QUARTERLY REPORT FOR SMALL BUSINESS
ISSUERS
SUBJECT TO THE 1934 ACT REPORTING REQUIREMENTS
FORM 10-QSB
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(MARK ONE)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ]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.
incorporation or organization) number)
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 ___
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
-1800-
PART I
Financial Information
ITEM 1 - FINANCIAL STATEMENTS
The following financial statements and related information are
included in this Form 10-QSB Quarterly Report.
1. Accountant's Review Report
2. Balance Sheets
3. Statement of Operations and Retained Earnings (Deficit)
4. Statement of Cash Flows
5. Notes to Financial Statements (Unaudited)
The financial information included in Part 1 of this Form 10-QSB
has been reviewed by Glenn, Burdette, Phillips and Bryson, the
Company's Certified Public Accountants, and all adjustments and
disclosures proposed by said firm have been reflected in the data
presented. The information furnished reflects all adjustments
which, in the opinion of management, are necessary to a fair
statement of the results for the interim periods.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
STATEMENT ON FORWARD-LOOKING INFORMATION
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 significantlyaffect
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.
RESULTS OF OPERATIONS
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 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. Resort Operations Income for the three-month period
ended June 30, 2000, increased $49,323, or 8.0%, from the same
period in 1999. Retail Operations Income increased $31,967,
or 24.2%, for the same quarter. The increase in Resort
Operations is a result of higher occupancy due to favorable
weather conditions compared to the previous year. For the
nine-month period ending June 30, 2000, Resort Operations
increased $76,469, or 5.2%, from the same period in 1999.
Retail Operations increased $20,933, or 6.3%, from the same
nine-month period in 1999. The increase in Resort Operations
Income for the nine-month period is a result of an 8% increase
in paid site occupancy during this period. Also reflected is
the increase in RV storage revenue as a result of developing
additional RV storage property which opened October of 1999.
Seasonal fluctuations within this industry are expected, and
management projects that income for the fourth quarter will be
approximately 40% of its annual revenue. This approximation
is based on historical information.
Operating Expenses for the quarter ended June 30, 2000,
increased $11,293, or 2.4%, from the same period in 1999.
This increase in expense is a result of higher utilities
from increased occupancy and necessary operational expenses
to prepare for the Spring and Summer seasons. Operating Expenses
for the nine-month period ended June 30, 2000, increased $83,938,
or 6.2%, from the same period in 1999. This is primarily
reflecting aggressive maintenance expenses necessary to
operate a quality resort that is 28 years old. In addition,
this increase reflects the interest on the note acquired as
a result of developing the new RV storage property.
Cost of Goods Sold for 2000 are within projected levels at
59.3% for the quarter and 58.6% year-to-date. Cost of Goods
Sold for 1999 were 57.7% and 56.4% respectively.
Interest Expense for the three-month period ended June 30,
2000, is $6,216 compared to $8,125 for the same period in
1999. Interest Expense for the nine months ending June 30,
2000, is $23,330 compared to $16,781 for the same period in
1999. This interest expense reflects the purchase of an RV
storage property which became a Company asset on December 31,
1998. Subsequent to the period ending June 30, 2000, the
Board elected to pay off the note pertaining to the storage
property. This note was paid in full on July 17, 2000. The
Company has increased its available line of credit to $500,000.
Further details regarding financing are found in the Liquidity
section below.
Net Income for the quarter ending June 30, 2000, increased by
$26,265, or 41.0%, as compared with the same period ending June
30, 1999. Net income for the nine months ending June 30, 2000,
decreased by $4,933 to a figure of $3,743, compared with the
same period ending June 30, 1999. The last quarter of 2000
is expected to provide adequate resources for continuing
business and provide for planned capital expenditures. Of
the last nine years, with each year-end being profitable, the
Company has shown losses from $42,475 to $229,759 as of the
end of the first nine months. Losses during this period
are consistent with the seasonal occupancy of a tourist-
oriented business.
