SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________________ to _____________________
Commission File Number 0-8628
FOUR CORNERS FINANCIAL CORPORATION (as of April 12, 1988)
(Exact Name of Registrant as Specified in its Charter)
Delaware 22-2044086
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
370 East Avenue, Rochester, New York 14604
(Address of principal executive offices - Zip Code)
(716) 454-2263
(Registrant's Telephone Number, including Area Code)
80 West Main Street, Rochester, New York 14614
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 ____ No X
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
At August 7, 1995 there were 3,338,745 of the registrant's $.04 par value common
stock outstanding.
FOUR CORNERS FINANCIAL CORPORATION
INDEX
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of 1-2
June 30, 1995 (Unaudited) and
December 31, 1994
Consolidated Statements of Operations for the 3-4
Three Months and Six Months Ended June 30, 1995
and 1994 (Unaudited)
Consolidated Statements of Changes in 5
Stockholders' Investment for the
Six Months Ended June 30, 1995 and 1994
(Unaudited)
Consolidated Statements of Cash Flows for the 6
Six Months Ended June 30, 1995 and 1994
(Unaudited)
Notes to Condensed Consolidated Financial 7-13
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of 14-15
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Default Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of 16
Security Holders
Item 5. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURE 17
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
ASSETS
June 30, December 31,
1995 1994
----------- ------------
(Unaudited)
CURRENT ASSETS:
Cash and equivalents $ 51,730 $ 28,932
Cash - escrow deposits 95,387 70,633
Accounts receivable - trade, net of
allowance for doubtful accounts of $85,000
$100,000 in 1995 and 1994, respectively 536,691 478,094
Prepaid expenses 6,523 9,090
Other receivables 2,695 1,085
Income tax receivable -- 6,725
---------- ----------
Total current assets 693,026 594,559
---------- ----------
TITLE PLANT 367,283 367,283
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 266,627 305,358
---------- ----------
OTHER ASSETS:
Deposit 7,633 7,246
Cash value of life insurance 23,061 20,070
Intangible assets, net of accumulated
amortization 16,991 20,655
---------- ----------
47,685 47,971
---------- ----------
$1,374,621 $1,315,171
========== ==========
The accompanying notes are an integral part of these statements.
- 1 -
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
LIABILITIES AND STOCKHOLDERS' INVESTMENT
June 30, December 31,
1995 1994
---------- ----------
(Unaudited)
CURRENT LIABILITIES:
Line-of-credit $ 235,000 $ 235,000
Current portion of notes payable 197,915 240,078
Current portion of obligations under
capital leases 43,117 45,805
Accounts payable 567,613 455,866
Accounts payable - related parties 34,000 --
Escrow deposits 95,387 70,633
Other accrued expenses 33,683 63,639
---------- ----------
Total current liabilities 1,206,715 1,111,021
---------- ----------
LONG-TERM LIABILITIES:
Notes payable, net of current portion 6,724 12,604
Obligations under capital leases, net
of current portion 13,377 33,325
Due to officer/principal stockholder 215,000 200,000
---------- ----------
Total long-term liabilities 235,101 245,929
---------- ----------
Total liabilities 1,441,816 1,356,950
---------- ----------
STOCKHOLDERS' INVESTMENT:
Common stock, $.04 par value, 15,000,000
shares authorized, 3,338,802 issued and
outstanding in 1995 and 1994 133,752 133,752
Additional paid-in-capital 835,402 835,402
Accumulated deficit (1,030,724) (1,005,308)
---------- ----------
(61,570) (36,154)
Less: Treasury stock at cost (5,625) (5,625)
---------- ----------
Total stockholders' investment (67,195) (41,779)
---------- ----------
$1,374,621 $1,315,171
========== ==========
The accompanying notes are an integral part of these statements.
