<PAGE>
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 March 31, 1996
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)
- --------------------------------------------------------------------------------
(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 May 10, 1996 there were 3,338,802 of the registrant's $.04 par value common
stock outstanding.
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
INDEX
Page
Number
------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of 1-2
March 31, 1996 (Unaudited) and
December 31, 1995
Consolidated Statements of Operations for the 3
Three Months Ended March 31, 1996 and 1995
(Unaudited)
Consolidated Statements of Changes in 4
Stockholders' Investment for the Three Months
Ended March 31, 1996 and 1995 (Unaudited)
Consolidated Statements of Cash Flows for the 5
Three Months Ended March 31, 1996 and 1995
(Unaudited)
Notes to Condensed Consolidated Financial 6-12
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of 13-14
Financial Condition and Results of Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Default Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of 15
Security Holders
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 16
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
ASSETS
March 31, December 31,
1996 1995
---------- ----------
(Unaudited)
CURRENT ASSETS:
Cash and equivalents $ 24,722 $ 62,791
Cash - escrow deposits 91,237 90,403
Accounts receivable - trade, net of
allowance for doubtful accounts of $84,000
in 1996 and 1995, respectively 488,178 464,288
Prepaid expenses 5,719 13,316
Other receivables 3,290 893
Current portion of note receivable 2,500 2,500
Income tax receivable -- --
---------- ----------
Total current assets 615,646 634,191
---------- ----------
TITLE PLANT 367,283 367,283
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation 178,138 195,940
---------- ----------
OTHER ASSETS:
Note receivable, net of current portion 10,000 10,000
Cash value of life insurance 17,616 17,616
Other assets 15,256 15,256
---------- ----------
42,872 42,872
---------- ----------
$1,203,939 $1,240,286
========== ==========
The accompanying notes are an integral part of these statements.
- 1 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
LIABILITIES AND STOCKHOLDERS' INVESTMENT
March 31, December 31,
1996 1995
----------- -----------
(Unaudited)
CURRENT LIABILITIES:
Line-of-credit $ 35,000 $ 35,000
Current portion of notes payable 101,995 104,961
Current portion of obligations under
capital leases 22,394 32,738
Notes payable to officers/principal
stockholders 23,000 27,500
Accounts payable 453,662 393,179
Accounts payable - related parties 20,000 20,000
Escrow deposits 91,237 90,403
Accrued income taxes 1,500 1,500
Other accrued expenses 31,578 50,886
----------- -----------
Total current liabilities 780,366 756,167
----------- -----------
LONG-TERM LIABILITIES:
Notes payable, net of current portion 203,888 227,924
Obligations under capital leases, net
of current portion -- 590
Due to officer/principal stockholder 200,000 200,000
----------- -----------
Total long-term liabilities 403,888 428,514
----------- -----------
Total liabilities 1,184,254 1,184,681
----------- -----------
STOCKHOLDERS' INVESTMENT:
Common stock, $.04 par value, 15,000,000
shares authorized, 3,343,802 issued and
3,338,802 outstanding in 1996 and 1995 133,752 133,752
Additional paid-in-capital 835,402 835,402
Accumulated deficit (943,844) (907,924)
----------- -----------
25,310 61,230
Less: Treasury stock at cost (5,625) (5,625)
----------- -----------
Total stockholders' investment 19,685 55,605
----------- -----------
$ 1,203,939 $ 1,240,286
=========== ===========
The accompanying notes are an integral part of these statements.
- 2 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
----------- -----------
(Unaudited) (Unaudited)
REVENUE:
Title insurance premiums $ 340,293 $ 348,460
Abstract and appraisal fees 548,441 491,283
--------- ---------
888,734 839,743
--------- ---------
DIRECT COSTS OF REVENUE:
Title insurance (116,128) (114,303)
Abstract and appraisal services (85,993) (58,150)
--------- ---------
(202,121) (172,453)
--------- ---------
Gross profit 686,613 667,290
OPERATING EXPENSES: (707,159) (743,854)
--------- ---------
Loss from operations (20,546) (76,564)
--------- ---------
INTEREST, NET: (15,374) (18,503)
--------- ---------
NET LOSS $ (35,920) $ (95,067)
========= =========
NET LOSS PER SHARE $ (.01) $ (.03)
========= =========
The accompanying notes are an integral part of these statements.
