FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20001
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED SEPTEMBER 30, 1996 COMMISSION FILE NUMBER 07320
FARM FISH, INC.
A MISSISSIPPI CORPORATION E. I. NUMBER 64-0474591
Post Office Box 23109
Jackson, Mississippi 39225-3109
Telephone Number (601) 354-3801
Check whether the insurer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or 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 insurers classes of
common equity, as of the latest purchased date.
CLASS OUTSTANDING AS OF SEPTEMBER 30, 1996
Common Stock, No Par Value 2,688,605 Shares
FARM FISH, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets
September 30, 1996 and December 31, 1995 1
Consolidated Condensed Statements of Operations
Three Months and Nine Months Ended
September 30, 1996 and 1995 2
Consolidated Condensed Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995 3
Notes to Consolidated Condensed
Financial Statements 4
Management's Discussion and Analysis of Financial
Condition and Results of Operations 5,6
PART II OTHER INFORMATION 7
EXHIBIT 27 8
- 1 -
PART I FINANCIAL INFORMATION
FARM FISH, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
SEPTEMBER 30, DEC. 31,
1996 1995
_____________ _____________
(UNAUDITED) (*NOTE)
ASSETS
CURRENT ASSETS
Cash $ 28,790 22,231
Accounts Receivable 177,950 202,873
Inventories - Note 2 4,788,324 3,721,339
Prepaid Expenses 7,523 7,626
---------- ----------
Total Current Assets 5,002,587 3,954,069
PROPERTY, PONDS, AND EQUIPMENT - NET 2,160,742 2,178,391
OTHER ASSETS 255,543 377,355
---------- ----------
TOTAL ASSETS $7,418,872 $6,509,815
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 90,215 $ 10,801
Advances Payable to Shareholder &
Current Maturities 2,623,509 2,215,389
Other Accrued Expenses and Payable 258,344 112,368
---------- ---------
Total Current Liabilities 2,972,068 2,338,558
LONG TERM DEBT, Less Current Maturities 374,672 570,000
DEFERRED INCOME TAXES 123,000 123,000
STOCKHOLDER'S EQUITY
Common Stock - without par value, authorized
5,000,000 shares, subscribed and issued
2,688,605 shares at stated value at September
30, 1996 and 2,688,605 shares at December
31, 1995 4,424,336 4,424,336
Additional Paid-In Capital 475,776 475,776
Retained Earnings (Deficit) (950,980) (1,421,855)
---------- ----------
Total Stockholder's Equity 3,949,132 3,478,257
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $7,418,872 $6,509,815
========== ==========
*See accompanying notes to consolidated condensed financial statements.
- 2 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
---------------------- -----------------------
1996 1995 1996 1995
NET SALES $ 678,265 $1,284,580 $2,517,138 $3,026,692
OTHER INCOME 15,155 18,444 129,029 413,265
---------- ---------- ---------- ----------
693,420 1,303,024 2,646,167 3,439,957
COST AND EXPENSES
Cost of Sales 506,949 900,002 1,712,573 2,233,487
Selling, General,
& Other Than Interest 45,154 43,772 138,533 122,701
Interest 14,848 20,016 38,076 65,869
---------- ---------- ---------- ----------
Total Cost and Expenses 566,951 963,790 1,889,182 2,422,057
INCOME BEFORE INCOME TAXES 126,469 339,234 756,985 1,017,900
INCOME TAX EXPENSE 45,703 122,787 287,655 380,651
---------- ---------- ---------- ----------
NET INCOME $ 80,766 $ 216,447 $ 469,330 $ 637,249
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
(Primary & assuming
full Dilution) 2,688,605 2,688,605 2,688,605 2,688,605
---------- ---------- ---------- ----------
NET INCOME PER SHARE $ 0.03 $ 0.08 $ 0.17 $ 0.24
---------- ---------- ---------- ----------
See accompanying notes to consolidated condensed financial statements
- 3 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995.
NINE MONTHS ENDED
SEPTEMBER 30
_________________
1996 1995
NET CASH PROVIDED BY OPERATING ACTIVITIES $ (1,559) $ 915,842
INVESTING ACTIVITIES
Purchase of Equipment (200,002) (98,266)
Decrease (Increase) in Other Assets 33,120 (132,012)
---------- ----------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES (166,882) (230,278)
FINANCING ACTIVITIES
Proceeds from Borrowing 475,000 190,000
Principal Payments on Borrowing (300,000) (540,730)
Advances from Shareholders 0 (334,718)
Payments on Shareholders Advances 0 0
---------- ----------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES 175,000 (685,448)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,559 116
Cash and Cash Equivalents at Beginning of Period 22,231 96,864
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 28,790 $ 96,890
========== ==========
See accompanying notes to consolidated condensed financial statements
- 4 -
FARM FISH, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions for From 10-QSB and
Rule 10-01 of Regulations S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principals
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the nine-month
period ended September 30, 1996 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1996. For further
information refer to consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for year ended December
31, 1995.