Published occupancy rates for resort operations have remained
consistent for the past three years. These rates are formally
reviewed annually by the Board of Directors and were last
changed in October 1994. Upon review of occupancy and
competition, in May of 2000, the Board of Directors elected
to increase site fees beginning January 1, 2001. As
previously reported, the Board voted to increase RV storage,
towing, and set-up fees effective October 1, 1998. Management
has introduced various marketing promotions with reduced rates
to increase revenues during low occupancy periods. During the
past four years, the Company has seen some of its fixed and
variable costs increase and decrease, and up to this year had
not seen any significant trend to warrant an increase in
rates. However, due to the nature of business and economic
cycles and trends, rates may be adjusted accordingly, if
deemed necessary. Although the supply-demand balance generally
remains favorable, future operating results could beadversely
impacted by weak demand. This condition could limit the
Company's ability to pass through inflationary increases in
operating costs as higher rates. Increases in transportation
and fuel costs or sustained recessionary periods could also
unfavorably impact future results. However, the Company believes
that its financial strength and market presence will enable it
to remain extremely competitive.
LIQUIDITY
The Company's plan for capital expenditures of $332,000 in Fiscal
Year 2000 is currently on schedule. The installation of a new
phone system, road repairs, water system improvements, and the
purchase of new garbage dumpsters have been completed. The
construction of a new restroom may be delayed into Fiscal Year
2001 due to factors pertaining to the permit process. Funding
for these projects is expected to be from revenue generated
from the normal course of business. The Company's current
cash position as of June 30, 2000, is $1,228,585 which is 18.2%
more than the same position in 1999. This cash position is a
result of an increase in rental deposits, and anticipation
of large capital and maintenance expenditures.
Capital projects are designed to enhance the marketability of
the camping sites and enhance support facilities. Recognizing
the age of the Resort and increased demands resulting from modern
recreational vehicles, the Board has commissioned an engineer
to provide plans to update and improve accommodations of the
Resort. Future renovation would include new utilities, larger
sites, improved site access, and additional amenities.
Accounts Payable and accrued liabilities decreased $83,918 to
an amount of $20,864 for June 30, 2000, compared to the same
period ending 1999. All undisputed payables have been paid
in full according to the Company's policy.
The Company has consistently demonstrated an ability to
optimize revenues developed from Resort and Retail Operations
during the summer season. During other less-revenue producing
periods, RV storage space and site rentals are paid for in
advance and used for Resort improvements and cash reserves. The
Company has a revolving line of credit for $500,000 to augment
operating or capital expenditure cash needs during off season
periods. The Company considers its financial position sufficient
to meet its anticipated future financial requirements. The
foregoing information is forward-looking, based upon certain
assumptions of future Performance which may not come to fruition.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Not Applicable
ITEM 2 - CHANGES IN SECURITIES
Not Applicable
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
Not Applicable
ITEM 5 - OTHER INFORMATION
Not Applicable
ITEM 6 - EXHIBITS AND REPORTS ON THE 8-K
(a) Exhibit Index:
Sequential
Exhibit Number Item Description Page Number
27 Financial Data Schedule
99 Accountant's Review Report
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: _________________________________
Signature:______________________________
Jerald Pettibone, President
Date: _________________________________
Signature:______________________________
Jack Williams, V.P. Finance /
Chief Financial Officer
Date: _________________________________
Signature:______________________________
Linda Davidson, Controller /
(Principal Accounting Officer)
ACCOUNTANTS' REVIEW REPORT
Board of Directors
Pismo Coast Village, Inc.
165 South Dolliver Street
Pismo Beach, California 93449
We have made a review of the balance sheets of Pismo Coast Village,
Inc. as of June 30, 2000 and 1999, and the related statements of
operations and retained earnings for the three month and nine month
periods ended June 30, 2000 and 1999, and the statements of cash
flows for the nine month periods ended June 30, 2000 and 1999, 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, 1999,
(presented herein) and the related statements of operations and
retained earnings and cash flows for the year then ended (not
presented herein); and in our report dated October 20, 1999,
we expressed an unqualified opinion on those financial statements.
Glenn, Burdette, Phillips & Bryson
Certified Public Accountants
A Professional Corporation
San Luis Obispo, California
July 18, 2000
PISMO COAST VILLAGE, INC.
