<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1995
Commission file number 0-9964
BESICORP GROUP INC.
__________________________________________________________________
(Exact name of small business issuer as specified in its charter)
New York 14-1588329
__________________________________________________________________
(State or other jurisdiction of (Internal Revenue Service
incorporation or organization) Employer Identification No.)
1151 Flatbush Road, Kingston, New York 12401
__________________________________________________________________
(Address of principal executive office) (Zip Code)
Issuer's Telephone Number, including area code: (914) 336-7700
N/A
__________________________________________________________________
(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 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 __X__ No____
Common stock outstanding as of August 9, 1995 2,940,655
Transitional Small Business
Disclosure Format Yes______ No ___X___
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PART I - FINANCIAL INFORMATION
Item I - FINANCIAL STATEMENTS
BESICORP GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
June 30,1995 March 31,1995
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 417,136 $ 695,631
Short-term investments 1,488,559 1,472,276
Trade accounts and notes receivable (less allowance for 746,411 724,639
doubtful accounts of $22,600)
Due from affiliates 65,915 118,715
Current portion of long-term trade notes receivable:
Others (includes interest of $16,033 and $16,165,
respectively) 89,317 88,046
Inventories 1,214,474 1,344,942
Refundable income taxes 68,954 67,906
Other current assets 123,720 108,417
------------ --------------
Total Current Assets 4,214,486 4,620,572
------------ --------------
Property, Plant and Equipment:
Land and improvements 178,804 135,000
Buildings and improvements 1,860,253 1,842,915
Machinery and equipment 874,638 816,677
Furniture and fixtures 195,441 195,441
------------ --------------
3,109,136 2,990,033
Less accumulated depreciation 911,654 842,656
------------ --------------
Net Property, Plant and Equipment 2,197,482 2,147,377
------------ --------------
Other Assets:
Patents and trademarks, less accumulated amortization of 74,694 83,654
$620,012 and $611,051, respectively
Long-term notes receivable:
Affiliates 559,309 560,151
Others 2,312,234 2,327,834
Deferred expense 929,362 932,705
Other assets 194,941 197,049
------------ --------------
Total Other Assets 4,070,540 4,101,393
------------ --------------
TOTAL ASSETS $ 10,482,508 $ 10,869,342
------------ --------------
------------ --------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
BESICORP GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
<TABLE>
<CAPTION>
June 30,1995 March 31,1995
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 1,035,862 $ 1,359,027
Current portion of long-term debt 115,618 89,717
Current portion of accrued reserve and warranty expense 121,451 111,218
Taxes other than income taxes 1,363 141,474
Income taxes payable 47,133 46,630
------------ -------------
Total Current Liabilities 1,321,427 1,748,066
Investment in Partnerships 1,483,012 1,312,060
Deferred Income Taxes 181,000 181,000
Deferred Revenue 1,045 26,477
Long-Term Accrued Reserve and Warranty Expense 115,817 133,638
Long-Term Debt 3,522,460 3,485,082
------------ -------------
Total Liabilities 6,624,761 6,886,323
------------ -------------
Shareholders' Equity:
Common stock, $0.10 par value: authorized 5,000,000 shares;
issued 3,226,646 and 3,223,396 shares, respectively 322,665 322,340
Additional paid in capital 4,566,335 4,552,129
Retained earnings 448,830 493,952
------------ -------------
5,337,830 5,368,421
Less: treasury stock at cost (285,991 shares and 210,091
shares, respectively) (1,480,083) (1,385,402)
-------------- ---------------
Total Shareholders' Equity 3,857,747 3,983,019
------------ -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 10,482,508 10,869,342
