shares 0.222%
1105 Minter Ave
Shafter CA 93263
Jerald Pettibone Common Stock 1 Share 0.056%
4179 Court Dr
Santa Cruz CA 95062
Richard Proschold Common Stock 1 Share 0.056%
5717 Maywood Dr
Foresthill CA 95631-9636
Thomas Rourke Common Stock 2 Shares 0.111%
899 Stagi Ln
Los Altos CA 94024
<PAGE> 37 of 41
Amount of Percent
Board Member Title of Class Ownership of Class
Henry Valentia Common Stock 3 Shares 0.167%
2007 Cardinal Way
Fairfield CA 94533
Jack Williams Common Stock 1 Share 0.056%
7801 Revelstoke Way
Bakersfield CA 93309
Charles Zahka Common Stock 2 Shares 0.111%
6300 Alonzo Way
Encino CA 91316
All Officers and
Directors as a Group Common Stock 29 Shares 1.611%
All such shares are owned beneficially and of record, there are no
additional shares known to the Company for which the listed beneficial
owner has the right to acquire beneficial ownership as specified in Rule
13D-3(d)(1) of the Exchange Act.
CHANGES IN CONTROL
Not applicable
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no transactions between the Company and any member of
management, director, officer, any 5% shareholder, promoter or family
member of the foregoing, either during the last two years or proposed.
PART IV
ITEM 13 EXHIBITS AND REPORTS ON FORM 8-K
(a.) Documents Filed as Part of the Report:
Independent Auditor's Report
Balance Sheets as of September 30, 1997 and 1996
Statements of Operations and Changes in Retained Earnings
(Deficit) for the years ended September 30, 1997, 1996 and 1995
<PAGE> 38 of 41
Statements of Cash Flows for the years ended September 30, 1997,
1996 and 1995
Notes to Financial Statements
Supporting Schedules:
XIII. Capital Shares as of September 30, 1997 and 1996.
(b.) Reports on Form 8-K: None have been filed during the last quarter
of the period covered by this report.
(c.) Exhibit/Index:
Sequential
Exhibit Number Item Description Page Number
24 Consent of Accountants 19
27 Financial Data Schedule *
* Filed electronically only
<PAGE> 39 of 41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PISMO COAST VILLAGE, INC.
By: /s/ Jerald Pettibone Date: December 12, 1997
Jerald Pettibone, President
and Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the Company and in the capacities and on the dates indicated.
By: /s/ Allan Bristol Date: December 12, 1997
Allan Bristol, Comptroller
and Principal Accounting Officer
By: /s/ Jerald Pettibone Date: December 12, 1997
Jerald Pettibone, President
and Chairman of the Board
By: /s/ Kurt Brittain Date: December 12, 1997
Kurt Brittain, Executive Vice President
and Director
By: /s/ Edward Hinds, Jr. Date: December 12, 1997
Edward Hinds, Jr., Vice President - Secretary
and Director
By: /s/ Jack Williams Date: December 16, 1997
Jack Williams, Chief Financial Officer,
Vice President - Finance and Director
By: /s/ Howard Allard Date: December 12, 1997
Howard Allard, Vice President - Administration
and Director
By: /s/ Emily Barton Date: December 17, 1997
Emily Barton, Director
By: /s/ Donald Bianchi Date: December 13, 1997
Donald J. Bianchi, Director
By: /s/ Albert Brown Date: December 12, 1997
Albert Brown, Director
By: /s/ Harry Buchaklian Date: December 12, 1997
Harry Buchaklian, Director
<PAGE> 40 of 41
By: /s/ Frank Drake Date: December , 1997
Frank Drake, Director
By: /s/ Norman Gould Date: December 13, 1997
Norman Gould, Director
By: /s/ Terris Hughes Date: December 13, 1997
Terris Hughes, Director
By: /s/ Larry Keller Date: December 12, 1997
Larry Keller, Director
By: /s/ Ronald Nunlist Date: December 12, 1997
Ronald Nunlist, Director
By: /s/ Richard Proschold Date: December 13, 1997
Richard Proschold, Director
By: /s/ Thomas Rourke Date: December 18, 1997
Thomas Rourke, Director
By: /s/ Henry Valentia Date: December 15, 1997
Henry Valentia, Director
By: /s/ Charles Zahka Date: December 12, 1997
Charles Zahka, Director
10ksb97.txt
<PAGE> 41 of 41
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Pismo Coast Village, Inc., for the annual period eneded
September 30, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 410,062
<SECURITIES> 0
<RECEIVABLES> 8,467
<ALLOWANCES> 0
<INVENTORY> 69,597
<CURRENT-ASSETS> 580,577
<PP&E> 9,675,659
<DEPRECIATION> 4,106,630
<TOTAL-ASSETS> 6,156,225
<CURRENT-LIABILITIES> 308,252
<BONDS> 0
0
0
<COMMON> 5,647,708
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,156,225
<SALES> 461,525
<TOTAL-REVENUES> 2,629,131
<CGS> 264,928
<TOTAL-COSTS> 1,838,534
<OTHER-EXPENSES> 93,517
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,099
<INCOME-PRETAX> 103,820
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83,820
<EPS-PRIMARY> 46.57
<EPS-DILUTED> 46.57
</TABLE>