BALANCE SHEETS
JUNE 30, 2000 AND 1999 AND SEPTEMBER 1999
<TABLE>
June 30, September 30, June 30,
2000 1999 1999
(Unaudited) (Audited) (Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $1,228,585 $1,007,428 $1,039,313
Accounts receivable 7,899 15,232 11,184
Inventory 70,620 66,678 76,729
Current deferred tax assets 30,000 32,000
Prepaid income taxes 116,250 9,050
Prepaid expenses 41,175 48,976 49,007
Total current assets 1,464,529 1,168,314 1,217,283
Pismo Coast Village Recreational
Vehicle Resort and Related Assets -
Net of accumulated depreciation
5,789,833 5,903,215 5,823,356
Other Assets 12,648 2,211 42,848
Total Assets $7,267,010 $7,073,740 $7,083,487
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accts payable & acc'd liabilities $20,864 $98,426 $104,782
Accrued salaries and vacation 37,968 61,966 33,755
Rental deposits 611,263 243,156 586,563
Income taxes payable 88,000
Current deferred tax liability 24,300
Current portion of long-term debt 7,945
Total current liabilities 702,340 491,548 725,100
Long-Term Liabilities
Long-term deferred taxes 122,700 91,000 72,000
Long-term debt, net of
current portion 342,035 395,000 395,000
Total liabilities 1,167,075 977,548 1,192,100
Stockholders' Equity
Common stock - no par value,
issued and outstanding
1,800 shares 5,647,708 5,647,708 5,647,708
Retained earnings 452,227 448,484 243,679
Total stockholders' equity 6,099,935 6,096,192 5,891,387
Total Liabilities &
Stockholders' Equity $7,267,010 $7,073,740 $7,083,487
</TABLE>
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
PISMO COAST VILLAGE, INC.
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
THREE AND NINE MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
Three Months Nine Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Income
Resort operations $664,784 $615,461 $1,554,276 $1,477,807
Retail operations 163,685 131,718 351,176 330,243
Interest income 8,518 6,512 23,296 17,416
Total income 836,987 753,691 1,928,748 1,825,466
Cost and Expenses
Operating expenses 480,202 468,909 1,439,547 1,355,609
Cost of goods sold 97,094 76,043 205,994 186,241
Depreciation 78,000 76,725 231,269 231,750
Interest 6,216 8,125 23,330 16,781
(Gain)/loss on sale of fixed assets (2,321) (135) 1,409
661,512 627,481 1,900,005 1,791,790
Income Before Provision
for Taxes 175,475 126,210 28,743 33,676
Income Tax Expense 85,000 62,000 25,000 25,000
Net Income $90,475 $64,210 3,743 8,676
Retained Earnings - Beginning of Period 448,484 235,003
Retained Earnings - End of Period $452,227 $243,679
Net Income Per Share $50.26 $35.67 $2.08 $4.82
</TABLE>
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
PISMO COAST VILLAGE, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<S> <C> <C> <C> <C>
2000 1999
Cash Flows From Operating Activities
Net income $3,743 $8,676
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation $231,269 $231,750
(Gain)/loss on sale of fixed assets (135) 1,409
Decrease in acccounts receivable 7,333 (689)
Increase in inventory (3,942) (10,006)
Decrease(increase) in deferred tax asset 30,000 (12,000)
Increase in prepaid income taxes (116,250) (9,050)
Decrease (increase) in prepaid expenses 7,801 (821)
Increase in other assets (10,437) 25,776
Decrease in accounts payable
and accrued expenses (77,562) (18,633)
Decrease in accrued salaries & vacation (23,998) (11,785)
Increase in rental deposits 368,107 371,858
Decrease in income taxes payable (88,000) (45,000)
Increase in current deferred tax liab 24,300
Increase in long-term deferred taxes 31,700
Total adjustments 380,186 522,809
Net cash provided by operating activities 383,929 531,485
Cash Flows From Investing Activities
Capital expenditures (117,887) (328,678)
Proceeds on sale of fixed assets 135 4,750
Net cash used in investing activities (117,752) (323,928)
Cash Flows From Financing Activities
Principal repayments on long-term debt (45,020)
Net cash used in financing activities (45,020)
Net increase in cash and
cash equivalents 221,157 207,557
Cash and Cash Equivalents - Beginning of Period 1,007,428 831,756
Cash and Cash Equivalents - End of Period $1,228,585 $1,039,313
Schedule of Payments of Interest and Taxes
Payments for interest $23,330 $16,781
Payments for income tax $116,250 $46,050
</TABLE>
See accountants' review report.
