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 December 31, 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 ___
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 _____
<PAGE> 1/16
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> 2/16
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. Accountants 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 December 31,
1996, decreased $16,523, or 4.0%, from the same period in 1995. These
decreases are a result of weather conditions and its impact on customer travel
for the three-month period ended December 31, 1995, with 12 days of rainfall
compared to the three-month period ended December 31, 1996, with 23 days of
rainfall. The marketing plan for the three-month period ended December 31,
1995, increased volume by offering a 50% off rate compared to a 25% off rate
for the three-month period ended December 31, 1996. RV storage revenue grew
to a 4.0% increase above the same three-month period last year ending on
December 31, 1995.
Income from retail operations decreased by $2,687, or 3.0%, for the three-month
period ended
<PAGE> 3/16
December 31, 1996, below the same period in 1995. This decrease is a result of
decreased resort occupancy on general store sales. In-house advertising of the
RV Repair Shop resulted in a small, 5.3% growth. The Company anticipates
continued moderate growth in both income from resort operations and in the
retail operations.
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 December 31, 1996,
increased $17,533 or 4.1%, above the same period ended December 31, 1995.
Operating costs remain consistent with the prior year and are considered
well-managed to create an effective operation. The Company has a spending plan
that is managed by expense item; each expense is assigned a percent of income
earned. Several weather related maintenance expenses incurred, none of which
by themselves were significant.
Cost of Goods Sold expenses for the three-month period ended December 31, 1996,
are 58.9% compared to 52.8% for the same period in 1995, which is well within
the guidelines established by management for the individual category sales of
RV supplies and General Store merchandise.
Interest expense for the three-month period ended December 31, 1996, was
reduced by $2,588, or 32.1%, below the same period in 1995. This reduction
is the result of the Board's decision to continue reducing the principal of one
of its loans by an additional $5,000 each month, and the continued normal
payments to principle.
Loss before provisions for taxes on income for the three-month period ended
December 31, 1996, increased by $49,581 below the period in 1995. This
increase of loss is a result of decreased Resort Income, managed expenses, and
an increase in depreciation expense for the outfall structure that was
completed in April of 1996. Losses during this period are directly attributed
to inclement weather during the months of October, November and December and
are consistent with seasonal occupancy of a tourist oriented business.
Liquidity
The Company plans capital expenditures of $530,000 in Fiscal Year 1996 to
renovate 123 camping sites, upgrade restroom buildings, purchase a trailer
moving vehicle, maintenance area improvements and upgrade of computer
information systems. The site renovation began January 1997 and consists of
sod, irrigation, electrical work, and installation of a granite base. Funding
for these projects will be by revenue generated from the normal course of
business. The Company's current cash position as of December 31, 1996, is
$409,579, which is 3.6% more than the same position in 1995. The Company has
taken steps to establish a $150,000 line of credit to insure funds will be
available if required. All loans are current and portions continue to be paid
in advance as planned.
The Company has consistently demonstrated an ability to optimize revenues
developed from resort and retail operations during the summer season. In
addition, RV storage space and site rentals are paid for in advance and are on
deposit during the winter season. These deposits of future revenues for
December 31, 1996, amounted to $31,047, or 24.7%, more then the deposit
<PAGE> 4/16
for December 31, 1995. This increase is a result of an increase in requesting
future advanced deposits and of the difference in the number of winter vacation
days that fall into January. These stay over days are collected in advance and
realized as revenue in January.
Expenditures are consistent with prior years' operations and are expected to
provide adequate resources to support the amounts committed to complete the
authorized capital projects during the fiscal year. Fourth quarter site
occupancy and storage fill are expected to be consistent with that of the past
year. Capital projects are designed to enhance the marketability of the camping
sites and support facilities. Renovation of the 123 camping sites is expected
to enhance the marketability of the sites during the summer season. Capital
projects not completed prior to our busy season will be completed after Labor
Day.
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
The annual meeting for the shareholders of Pismo Coast Village, Inc.,
was held on Saturday, January 18, 1997, at 9:00 a.m. at the South
County Regional Center, 800 West Branch Street, Arroyo Grande,
California 93420. At that meeting the following Directors were
elected to serve until the annual meeting in January 1998, or until
successors are elected and have qualified, and following each elected
Director's name is the total number of votes cast for that Director:
Allard, Howard 886
Barton, Emily 1,003
Bianchi, Donald 1,008
<PAGE> 5/16
Brittain, Kurt 845
Brown, Albert 1,158
Buchaklian, Harry 969
Drake, Frank 838
Gould, Norman 797
Hinds, Jr., Edward 882
Hughes, Terris 793
Keller, Larry 847
Nunlist, Ronald 989
Pettibone, Jerald 807
Proschold, Richard 856
Rourke, Thomas 899
Valentia, Henry 920
Williams, Jack 801
Zahka, Charles 819
Further, the following additional matters were voted upon at the meeting, and
the number of affirmative votes and negative votes cast with respect to each
such matter is set forth below:
(a) A proposal to approve the selection of Glenn, Burdette,
Phillips and Bryson to serve as independent certified public
accountants for the Company for the fiscal year 1997.