- 2 -
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
1995 1994
----------- -----------
(Unaudited) (Unaudited)
REVENUE:
Title insurance premiums $ 348,107 $ 573,707
Abstract and appraisal fees 604,897 820,774
---------- ----------
953,004 1,394,481
---------- ----------
DIRECT COSTS OF REVENUE:
Title insurance (109,088) (152,918)
Abstract and appraisal services (76,140) (177,652)
---------- ----------
(185,228) (330,570)
---------- ----------
Gross profit 767,776 1,063,911
OPERATING EXPENSES: (679,021) (1,212,038)
---------- ----------
Income/(loss) from operations 88,755 (148,127)
INTEREST, NET: (19,103) (16,709)
---------- ----------
NET INCOME/(LOSS) $ 69,652 $ (164,836)
========== ==========
NET INCOME/(LOSS) PER SHARE $ .02 $ (.05)
========== ==========
The accompanying notes are an integral part of these statements.
- 3-
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
1995 1994
----------- -----------
(Unaudited) (Unaudited)
REVENUE:
Title insurance premiums $ 696,567 $1,147,692
Abstract and appraisal fees 1,096,180 1,695,120
---------- ----------
1,792,747 2,842,812
DIRECT COSTS OF REVENUE:
Title insurance (223,390) (301,488)
Abstract and appraisal services (134,292) (331,301)
---------- ----------
(357,682) (632,789)
---------- ----------
Gross profit 1,435,065 2,210,023
OPERATING EXPENSES: (1,422,875) (2,428,996)
---------- ----------
Income/(loss) from operations 12,190 (218,973)
---------- ----------
INTEREST, NET: (37,606) (33,660)
---------- ----------
NET LOSS $ (25,416) $ (252,633)
========== ==========
NET LOSS PER SHARE $ (.01) $ (.08)
========== ==========
The accompanying notes are an integral part of these statements.
- 4-
<TABLE>
<CAPTION>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
--- Common Stock --- Additional Total
Paid-in- Accumulated Treasury Stockholders'
Shares Amount Capital Deficit Stock Investment
------ ------ ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1993 3,343,802 $ 133,752 $ 835,402 $ (536,278) $ (5,625) $ 427,251
Net loss for the six months
ended June 30, 1994
(Unaudited) -- -- -- (252,633) -- (252,633)
--------- --------- --------- ----------- ---------- ----------
BALANCE, June 30, 1994
(Unaudited) 3,343,802 $ 133,752 $ 835,402 $ (788,911) $ (5,625) $ 174,618
========= ========= ========= =========== ========== ==========
BALANCE, December 31, 1994 3,343,802 $ 133,752 $ 835,402 $(1,005,308) $ (5,625) $ (41,779)
Net loss for the six months
ended June 30, 1995
(Unaudited) -- -- -- (25,416) -- (25,416)
--------- --------- --------- ----------- ---------- ----------
BALANCE, June 30, 1995
(Unaudited) 3,343,802 $ 133,752 $ 835,402 $(1,030,724) $ (5,625) $ (67,195)
========= ========= ========= =========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
- 5 -
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
1995 1994
----------- -----------
(Unaudited) (Unaudited)
CASH FLOW OPERATING ACTIVITIES:
Net loss $ (25,416) $ (252,633)
Adjustments to reconcile net loss to
net cash flow from operating activities:
Depreciation and amortization 55,081 59,594
Decrease/(increase) in accounts receivable (58,597) 145,554
Decrease in other current assets 7,682 520
Increase in accounts payable 145,747 129,474
Decrease in other current liabilities (29,956) (42,799)
--------- ----------
Net cash flow from operating activities 94,541 39,710
--------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment,
net of disposals (12,686) (49,434)
Investment in cash value of life insurance (2,991) (16,860)
Increase in title plant -- (20,020)
Decrease/(increase) in deposit (387) 476
--------- ----------
Net cash flow from investing activities (16,064) (85,838)
--------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in notes payable, net (48,043) (51,335)
Increase (decrease) in obligations under
capital leases, net (22,636) 180
Increase in line-of-credit 15,000 45,000
--------- ----------
Net cash flow from financing activities (55,679) (6,155)
--------- ----------
NET (DECREASE)INCREASE IN CASH AND EQUIVALENTS: 22,798 (52,283)
CASH AND EQUIVALENTS - beginning of period 28,932 99,652
--------- ----------
CASH AND EQUIVALENTS - end of period $ 51,730 $ 47,369
========= ==========
The accompanying notes are an integral part of these statements.