The accompanying notes are an integral part of these financial statements.
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2000 AND 1999 AND SEPTEMBER 30, 1999
Note 1 - Summary of Significant Accounting Policies
A. 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.
B. Inventory
Inventory has been valued at the lower of cost or market on
a first-in, first-out basis.
C. 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
D. Earnings Per Share
The earnings per share is based on the 1,800 shares issued
and outstanding.
E. 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 six months or less when purchased, to be cash
equivalents.
F. Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company
to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2000 AND 1999 AND SEPTEMBER 30, 1999
PAGE 2
Note 1 - Summary of Significant Accounting Policies
(Continued)
G. 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 June 30, 2000, September 30, 1999 and June 30, 1999, property
and equipment included the following:
<TABLE>
June 30, 2000 September 30, 1999 June 30, 1999
<S> <C> <C> <C>
Land $3,384,420 $3,208,618 $3,649,668
Building and resort
improvements 5,823,728 5,764,775 5,701,883
Furniture, fixtures,
equipment and
leasehold improvements 649,030 649,620 345,504
Transportation equipment 231,341 228,338 175,468
Construction in progress 14,284 144,387 33,068
10,102,803 9,995,738 9,905,591
Less: accumulated
depreciation (4,312,970) (4,092,523) (4,082,235)
$5,789,833 $5,903,215 $5,823,356
</TABLE>
Note 3 - Long-Term Debt
Long-term debt at June 30, 2000, is as follows:
8.25% Construction loan payable allowing for a two year
draw down period not to exceed $900,000. Payments were interest
only until May 2000, then principal and interest payments of
$3,198 with a balloon payment of $279,343 due on February 5,
2009. Secured by deed of trust on the storage lot at 300 South
Dolliver, land and improvements at 180 South Dolliver and a
storage lot known as parcel 061,171,006 and 061,671,007.
$349,980
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2000 AND 1999 AND SEPTEMBER 30, 1999
PAGE 3
Note 3 - Long-Term Debt (Continued)
Maturities of long-term debt are as follows:
Year Ended June 30,
2001 $7,945
2002 8,626
2003 9,365
2004 10,167
2005 11,039
Thereafter 302,838
$349,980
Total interest cost incurred was $23,330 for the nine months
ended June 30, 2000.
Note 4 - Operating Leases
The Company leases two pieces of property to use as storage
lots. One is leased under a cancelable month-to-month lease.
The other was entered into effective January 1, 1997, for
five years with an option to extend the lease for an additional
five years. Monthly lease payments are currently $2,272 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 June 30,
2001 $27,264
2002 27,264
$54,528
Rent expense under these agreements was $48,273 and $50,014 for
the nine months ended June 30, 2000 and 1999.
Note 5 - Line of Credit
The Company has a revolving line of credit for $500,000. The
interest rate is variable at one percent over prime, with an
initial rate of 8.75 percent expiring March 24, 2001. The
purpose of the loan is to augment operating cash needs in
off-season months. There were no outstanding amounts as of
June 30, 2000 and 1999 and September 30, 1999.
Note 6 - Common Stock
Each share of stock is intended to provide the shareholder
with a maximum 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.
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
AS OF JUNE 30, 2000 AND 1999 AND SEPTEMBER 30, 1999
PAGE 4
Note 6 - Common Stock (Continued)
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 7 - Income Taxes
The provision for income taxes is as follows:
June 30, 2000 June 30, 1999
Income tax expense $25,000 $25,000
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.
Note 8 - Employee Retirement Plans
The Company is the sponsor of a 401(k) profit sharing pension
plan, which covers substantially all full-time employees. Employer
contributions are discretionary and are determined on an
annual basis. The contribution to the pension was $8,760
and $5,619 for the nine months ended June 30, 2000 and 1999,
respectively and $9,095 for the year ended September 30, 1999.
Note 9 - Subsequent Event
On July 17, 2000, the Company paid in full the remaining
principal balance of its construction loan payable.
