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 30,1997 COMMISSION FILE NUMBER 07320
FARM FISH, INC.
A MISSISSIPPI CORPORATION E. I. NUMBER 64-0532896
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 JUNE 30, 1997 2,688,605 SHARES
Common Stock, No Par Value Number of Shares
FARM FISH, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets
Sept. 30, 1997 and December 31, 1996 1
Consolidated Condensed Statements of Operations
Three Months and Nine Months Ended
Sept. 30, 1997 and 1996 2
Consolidated Condensed Statements of Cash Flows
Nine Months Ended Sept 30, 1997 and 1996 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
SEPT. 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
SEPT 30, DEC 1,
1997 1996
_________________________
(UNAUDITED) (*NOTE)
ASSETS
CURRENT ASSETS
Cash $ 43,356 $ 87,687
Accounts Receivable 143,531 174,230
Inventories - Note 2 5,177,185 4,656,796
Prepaid Expenses 7,523 0
---------- ----------
Total Current Assets 5,371,595 4,918,713
PROPERTY, PONDS, AND EQUIPMENT - NET 2,111,661 2,276,003
OTHER ASSETS 500,891 308,662
----------- ----------
TOTAL ASSETS $7,984,147 $7,503,378
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 100,178 $ 2,179
Advances Payable to Shareholder &
Current Maturities 3,230,527 2,175,171
Other Accrued Expenses and Payable 314,234 902,123
---------- ---------
TOTAL CURRENT LIABILITIES 3,644,939 3,079,473
LONG TERM DEBT, Less Current Maturities 270,000
DEFERRED INCOME TAXES 123,000 129,000
STOCKHOLDER'S EQUITY
Common Stock - without par value, authorized 5,000,000 shares,
subscribed and issued 2,688,605 shares at stated value at
Sept 30,1997 and 2,688,605 shares at December 31, 1996
4,424,336 4,424,336
Additional Paid-In Capital 475,776 475,776
Retained Earnings (Deficit) (683,904) (875,207)
--------- ---------
TOTAL STOCKHOLDER'S EQUITY 4,216,208 4,024,905
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
$7,985,147 $7,503,378
========== ==========
*See accompanying notes to consolidated condensed financial statements.
- 2 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THREE AND NINE MONTHS ENDED SEPT 30, 1997 AND 1996.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30 SEPT 30
_______________________ ____________________
1997 1996 1997 1996
NET SALES $ 681,052 $785,937 $2,570,522 $2,656,691
COST AND EXPENSES
Cost of Sales 596,603 599,466 2,059,765 1,723,097
Selling, General, and
Administrative Expenses 48,888 63,875 163,380 138,533
Interest 12,808 17,834 41,921 38,076
-------- ---------- --------- ---------
Total Cost and Expense 658,299 659,468 2,265,066 1,899,706
INCOME BEFORE INCOME TAXES 0 126,469 305,456 756,985
INCOME TAX EXPENSE 0 45,703 107,428 287,655
-------- --------- ---------- ----------
NET INCOME $ 22,753 $ 80,766 $198,028 $469,330
========= ========= ======= =========
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 $ 0.01 $ 0.03 $ 0.07 $ 0.17
========= ========= ========= ========
*See accompanying notes to consolidated condensed financial statements.
- 3 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR NINE MONTHS ENDED SEPT 30 , 1997 AND 1996
NINE MONTHS ENDED
SEPT 30,
_________________________
1997 1996
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 52,407 $(1,559)
INVESTING ACTIVITIES
Purchase of Equipment (22,441) (200,002)
Decrease (Increase) in Other Assets 33,120
--------- ----------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES 29,966 (166,882)
FINANCING ACTIVITIES
Proceeds from Borrowing 405,934 475,000
Principal Payments on Borrowing (505,000) (300,000)
Advances from Shareholders 31,641 0
Payments on Shareholders Advances (41,015) 0
-------- --------
NET CASH PROVIDED(USED)IN FINANCING ACTIVITIES (67,425) 175,000
INCREASE(DECREASE)IN CASH AND CASH EQUIVALENTS (37,459) 6,559
Cash and Cash Equivalents at Beginning of Period 80,815 22,231
------ --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 43,356 $28,790
======== =========
*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 Form 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 six-month period ended Sept. 30, 1997
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1997. For further information refer to consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for year ended December 31, 1996.