- 6 -
FOUR CORNERS FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995 AND 1994
(Unaudited)
(1) General
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate in order that the
information presented is not misleading. All adjustments for a fair
presentation of financial information contained herein have been made.
(2) Organization
The Company -
Four Corners Financial Corporation (FCFC) and its Subsidiaries, Four
Corners Abstract Corporation (FCAC) and Proper Appraisal Specialists, Inc.
provide services and products including real estate title searching,
preparation of abstracts of title, issuance of title insurance as an agent
for certain national underwriting companies and real estate appraisals,
primarily in western and central New York State. All of these services
and products are required in connection with the mortgaging, sale or
purchase of real property.
Unless otherwise indicated, the term "Company" refers to Four Corners
Financial Corp. and its Subsidiaries. The Company operates in one
business segment.
(3) Summary of Significant Accounting Policies
Principles of Consolidation -
The consolidated financial statements include the accounts of FCFC and all
of its subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Cash and Equivalents -
Cash and equivalents include time deposits and other instruments with a
maturity of three months or less at the time of purchase. The Company
maintains cash balances at several banks. Accounts at each institution
are insured by The Federal Deposit Insurance Corporation up to $100,000.
- 7 -
(3) Summary of Significant Accounting Policies (Continued)
Property and Equipment -
Property and equipment is stated at cost and is depreciated using
accelerated and straight-line methods over the following useful lives:
Buildings 15 - 31.5 years
Furniture and Equipment 3 - 10 years
Vehicles 5 years
Leasehold Improvements Life of lease
At the time of retirement or other disposition of property, the cost and
accumulated depreciation are removed from the accounts and any gain or
loss is reflected in the statements of operations. Repairs and
maintenance costs are charged to expense when incurred.
Intangible Assets -
Intangible assets consist of goodwill and covenants not-to-compete
resulting from the 1987 acquisition of the Albany branch, the 1989
acquisition of Livingston Abstract Corporation, the 1990 acquisition of
Picciano Abstract Company, Inc. and the 1991 acquisition of Proper
Appraisal Specialists, Inc. The goodwill and covenants not-to-compete are
being amortized on a straight-line basis over a five-year period.
Title Plant -
Title plant consists of copies of public records, maps and other relevant
historical documents which facilitate the preparation of title abstract
reports without the necessity of manually searching official public
records.
The Company has incurred identifiable costs related to the activities
necessary to construct a title plant which are reflected as assets. A
title plant is regarded as a tangible asset having an indefinite economic
life; accordingly, title plant costs are not depreciated. Costs incurred
to perform full title search additions to the title plant are capitalized
in the year incurred. Costs incurred to maintain or update existing title
files in the title plant are expensed as incurred.
Revenue Recognition -
Title insurance is provided to purchasers or financiers of real property
purchases. The related revenue is recognized when policies become
effective, generally at the property or mortgage loan closing. Under
terms of the Company's agreements with its title insurance underwriters,
a commission of 15% to 20% is paid to its underwriter on all title
insurance policies written. Pricing is based on a rate schedule
established by the Insurance Department of the State of New York which
provides for varying rates for services rendered. Commission expense is
reflected as a direct cost of title insurance revenue in the statement of
operations.
- 8 -
(3) Summary of Significant Accounting Policies (Continued)
Revenue Recognition - (Continued)
The Company also performs title abstract research and prepares appraisals
on real properties. Abstract and appraisal revenue is recognized as
earned. Direct costs of abstract and appraisal revenue reflects the cost
of work performed by subcontractors in geographical areas where the
Company does not maintain an office, among other direct costs.