Affirmative Votes Negative Votes
790 2
ITEM 5 - OTHER INFORMATION
Not Applicable
ITEM 6 - EXHIBITS AND REPORTS ON FORM 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> 6/16
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:___________February 12, 1997___________
Signature:____________/s/___________________
Jerry Pettibone, President
Date:___________February 12, 1997___________
Signature:____________/s/___________________
Jack Williams, Principal Financial Officer
<PAGE> 7/16
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
December 31, 1996 and 1995, and the related statements of operations and
retained earnings (deficit) and cash flows for the three months then ended, 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, 1996, (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 17, 1996, we expressed an unqualified opinion on those financial
statements.
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
January 31, 1997
<PAGE> 8/16
PISMO COAST VILLAGE, INC.
BALANCE SHEETS
December 31, September 30, December 31,
1996 1995 1995
(Unaudited) (Audited) (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $409,579 $517,236 $395,517
Accounts receivable 5,980 6,122 14,251
Inventory 62,132 59,092 68,166
Current deferred taxes 39,000 25,000 37,966
Prepaid income taxes 0 100
Prepaid expenses 46,210 60,864 47,945
--------- -------- --------
Total current assets 562,901 668,314 563,945
Pismo Coast Village Recreational
Vehicle Resort and Related Assets -
Net of accumulated depreciation 5,573,807 5,643,793 5,434,677
Other Assets 10,593 12,979 7,924
--------- --------- ---------
Total Assets $6,147,301 $6,325,086 $6,006,546
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $49,703 $37,244 $40,929
Salaries payable 1,508 1,633 2,928
Vacation payable 33,482 33,482 28,456
Other accrued expenses 11,193 29,879 12,163
Rental deposits 156,564 197,968 125,517
Income tax payable 0 45,000 0
Current portion of long-term debt 35,983 33,495 25,733
--------- --------- ---------
Total current liabilities 288,433 378,701 235,726
Long-Term Liabilities
Long-term deferred taxes 68,000 66,000 27,790
Long-term debt 164,554 190,232 263,828
--------- --------- ---------
Total liabilities 520,987 634,933 527,344
--------- --------- ---------
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) (21,394) 42,445 (168,506)
--------- --------- ---------
Total stockholders' equity 5,626,314 5,690,153 5,479,202
--------- --------- ---------
Total Liabilities and Stockholders'
Equity $6,147,301 $6,325,086 $6,006,546
========= ========= =========
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
<PAGE> 9/16
PISMO COAST VILLAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
1996 1995
Income
Resort operations $401,126 $417,649
Retail operations 86,388 89,075
------- -------
Total income 487,514 506,724
------- -------
Cost and Expenses
Operating expenses 444,002 426,470
Cost of goods sold 50,875 46,989
Depreciation 75,681 64,141
Amortization 332 331
Interest 5,463 8,051
------- -------
576,353 545,982
------- -------
Loss Before Provision
for Taxes on Income (88,839) (39,258)
Income Tax Expense (Benefit) (25,000) (10,883)
------- -------
Net Loss (63,839) (28,375)
Retained Earnings (Deficit)
Beginning of period 42,445 (140,131)
------- -------
End of period ($21,394) ($168,506)
======= =======
Net Loss Per
Share ($35.47) ($15.76)
======= =======
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
<PAGE> 10/16
1996 1995
---- ----
Cash Flows From Operating Activities
Net loss ($63,839) ($28,375)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation $75,681 $64,141
Amortization 332 331
(Increase) Decrease in accounts
receivable and prepaid exp 14,796 (51,236)
Increase in current deferre (14,000) (15,342)
Decrease in prepaid income 0 73,979
Increase in inventory (3,040) (2,340)
Decrease in other assets 2,054 0
Increase in accounts payabl 12,459 3,133
Decrease in salaries payabl (125) (6,272)
Decrease in other accrued e (18,686) (19,992)
Decrease in income taxes pa (45,000) (6,498)
Increase in long-term defer 2,000 4,459
Decrease in rental deposits (41,404) (53,783)
------- -------
Total adjustments (14,933) (9,420)
------- -------
Net cash used by
operating activities (78,772) (37,795)
Cash Flows From Investing Activities
Capital expenditures (5,695) (75,152)
------- -------
Net cash used in investing
activities (5,695) (75,152)
Cash Flows From Financing Activities
Retirement of debt (23,190) (20,602)
------- -------
Net cash used in financing
activities (23,190) (20,602)
------- -------
Net decrease in cash and
cash equivalents (107,657) (133,549)
Cash and Cash Equivalents at Beginning
of Period 517,236 529,066
------- -------
Cash and Cash Equivalents at End of Period $409,579 $395,517
======= =======
Schedule of Payments of Interest and Taxes
Payments for interest $5,463 $8,051
Payments for income tax $31,931 $6,598
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
<PAGE> 11/16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1996 AND 1995 AND SEPTEMBER 30, 1996
Note 1 - Summary of Significant Accounting Policies
Nature of Business
Pismo Coast Village, Inc. (Company) is a recreational vehicle 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 resort 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 $4,310 at December 31,
1996, $2,984 at December 31, 1995, and $3,978 at September 30, 1996, are
included in other assets. Amortization is computed using the straight-line
method over seven years. The remaining balance of other assets represents
security deposits of $1,616 and amounts related to prepaid expenses on
insurance benefits for select employees of $3,995.