NOTE 2: INVENTORIES
The components of inventory consist of the following:
SEPT. 30, DEC. 31,
1997 1996
_____________________________
Live Fish $5,156,355 $4,635,380
Feed and Supplies 20,830 21,416
--------- ----------
TOTAL INVENTORY $5,177,185 $4,656,796
========== ==========
NOTE 3:
For the Three Months period for 1997 and 1996, the company recorded
$40,381 and $102,008, respectively, at operating losses from Delta Pride and for
the Nine Months period in 1997 and 1996, recorded $116,403 and $115,163,
respectively, of operating loses from Delta Pride, which are included in other
costs and expenses in Accompanying Consolidated Condensed Statement of
Operations. Other income in the Three Months period for 1997 and 1996 of $1,141
and $1,794, respectively, and for the Nine Months period in 1997 and 1996 of
$90,830 and $104,639, respectively are included in other costs and expenses of
the Accompanying Consolidated Condensed Statement of Operations.
NOTE 4: INCOME TAXES
The effective income tax rate for the quarter ended Sept. 30, 1997 and Sept. 30,
1996 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
SIX MONTH ENDED JUNE 30, 1997 COMPARED TO SIX MONTH ENDED JUNE 30,1996
Net sales for the six months ended June 30, 1997 increased by $20,982
or 1% from 1996. The number of food fish pounds sold during the period increased
by 185,647 or 8%. The average selling price of food fish decreased by $.05 per
pound accounting for the decrease in profits of $125,395 from the sale of
food fish. The decrease was manifest throughout the industry resulting from
weaker demand for food fish.
Cost of product sold for six months ending June 30, 1997, increased by $.09
per pound compared to the same period of 1996. This 17% increase was due to an
increase of inventory valuation of $.04 per pound that occurred principally
during the last half of the fiscal 1996 year due to increased feed prices.
Catfish feed represents the single most significant component of Farm Fish's
cost of product.
General and administrative expenses for the period increased by $21,113.
This increase was due principally to increased cost in professional fees.
Interest expense, increased by $5,885 due to an increase in average
borrowings.
As a result of the above, net income decreased by $213,289 to $175,275.
THREE MONTHS ENDED JUNE 30,1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
Net sales for the months ended June 30, 1997 decreased by $761 from 1996.
The number of pounds of food fish sold during the period increased by 76,467
pounds or 7%. The average selling price of food fish during this period
decreased by $.05 per pound.
Cost of sales increased from 1996 by $133,542 or 22% due to increased
inventory valuation. General and administration expenses increased over 1996
by $15,187 or 32%. Legal and professional fees were significant portions of this
increase.
-6-
FARM FISH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Continued
LIQUIDITY
As of September 30, 1997 current assets exceeded current liabilities
by $1,727,000 compared to $2,031,000 for the same period ended Sept 30, 1996.
The most significant component of the change was an increase in inventories of
$389,000 and an increase in current liabilities of $610,000 on line of credit
advances.
Delta Industries, Inc. made no payments for the company during the
nine-month period ending Sept. 30, 1997, or for the same period in 1996.
The Company obtained a new line of credit note on May 2, 1997, with a
local bank for $2,000,000 guaranteed by Delta Industries, Inc. at a lower rate
of interest than the company's existing line of credit. This line is renewable
annually. Farm Fish, Inc. had $913,000 available to borrow under its line of
credit as of Sept. 30, 1997. 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.
GENERAL
FAS 121 was adopted as of January 1, 1996 with no impact on the Company's
financial position or operations.
- 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 meetings held during the quarter ended
September 30, 1997.
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, 1997.
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 14, 1997
-------------------- -------------------------
Date C. E. Horne, Secretary
and Chief Financial Officer
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