(4) Acquisitions
The Company acquired Proper Appraisal Specialists, Inc. (1991), Picciano
Abstract Company, Inc. (1990), Livingston Abstract Corporation (1989) and
Mid-State (1988) for cash, notes and common stock totalling approximately
$185,000. These acquisitions were accounted for as purchases. Goodwill,
representing the excess of purchase price over the fair value of tangible
assets acquired related to these acquisitions, totalled approximately
$66,000 and is being amortized over five years. These companies were
subsequently merged into FCAC.
(5) Income Taxes
During 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (SFAS 109), "Accounting for Income Taxes". SFAS 109
requires an asset and a liability approach to measuring deferred income
taxes. Previous standards required an income statement approach.
There were no material temporary differences at December 31, 1994 or at
June 30, 1995. Therefore, no deferred taxes have been provided.
At December 31, 1994, the Company has available a net operating loss
carry-forward of approximately $388,000, which begins to expire in 2002.
The Company has recorded a valuation allowance equal to the deferred tax
asset related to the carryforward.
(6) Escrow Deposits
As a service to its customers, FCAC administers escrow deposits
representing undisbursed amounts received for settlements of mortgage
loans or property sales and indemnities against specific title risks.
These funds, totalling $95,387 and $70,633 at June 30, 1995 and December
31, 1994, respectively, are recorded as both a current asset and a current
liability in the accompanying consolidated balance sheets.
- 9 -
(7) Notes Payable and Obligations Under Capital Leases
Notes Payable -
Notes payable consisted of the following:
June 30, December 31,
1995 1994
-------- ------------
Note payable to Marine Midland Bank,
due in monthly installments of $8,333
plus interest at the prime rate plus
3/4%, maturing in April, 1997. This
note is guaranteed by the officers/
stock-holders of the Company, and is
collateralized by substantially all of
the Company's assets. $ 175,000 $ 225,000
Various notes payable in aggregate
monthly installments of $1,391
including interest at rates ranging
from 8% to 9%. These notes mature
through June, 1997 and are
collateralized by the related
equipment. 29,639 27,682
---------- ---------
204,639 252,682
Less: Current Portion (197,915) (240,078)
---------- ---------
$ 6,724 $ 12,604
========== =========
Obligations Under Capital Leases:
The Company has entered into several capital lease agreements for
equipment. These obligations consist of the following:
June 30, December 31,
1995 1994
-------- ------------
Various leases payable in aggregate
monthly installments of $4,257
including interest at rates ranging
from 8.4% to 13.2%. These leases
mature through January, 1997 and are
collateralized by the equipment. $ 56,494 $ 79,130
Less: Current Portion (43,117) (45,805)
---------- ----------
$ 13,377 $ 33,325
========== ==========
- 10 -
(8) Lines-of-Credit
The Company may borrow up to $250,000 under the terms of a line-of-credit
agreement with a bank. This line-of-credit is renewable annually.
Amounts borrowed bear interest at the bank's prime rate plus 1/2% and are
collateralized by substantially all assets of the Company. At June 30,
1995 and December 31, 1994, there was $235,000 outstanding on this line.
The Company may also borrow up to $100,000 under the terms of an unsecured
line-of-credit with another bank. Amounts borrowed bear interest at the
bank's prime rate plus 1%. Borrowings under this line-of-credit are
personally guaranteed by the Company's principal officer/stockholder. At
June 30, 1995 and December 31, 1994, there were no borrowings on this
line-of-credit.
(9) Stockholders' Investment
Stock Options -
In July, 1992, the Company's Board of Directors adopted and the
stockholders approved the 1992 Stock Option Plan (1992 Plan) which
replaced the 1988 Stock Incentive Plan (1988 Plan).