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.
<PAGE> 12/16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1996 AND 1995 AND SEPTEMBER 30, 1996
PAGE 2
Note 1 - Summary of Significant Accounting Policies (Continued)
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments including certificates of deposit with a maturity of three
months or less when purchased, to be cash equivalents.
Deferred Income Tax
Deferred income taxes resulted from a timing difference in recognizing
depreciation expense and net operating loss carryforwards.
Note 2 - Pismo Coast Village Recreational Vehicle Resort and Related Assets
At December 31, 1996, September 30, 1996 and December 31, 1995, property and
equipment included the following:
December 31, 1996 September 30, 1996 December 31, 1995
Land $2,680,850 $2,680,850 $2,680,850
Building and resort
improvements 5,523,351 5,521,908 5,021,690
Furniture, fixtures,
equipment and leasehold
improvements 1,208,255 1,205,415 1,197,457
Transportation
equipment 148,152 148,152 148,227
Construct
in progress 1,559 147 82,211
--------- --------- ---------
9,562,167 9,556,472 9,130,435
Less accumulated
depreciation 3,988,360 3,912,679 3,695,758
--------- --------- ---------
$5,573,807 $5,643,793 $5,434,677
========= ========= =========
<PAGE> 13/16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1996 AND 1995 AND SEPTEMBER 30, 1996
PAGE 3
Note 3 - Long-Term Debt
Long-term debt at December 31, 1996, September 30, 1996 and December 31, 1995,
is summarized as follows:
December 31,1996 September 30,1996 December 31,1995
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. $ 12,256 $12,384 $12,754
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. 188,281 211,343 276,807
------- ------- -------
200,537 223,727 289,561
Less current portion of
long-term debt 35,983 33,495 25,733
------- ------- -------
$164,554 $190,232 $263,828
======= ======= =======
Maturities of long-term debt are as follows:
Year Ended December 31, Amount
1997 $35,983
1998 39,452
1999 43,783
2000 71,769
2001 742
Thereafter 8,808
-------
Total $200,537
=======
<PAGE> 14/16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1996 AND 1995 AND SEPTEMBER 30, 1996
PAGE 4
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 renewed
effective January 1, 1997, for five years with an option to extend 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 December 31, Amount
1997 $25,920
1998 25,920
1999 25,920
2000 25,920
2001 25,920
-------
Total $129,600
=======
Rent expense under this agreement was $6,480 for the three months ended
December 31, 1996.
Note 5 - Common Stock
Each share of stock is intended to provide the shareholder with a minimum free
use of the resort 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.
Note 6 - Carryforwards Relating to Federal Income Taxes
The Company files its income tax returns as of September 30, the end of its
fiscal year.
At December 31, 1996, the Company has the following tax credits available to
offset future federal tax liabilities:
Approximate investment tax credits expiring as follows:
September 30, 2000 $2,501
September 30, 2001 356
<PAGE> 15/16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
DECEMBER 31, 1996 AND 1995 AND SEPTEMBER 30, 1996
PAGE 5
Note 7 - Income Taxes
The provision for income taxes is as follows:
December 31, December 31,
1996 1995
Income tax expense (benefit) $(25,000) $(10,883)
Effective September 30, 1993, the Company adopted Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS
109 requires, among other things, a change from the deferred to the
asset-liability method of computing deferred income taxes. SFAS 109 also
requires that if income is expected for the entire year, but there is a net
loss to date, a tax benefit is recognized based on the annual effective tax
rate.
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> 16/16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 409,579
<SECURITIES> 0
<RECEIVABLES> 5,980
<ALLOWANCES> 0
<INVENTORY> 62,132
<CURRENT-ASSETS> 562,901
<PP&E> 9,562,167
<DEPRECIATION> 3,988,360
<TOTAL-ASSETS> 6,147,301
<CURRENT-LIABILITIES> 288,433
<BONDS> 0
0
0
<COMMON> 5,647,708
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,147,301
<SALES> 86,388
<TOTAL-REVENUES> 487,514
<CGS> 50,875
<TOTAL-COSTS> 444,002
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,463
<INCOME-PRETAX> (88,839)
<INCOME-TAX> (25,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (63,839)
<EPS-PRIMARY> (35.47)
<EPS-DILUTED> (35.47)
</TABLE>