- 3-
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
----- 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, 1994 3,343,802 $ 133,752 $ 835,402 $(1,005,308) $ (5,625) $ (41,779)
Net loss for the three months ended
March 31, 1995 (Unaudited) -- -- -- (95,067) -- (95,067)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, March 31, 1995 (Unaudited) 3,343,802 $ 133,752 $ 835,402 $(1,100,375) $ (5,625) $ (136,846)
=========== =========== =========== =========== =========== ===========
BALANCE, December 31, 1995 3,343,802 $ 133,752 $ 835,402 $ (907,924) $ (5,625) $ 55,605
Net loss for the three months ended
March 31, 1996 (Unaudited) -- -- -- (35,920) -- (35,920)
----------- ----------- ----------- ----------- ----------- -----------
BALANCE, March 31, 1996 (Unaudited) 3,343,802 $ 133,752 $ 835,402 $ (943,844) $ (5,625) $ 19,685
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
- 4 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
1996 1995
----------- -----------
(Unaudited) (Unaudited)
CASH FLOW OPERATING ACTIVITIES:
Net loss $(35,920) $(95,067)
Adjustments to reconcile net loss to
net cash flow from operating activities:
Depreciation and amortization 21,131 27,475
Decrease/(increase) in accounts receivable (23,890) 3,926
Decrease in other current assets 5,200 1,821
Increase in accounts payable 60,483 72,282
Increase/(decrease) in other current liabs. (19,314) 23,142
-------- --------
Net cash flow from operating activities 7,690 33,579
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchases of property and equipment,
net of disposals (3,323) --
Investment in cash value of life insurance -- (2,456)
-------- --------
Net cash flow from investing activities (3,323) (2,456)
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in notes payable, net (27,002) (26,698)
Decrease in obligations under
capital leases, net (10,934) (11,480)
Increase in line-of-credit -- --
Increase/(decrease) in amount due to
officer/principal stockholder (4,500) 15,000
-------- --------
Net cash flow from financing activities (42,436) (23,178)
-------- --------
NET INCREASE/(DECREASE) IN CASH AND EQUIVALENTS: (38,069) 7,945
CASH AND EQUIVALENTS - beginning of period 62,791 28,932
-------- --------
CASH AND EQUIVALENTS - end of period $ 24,722 $ 36,877
======== ========
The accompanying notes are an integral part of these statements.
- 5 -
<PAGE>
FOUR CORNERS FINANCIAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996 AND 1995
(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.
- 6 -
<PAGE>
(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. These assets were fully amortized during 1995.
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.
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.
- 7 -
<PAGE>
(3) Summary of Significant Accounting Policies (Continued)
Revenue Recognition - (Continued)
The Company also performs title abstract research and provides appraisals
on real properties under an exclusive arrangement with a local appraisal
company. 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, 1995 or at
March 31, 1996. Therefore, no deferred taxes have been provided.
At December 31, 1995, the Company has available a net operating loss
carry-forward of approximately $360,000, 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 $91,237 and $90,403 at March 31, 1996 and December 31,
1995, respectively, are recorded as both a current asset and a current
liability in the accompanying consolidated balance sheets.
- 8 -
<PAGE>
(7) Notes Payable and Obligations Under Capital Leases
Notes Payable -
On December 13, 1995, the amount outstanding on the note payable to a bank,
$133,333, and $185,000 of the amount borrowed under its line-of-credit
agreement were refinanced with the same bank. The note payable and
line-of-credit have been classified in accordance with the new agreement as
of December 31, 1994. The note payable to the bank requires the company to
meet certain financial covenants at December 31, 1995 as follows:
a. Working capital deficit of $140,000.
b. Current ratio of .85 to 1
c. Minimum tangible net worth of $250,000
d. Total liabilities to tangible net worth of not more than 3.9 to 1.
e. Debt service ratio of not less than 1.75 to 1.