Under the 1992 Plan, the Company may issue incentive stock options, non-
statutory options, non-employee director options and reload options. The
exercise price of incentive, non-statutory and reload options will not be
less than fair market value at date of grant. Incentive and non-statutory
options will generally expire ten years from date of grant. Reload
options will have a term equal to the remaining option term of the
underlying option.
The 1992 Plan also provides for annual grants of stock options to purchase
500 shares of the Company's common stock to non-employee directors of the
Company with an exercise price not less than fair market value at date of
grant. These options will expire ten years from date of grant.
Options issued under the 1988 Plan expire in 1995. No further options
will be granted under the 1988 Plan.
The Company has reserved 520,000 common shares for issuance under both
plans.
At June 30, 1995 and December 31, 1994, there were 271,000 options
outstanding under the 1992 and 1988 Plans.
- 11 -
(10) Related Party Transactions
Due to Officers/Principal Stockholders -
During 1994, 1993, and 1992, one of the Company's principal
officers/stock-holders made advances to the Company. These advances bear
interest at the prime rate plus 3% and repayment is subordinated to the
amounts outstanding under all other bank debt agreements. The principal
officer/stockholder has agreed not to require payment of this amount
through January 1, 1997.
At June 30, 1995 and December 31, 1994, the amounts outstanding on this
debt was $215,000 and $200,000, respectively.
Office Lease Commitment -
The Company leases its Rochester facility from a party related through
common management. The Company has a one year lease agreement through
December 31, 1995 at an annual rental of $68,000. Rent and common area
charges were approximately $58,372, $213,000 and $263,000 in 1994, 1993
and 1992, respectively. During 1994, total unpaid rent of $109,000 was
forgiven by the related party. This amount has been reflected as an
extraordinary item, net of income taxes, of $44,000. The Company owed
approximately $34,000 for unpaid rent at June 30, 1995.
Significant Customer -
In 1994, 1993 and 1992, 4%, 4% and 3%, respectively, of revenue was
derived from a related party.
(11) Lease Commitments
FCAC leases other office facilities under lease agreements expiring
through March, 1998.
Minimum lease payments under non-cancelable lease agreements are as
follows at December 31, 1994:
1995 . . . . . . . . . . . . . 119,501
1996 . . . . . . . . . . . . . 107,668
1997 . . . . . . . . . . . . . 54,668
1998 . . . . . . . . . . . . . 40,062
--------
$321,899
========
Rent expenses related to these operating leases was approximately
$135,000, $127,000 and $174,000 for the years ended December 31, 1994,
1993 and 1992, respectively.
- 12 -
(12) Reverse Stock Split
In July, 1992, the Company's stockholders approved a one-for-four reverse
stock split. In conjunction with this reverse stock split, the authorized
number of shares was reduced to 15,000,000 and par value was increased to
$.04 per share. These actions have been retroactively reflected in the
financial statements.
- 13 -
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
The Company's cash flow results from operations, bank loans, advances made by
principal stockholders and from sales of common stock.
During the first six months of 1995, cash reserves of $28,932 and cash flows
from operating activities of $94,541 were sufficient to fund the Company's
negative cash flow from investing and financing activities of $16,064 and
$55,679, respectively.
Cash Flow from Operations: The Company had positive cash flow from operating
activities through the first two quarters of 1995 of $94,541 compared to $39,710
for the same period in 1994. This position resulted primarily from the
Company's seasonal first and second quarter operating loss of $25,416 offset by
a $145,747 increase in accounts payable and a decrease in other current assets
of $7,682. Despite the significant increase in accounts receivable of $58,597
and a continued decrease in other current liabilities of $29,956, the Company
still managed to maintain a positive cash position from operating activities.
The Company expects its accounts receivable and accounts payable balances to
increase as quarterly order volume and sales revenues continue to rise.