------------ -------------
$------------ $-------------
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
BESICORP GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
1995 1994
<S> <C> <C>
Revenues:
Product sales $ 1,352,328 $ 1,570,240
Development and management fees 68,247 220,693
Other 12,358 9,572
---------- ----------
Total Revenues 1,432,933 1,800,505
---------- ----------
Costs and Expenses:
Cost of product sales 1,095,793 1,189,914
Selling, general and
administrative expenses 1,324,877 1,295,619
---------- ----------
Total Costs and Expenses 2,420,670 2,485,533
---------- ----------
Operating loss (987,737) (685,028)
Interest and other investment income 44,801 53,959
Interest expense (92,991) (75,759)
Income from partnerships 982,394 289,673
Other income 8,778 2,658
---------- ----------
Loss before income taxes (44,755) (414,497)
Provision (credit) for income taxes 366 (48,000)
---------- -------------
Net loss $ (45,121) $ (366,497)
------------ -------------
------------ -------------
Loss per common share $ (.02) $ (.12)
------------ -------------
------------ -------------
Weighted average number of shares outstanding
(in thousands)
2,989 3,097
---------- ----------
---------- ----------
Dividends per common share NONE NONE
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
BESICORP GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
1995 1994
<S> <C> <C>
Operating activities:
Net loss $ (45,121) $ (366,497)
Adjustments to reconcile net loss to net
cash used by operating activities:
Deferred taxes 0 23,000
Amortization of discounts on notes (549) (12,096)
Depreciation and amortization 98,134 73,812
Gain (loss) on sale/disposal of assets (861) 94,053
Unrealized holding gain (18,214) (25,999)
Partnership income recognized (982,394) (289,673)
Changes in assets and liabilities:
Short-term investments 2,793 0
Accounts and notes receivable 46,748 (196,074)
Inventory 130,468 106,368
Accounts payable and accrued expenses (323,165) (120,764)
Taxes payable (140,656) (62,689)
Other assets and liabilities, net (62,160) (199,698)
----------- ------------
Net cash used by operating activities (1,294,977) (976,257)
----------- ------------
Financing activities:
Increase in borrowings 68,940 0
Repayment of borrowings (25,361) (17,532)
Purchase of common stock (94,681) (247,423)
Issuance of common stock 14,531 0
---------- ----------
Net cash used by financing activities (36,571) (264,955)
----------- ------------
Investing Activities:
Distributions from partnerships 1,153,346 865,188
Purchases of short-term investments 0 (3,550,210)
Proceeds from sale of short-term investments 0 3,941,716
Acquisition of property, plant and equipment (100,293) (42,530)
----------- ------------
Net cash provided by investing activities 1,053,053 1,214,164
---------- ----------
Decrease in cash (278,495) (27,048)
Cash - beginning 695,631 353,091
---------- ----------
Cash - ending $ 417,136 $ 326,043
---------- ----------
---------- ----------
Supplemental cash flow information:
Interest paid $ 91,625 $ 71,764
Income taxes paid 1,079 1,300
Additions to property, plant and equipment which were
financed and not included above $ 19,700 $ 0
</TABLE>
See accompanying notes to consolidated financial statements.
5
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BESICORP GROUP INC. AND SUBSIDIARIES
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. In the opinion of Management, the accompanying consolidated financial
statements contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the Company's financial position as of
June 30, 1995, and March 31,1995; the results of operations for the three-month
periods ended June 30, 1995 and 1994; and the statement of cash flows for the
corresponding three-month periods.
B. The results of operations for the three-month period are not necessarily
indicative of the results to be expected for the full year.