NOTE 2: INVENTORIES
The components of inventory consist of the following:
SEPTEMBER 30, DEC. 31,
1996 1995
__________ __________
Live Fish $4,752,098 $3,714,867
Feed and Supplies 36,226 33,859
---------- ----------
TOTAL INVENTORY $4,288,324 $3,748,726
NOTE 3: INCOME TAXES
The effective income tax rate for the quarter ended September 30, 1996 and
September 30, 1995 differ from the statutory federal income tax rate due to
state income tax.
- 5 -
FARM FISH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is Management's Discussion and Analysis of certain significant
factors which have affected the Company's earnings during the periods included
in the accompanying statements of income.
OPERATING INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1995
During the nine month period ended September 30, 1996, Farm Fish,
Inc. made a profit (before tax) of $757,000 compared to $1,018,000
profit for the same period in 1995. Net sales were down $510,000
or 17% compared to the nine month period ended September 30, 1995.
Other income was down $284,000 compared to the same period last year.
A decrease in fingerling sales of $312,000 and an increase of $28,000
in patronage dividend accounted for the net decrease in other income.
This excess fingerling hatch over farm production needs from 1994 was
sold in the spring of 1995. In 1996 only comparable few were sold.
The average selling price of food fish was unchanged from 1995 to
1996 but the current nine month unit price was $.03 per pound less
due to a processing plant charge back of $104,000 over same period
last year.
Cost of sales was 68.0% of net food fish sales for the current nine
month period compared to 73.8% cost of sales of the same "product" for
the comparative period in 1995. Production cost have been steady for
both periods, but current interest expense was down $27,800 or 42.2%
because of a lower rate of interest on notes payable with creditor
and a lower average outstanding loan balance.
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
Farm Fish, Inc. had a net profit (before tax) of $126,000 for the
third quarter of 1996 compared to a net profit of $339,000 for the
same quarter of 1995. Net food fish sales for the three months ended
September 30, 1996 was $678,000 compared to $1,285,000 for the same
three months of 1995. Profit was down due to lower demand from
processors with current quarter sales down $607,000 of 47.2% from
the same period last year.
The average selling price of food fish for the current period was
unchanged compared to selling price for third quarter of 1995.
Processing plant loss "charge back" to stockholders for the current
quarter was $.09 per pound or $94,000 compared to no "charges" for
the same period last year.
Cost of sales was 74.7% of net food fish for the current period ended
September 30, 1996 compared to 70.1% cost of sales for the three month
period of 1995. Reduced sales volume accounted for most of this
increase in cost of sales for the current period.
- 6 -
FARM FISH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Continued
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996 current assets exceeded current liabilities
by $2,031,000 compared to $1,305,000 for the same period ended
September 30, 1995. This change was due primarly to an increase
in foodfish inventory of $1,040,000 resulting from the loss of sales
this current year, and an increase in current liabilities of $375,000
in line of credit advances.
Farm Fish, Inc. had an unused line of credit of $125,000 with a local
bank as of September 30, 1996, compared to $600,000 unused as of
September 30, 1995. The local bank has agreed to increase current
line of credit if needed. In addition to this line of credit and
internally generated funds, the company would rely on Delta Industries,
Inc. to supply additional working capital if needed. The company
secured its long-term debt in June 1993, in the amount of $870,000
with a different bank at a lower interest rate. Interest on this
note is payable quarterly beginning September 30, 1993 with the
annual principal payments of $100,000 due April 30 of each year
and final payment due April 30, 1999.
GENERAL
FAS 121 was adopted as of 1/1/96 with no impact on financials anticipated.
- 7 -
PART II OTHER INFORMATION
FARM FISH, INC.
ITEM 1 - LEGAL PROCEEDINGS
The Registrant is not aware of any pending legal proceedings, other than
ordinary routine litigation incidental to the business, involving the
Registrant or its subsidiary of any property or assets of the Registrant
of its subsidiary.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no stockholder's meeting held during the quarter ended
September 30, 1996.
ITEM 6 - EXHIBIT AND REPORT ON FORM 8-k
Exhibit 27 - Financial Data Schedule - (Page 8 Attached)
There was no report on Form 8-K for the quarter ended September 30, 1996.
SIGNATURES
In accordance with the requirement of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
FARM FISH, INC.
-----------------
(Registrant)
November 8, 1996
- -------------------- ---------------------------------
Date C. E. Horne, Secretary
and Chief Financial Officer
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<RECEIVABLES> 177,950
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