Cash Flow from Investing Activities: The only capital expenditures incurred by
the Company during the first six months of 1995 related to capital improvements
for the Rochester corporate office building. These expenditures amounted to
$12,686 as compared to total capital expenditures of $49,434 for the same period
in 1994. The Company made no title plant investment for the second consecutive
quarter in 1995, whereas a total of $20,020 was contributed to this cause for
the previous calendar year through June, 1994. In addition, the Company
continued to make an investment in a Keyman life insurance policy with a cash
surrender value of $23,061 as of the end of the second quarter. At June 30,
1995, the Company had no material purchase commitments.
Cash Flow from Financing Activities: Primary cash flows from financing
activities relate to changes in financing under lines-of-credit, notes payable
and advances made by principal stockholders. To support operations during the
first two quarters of 1995, the Company increased borrowings from its principal
officer/stockholder by $15,000. This funding, along with the cash flow
generated from operating activities, was adequate to support the reduction of
notes payable and capital lease obligations of $48,043 and $22,636,
respectively.
The Company expects that the cash flow generated from operations and bank lines-
of-credit currently available will be adequate to meet its working capital and
capital expenditure needs for the remainder of 1995.
- 14 -
Results of Operations
Total revenues for the first six months of 1995 were $1,792,747 as compared to
$2,842,812 for the same six months of 1994. This decrease of $1,050,065 or 37%
resulted from decreased sales order volume especially in the home equity
market. The revenues generated from title insurance premiums decreased by 39%
to $696,567 as compared to $1,147,692 for the first half of the 1994 calendar
year. In addition to this significant decrease attributable to title
operations, revenues from abstract and appraisal fees during the first six
months of 1995 decreased by $598,940 to $1,096,180 as compared to $1,695,120
for the same period in 1994.
Due to the decreased sales order volume in areas where the Company does
business, the need for subcontractor services declined during the first six
months of 1995. Correspondingly, direct costs of revenue decreased to 19.9% of
revenues for this time period of 1995 as compared to 22.3% for the same period
in 1994. Gross profit for the six months ended June 30, 1995 was $1,435,065 or
80.1%. Operating expenses for the months of January, 1995 through June of 1995
were $1,422,875 or 79.4% of revenues as compared to $2,428,996 or 85.4% of
revenues for the same six months in 1994. The reduction in operating expenses
are primarily due to a sizeable decrease in personnel and the related variable
payroll costs. The Company anticipates a normal seasonal rise in revenues
during the third quarter of 1995 and a corresponding percentage reduction in
operating costs. At the same time, the Company will make necessary cuts in
operating expenses to bring them in line with projected revenues in order to
offset the cumulative loss of $25,416 for the first two quarters of 1995. This
compares to a net loss of $252,633 incurred in the first six months of 1994.
The Company's ratio of current assets to current liabilities at June 30, 1995
and December 31, 1994 was 57:1 and 54:1, respectively. Accordingly, the
Company had a working capital deficit of $513,689 as of June 30, 1995 compared
to $516,462 as of December 31, 1994.
- 15 -
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
- 16 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FOUR CORNERS FINANCIAL CORPORATION
Date August 9, 1995 By /s/ William S. Gagliano
William S. Gagliano
Executive Vice President and
Chief Accounting Officer
- 17 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 51,730
<SECURITIES> 0
<RECEIVABLES> 621,691
<ALLOWANCES> 85,000
<INVENTORY> 0
<CURRENT-ASSETS> 693,026
<PP&E> 1,154,811
<DEPRECIATION> 888,184
<TOTAL-ASSETS> 1,374,621
<CURRENT-LIABILITIES> 1,206,715
<BONDS> 0
<COMMON> 133,752
0
0
<OTHER-SE> (195,322)
<TOTAL-LIABILITY-AND-EQUITY> 1,374,621
<SALES> 1,792,747
<TOTAL-REVENUES> 1,792,747
<CGS> 357,682
<TOTAL-COSTS> 1,780,557
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 37,606
<INCOME-PRETAX> (25,416)
<INCOME-TAX> 0
<INCOME-CONTINUING> (25,416)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (25,416)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