C. Inventories
Inventories are carried at the lower of cost (first-in, first-out method), or
market. Inventories at June 30, 1995 and March 31, 1995, consist of:
<TABLE>
<CAPTION>
June 30, 1995 March 31, 1995
<S> <C> <C>
Assembly parts $ 405,068 $ 281,545
Finished goods 809,406 1,063,397
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$ 1,214,474 $ 1,344,942
------------- ---------------
------------- ---------------
</TABLE>
D. Deferred Expense
Deferred expenses and reimbursable costs at June 30, 1995 and March 31, 1995
were as follows:
<TABLE>
<CAPTION>
Internal Costs Third
Payroll Expenses Party Costs Total
<S> <C> <C> <C> <C>
Balance March 31, 1995 $350,602 $ 57,477 $ 524,626 $ 932,705
Additions 97,148 30,367 9,242 136,757
Expensed - - - -
Reimbursements - - (140,100) (140,100)
------- -------- ----------- --------
Balance June 30, 1995 $447,750 $ 87,844 $ 393,768 $ 929,362
---------- ----------- -------------- -----------
---------- ----------- -------------- -----------
</TABLE>
E. Investments in Partnerships
At June 30, 1995 and March 31, 1995 the balance of recorded investments was
comprised of the following:
<TABLE>
<CAPTION>
June 30, 1995 March 31, 1995
<S> <C> <C>
Capital contributions and investments $ 2,971,813 $ 2,971,813
Partnership distributions (9,166,448) (8,013,103)
Recognized share of income (losses) 4,711,623 3,729,230
------------- --------------
$ (1,483,012) $ (1,312,060)
------------- --------------
------------- --------------
</TABLE>
The financial position and results of operations for the partnerships as
reported in the financial statements issued by the respective partnerships as at
March 31, 1995 (unaudited) and December 31, 1994 (audited) and for the three
months and year then ended were as follows:
6
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Year Ended
March 31, 1995 December 31, 1994
<S> <C> <C>
Total Partnerships:
Assets $ 626,373,028 $ 612,195,225
Plant and equipment 487,177,520 478,583,048
Secured debt 590,689,014 564,434,345
Partners' deficit (17,766,742) (12,144,159)
Revenues 25,835,434 124,924,721
Income (loss) (3,691,067) 7,711,604
Company's Share:
Partners' deficit (8,592,886) (5,963,687)
Income (loss) (1,674,447) 3,869,846
</TABLE>
The operating assets of the partnerships secure the projects' debt, and the
expected significant losses incurred by the partnerships in the early years of
operation are funded by that debt. Consequently, the Company, having no
obligation to fund the losses or pay the partnerships' debt, does not generally
record the losses in the financial statements. The income (loss) from
partnerships, which has been recorded on the financial statements, has been
recognized on projects where income has exceeded prior unrecognized accumulated
losses, but not on partnerships where the Company has a zero investment or where
accumulated losses are in excess of the net investment.
F. Revenue Recognition
Revenues on sales of products are recognized at the time of shipment of goods.
Development fee revenue is recognized when deemed payable under the agreement.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The Company's net loss for the three months ended June 30, 1995, of $45,121
represents an increase in net income of $321,376 as compared to the net loss of
$366,497 for the three months ended June 30, 1994. The factors which contributed
to these changes in net income are discussed below.
REVENUES
Consolidated
Consolidated revenues decreased by $367,572 during the three months ended June
30, 1995 as compared to the three months ended June 30, 1994.
Product Segment
Gross revenues attributable to the Product Segment during the three-month period
ended June 30, 1995 decreased by $217,778 as compared to the prior period
primarily due to decreases in sales of solar pool heating products of $172,122
and radiant heating products of $40,122. The Company attributes these decreases
to the warmer than normal weather conditions experienced during the first
quarter of Fiscal 1996.
Project Segment
For the Project Segment, revenues attributable to development and management
fees during the current three-month period decreased by $152,446 as compared to
the prior period. The Company received no development fees or expense
reimbursements during the quarters ended June 30, 1995 and June 30, 1994. The
Company anticipates that management and development fees will be lower in Fiscal
1996 than they were in Fiscal 1995.
7
<PAGE>
COSTS AND EXPENSES
Cost of Product Sales
Cost of product sales for the three-month periods ended June 30, 1995 and 1994
were $1,095,793 and $1,189,914, respectively, or 81% and 76% of revenues
attributable to product sales. The cost decrease in dollars is a function of the
lower sales volume. The increase in the cost of sales percentage is due
primarily to the Segment's product sales mix. Sales of solar electric products
for the current three-month period comprised a higher percentage of the sales of
the total Segment than in the prior year period. These products generate a
significantly lower margin than the Company's historic product lines, resulting
in an overall increase in the cost of product sales percentage. Plant overhead
costs associated with the Company's manufacturing facility (opened in December
1994) also contributed to the higher percentage.
Costs of Development and Management Fees
Other than the settlement of deferred expenses in conjunction with project
closings, there are no specific costs and expenses identified with the
development and management fee revenue. Costs and expenses associated with this
segment are the normal selling, general and administrative expenses of the
Company.