These ratios are adjusted on a quarterly or semi-annual basis during 1996
and thereafter. The agreement also limits the Company's ability to make
acquisitions, pay dividends and make capital expenditures, and requires the
Company to submit certain financial information. At December 31, 1995, and
March 31, 1996, the Company was in compliance with all covenants.
Notes payable consisted of the following:
March 31, December 31,
1996 1995
---------- ----------
Note payable to Marine Midland Bank, due in
monthly installments of $7,674 through
October, 1997 and $6,230 through October,
1999 plus interest at the bank's prime rate
plus 1.25%. This note is guaranteed by the
officers/stockholders of the Company and is
collateralized by substantially all of the
Company's assets. $ 295,311 $ 318,333
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. 10,572 14,552
---------- ----------
305,883 332,885
Less: Current Portion (101,995) (104,961)
---------- ----------
$ 203,888 $ 227,924
========== ==========
- 9 -
<PAGE>
Obligations Under Capital Leases:
The Company has entered into several capital lease agreements for
equipment. These obligations consist of the following:
March 31, December 31,
1996 1995
---------- ----------
Various leases payable in aggregate monthly
installments of $4,257 including interest at
rates ranging from 8.4% to 13.1%. These
leases mature through January, 1997 and are
collateralized by the equipment. $ 22,394 $ 33,328
Less: Current Portion (22,394) (32,738)
---------- ----------
$ --- $ 590
========== ==========
(8) Lines-of-Credit
The Company may borrow up to $50,000 under the terms of a new
line-of-credit agreement with a bank. This line-of-credit is renewable
annually. Amounts borrowed bear interest at the bank's prime interest rate
plus 1% and are collateralized by substantially all assets of the Company
and are guaranteed by the officers/stockholders of the Company. On December
13, 1995 $185,000 of the amount borrowed under this line-of-credit was
refinanced as part of the note payable to the same bank. At December 31,
1995 and March 31, 1996, there was $35,000 outstanding under this
line-of-credit.
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
March 31, 1995 and December 31, 1995, there were no borrowings on this
line-of-credit.
- 10 -
<PAGE>
(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 March 31, 1996 and December 31, 1995, there were 271,000 options
outstanding under the 1992 and 1988 Plans.
(10) Related Party Transactions
Due to Officers/Principal Stockholders -
During 1995, 1994, and 1993, one of the Company's principal officers/
stockholders 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, 1997.
At March 31, 1996 and December 31, 1995, the amount outstanding on this
debt was $200,000.
During 1995, certain of the Company's officers/principal stockholders
advanced $29,000 to the company in the form of non-interest bearing notes.
These notes have no formal repayment terms. However, it is anticipated that
these notes will be fully paid during 1996.
- 11 -
<PAGE>
Office Lease Commitment -
The Company leases its Rochester facility from a party related through
common management. The Company has a five year lease agreement through June
30, 2000 at an annual rental of $72,000. Rent and common area charges were
approximately $72,000, $58,000 and $213,000 in 1995, 1994 and 1993,
respectively. The Company owed approximately $20,000 for unpaid rent at
March 31, 1996 and December 31, 1995. 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.
Significant Customer -
In 1995, 1994 and 1993, 4% 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, 1995:
1996........................................ 103,479
1997........................................ 62,980
1998........................................ 53,895
1999........................................ 9,368
2000........................................ 781
--------
$230,503
========
Rent expense related to these operating leases was approximately $124,000,
$135,000 and $127,000 for the years ended December 31, 1995, 1994 and 1993,
respectively.
(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.
- 12 -
<PAGE>
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 three months of 1996, cash reserves of $62,791 and cash flow
from operating activities of $7,690 were sufficient to fund the Company's net
asset investments of $3,323 and a negative cash flow from debt financing
activities of $42,436.