Selling, General and Administrative Expenses
Consolidated
Selling, general and administrative expenses ("SG&A") increased by $29,258, or
2% for the three-month period ended June 30, 1995 as compared to the three-month
period ended June 30, 1994. Both Project and Product Segments showed little
change in SG&A levels when compared to the prior year period.
NON-OPERATING REVENUES AND EXPENSES
Interest and Other Investment Income
Interest and other investment income during the three months ended June 30, 1995
decreased by $9,158 compared to the three months ended June 30, 1994. This
decrease is due primarily to the Company's decision not to record interest
income on the combined loan of $2,500,000 to the Allegany project due to ongoing
litigation, as previously disclosed.
Interest Expense
Interest expense for the three-month period ended June 30, 1995 increased by
$17,232 compared to the prior period primarily due to a higher average interest
rate during the current period on the Stewart & Stevenson, Inc. ("S&S") loan and
a higher average interest rate on the mortgage on the Company's corporate
headquarters.
Income from Partnerships
During the three-month period ended June 30, 1995 the Company recognized
$982,394 of income from partnerships, an increase of $692,721 compared to the
three months ended June 30, 1994. It is anticipated that certain partnerships
will continue to generate income over the balance of the year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased by $20,553 during the three months ended
June 30, 1995 from $2,872,506 to $2,893,059.
During the quarter ended June 30, 1995 the Company realized a decrease in cash
of $1,294,977 from its operating activities, primarily due to the net loss
adjusted for non-cash items of $949,005, including partnership income of
$982,394, as well as significant reductions in payables.
The Company's financing activities during the current quarter resulted in a net
decrease in cash of $36,571, primarily as a result of the Company's purchase of
$94,681 of its common stock including shares purchased under the stock
repurchase program, offset by a net increase in the Company's borrowings of
$43,579.
8
<PAGE>
Investing activities during the current quarter resulted in an increase in cash
of $1,053,053, primarily as a result of the receipt of distributions from
partnerships of $1,153,346.
The Management of the Company believes that it has and will continue to have
sufficient sources of liquidity and the ability to repay all of its financial
obligations.
Financing for construction of the development projects is generally provided by
loans to the particular partnerships which are secured by the project assets
only. Except for the financing provided to the Allegany project, the Company
generally does not incur significant capital costs associated with construction
of these projects. The Company provided financing to the Allegany project
utilizing a portion of its $3,000,000 line of credit under the S&S loan
agreement. At June 30, 1995 the Company had $2,500,000 outstanding under this
line of credit, with an additional $500,000 available. The Company expects that
its capital requirements for its operations, for repayment of long-term debt and
for project development expenses will be met by its current cash and short-term
investment position as well as by anticipated cash flows from ownership
distributions from operations of the projects and the anticipated cash flows
from projects currently under development, improved sales and margins from the
product segment and future borrowings against project interests and other
corporate financings, as available.
At the Company's annual shareholders' meeting in September 1993, the
shareholders approved a stock repurchase plan. Under the plan the Company, in
the discretion of Management, may purchase up to 300,000 shares of the Company's
common stock. At June 30, 1995 the Company had purchased a total of 249,150
shares of common stock at an aggregate purchase price of $1,673,914 under the
repurchase plan and through various private transactions. Additionally, 72,500
shares were acquired for approximately $67,000 under other agreements.
Subsequent to June 30, 1995 no additional shares have been acquired.
The Company has no other material capital commitments for Fiscal 1996 other than
as disclosed above and in Form 10-KSB for the year ended March 31, 1995.
PART II - OTHER INFORMATION
Item 1. - LEGAL PROCEEDINGS
There have been no material changes in the legal proceedings to which the
Company is a party as discussed in Form 10-KSB for the year ended March 31,
1995.
Item 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a.) No exhibits are required to be filed herewith.
(b.) There were no reports filed on Form 8-K during the quarter ending June 30,
1995.
SIGNATURES
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.
Besicorp Group Inc., Registrant
Date: August 14, 1995 /s/ Michael F. Zinn
Michael F. Zinn
President (principal executive officer)
Date: August 14, 1995 /s/ Michael J. Daley
Michael J. Daley
Vice President, Chief Financial Officer
(principal financial and accounting officer)
9