Cash Flow from Operations: The Company had positive cash flow from operating
activities through the first three months of 1996 of $7,690 compared to $33,579
for the same period in 1995. The decrease in total operating cash flow was
primarily due to an increase in accounts receivable of $27,816 and a net loss of
$35,920.
Cash Flow from Investing Activities: The only capital expenditures incurred by
the Company during the first three months of 1996 related to capital
improvements for the Rochester corporate office building. The Company made no
title plant investment in 1995 or 1996. In addition, the Company maintains an
investment in a Keyman life insurance policy with a cash surrender value of
$17,616 as of the end of the first quarter. At March, 31, 1996, 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. Despite the effort to support the
ongoing operations during the first quarter of 1996, the Company was able to
repay a portion of its borrowings from its principal officer/stockholder by
$4,500. Additional borrowings of $15,000 were required during the same period in
1995. This negative cash flow was adequately funded through positive operating
cash flows and the cash reserve available at the beginning of 1996.
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 1996.
- 13 -
<PAGE>
Results of Operations
Total revenues for the first three months of 1996 were $888,734 as compared to
$839,743 for the same three month period of 1995. This increase of $48,991 or 6%
resulted from a slight increase in sales order volume resulting from stronger
economic conditions. The revenues generated from title insurance premiums
decreased by 2% to $340,293 as compared to $348,460 for the first quarter of the
1995 calendar year. Despite this slight decrease associated with title
operations, revenues from abstract and appraisal fees during the first three
months of 1996 increased by $57,158 to $548,441 as compared to $491,283 for the
same period in 1995.
Due to the increased sales order volume in areas where the Company does
business, as well as a reduction in internal staffing the need for subcontractor
services escalated during the first three months of 1996. Correspondingly,
direct costs of revenue increased to 22.7% of revenues for this time period of
1995 as compared to 20.5% for the same period in 1995. Gross profit for the
quarter ended March 31, 1996 was $686,613 or 77.3%. Operating expenses for the
months of January, 1996 through March of 1996 were $707,159 or 79.6% of revenues
as compared to $743,854 or 88.6% of revenues for the same three months in 1995.
The reduction in operating expenses is primarily due to a sizeable decrease in
personnel and the related variable payroll costs. The Company anticipates an
increase in revenues during the remaining quarters of 1996 and a corresponding
percentage reduction in operating costs sufficient to offset the net loss
incurred during the first quarter of 1996 of $35,920 and to return the company
to increased profitability by year end 1996. The $35,920 net loss in the first
quarter 1996 is the lowest loss since 1989 for the company and is compared to a
net loss of $95,067 incurred for the same period in 1995.
The Company's ratio of current assets to current liabilities at March 31, 1996
and December 31, 1995 was 79:1 and 84:1, respectively. Accordingly, the Company
had a working capital deficit of $164,714 as of March 31, 1995 compared to
$121,976 as of December 31, 1995.
- 14 -
<PAGE>
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
- 15 -
<PAGE>
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 May 14, 1996 By /s/William S. Gagliano
--------------------------- -------------------------------------
William S. Gagliano
Executive Vice President and
Chief Accounting Officer
- 16 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 24,722
<SECURITIES> 0
<RECEIVABLES> 572,178
<ALLOWANCES> 84,000
<INVENTORY> 0
<CURRENT-ASSETS> 615,646
<PP&E> 1,033,206
<DEPRECIATION> 855,068
<TOTAL-ASSETS> 1,203,939
<CURRENT-LIABILITIES> 780,360
<BONDS> 0
0
0
<COMMON> 133,752
<OTHER-SE> (114,061)
<TOTAL-LIABILITY-AND-EQUITY> 1,203,939
<SALES> 888,734
<TOTAL-REVENUES> 888,734
<CGS> 202,121
<TOTAL-COSTS> 707,159
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15,374
<INCOME-PRETAX> (35,920)
<INCOME-TAX> 0
<INCOME-CONTINUING> (35,920)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,920)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
