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 JUNE 30, 1997 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 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
June 30, 1997 and December 31, 1996 1
Consolidated Condensed Statements of Operations
Three Months Ended June 30, 1997 and 1996 2
Consolidated Condensed Statements of Cash Flows
Three Months Ended June 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
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
JUNE 30, DEC. 31,
1997 1996
_____________________________
(UNAUDITED) (*NOTE)
ASSETS
CURRENT ASSETS
Cash $ 22,882 $ 87,687
Accounts Receivable 189,292 174,230
Inventories - Note 2 4,522,843 4,656,796
Prepaid Expenses 7,523 0
---------- ----------
Total Current Assets 4,742,540 4,918,713
PROPERTY, PONDS, AND EQUIPMENT - NET 2,165,834 2,276,003
OTHER ASSETS 390,290 308,662
----------- ----------
TOTAL ASSETS $7,298,664 $7,503,378
========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable $ 35,050 $ 2,179
Advances Payable to Shareholder &
Current Maturities 2,601,156 2,175,171
Other Accrued Expenses and Payable 346,003 902,123
---------- ---------
TOTAL CURRENT LIABILITIES 2,982,209 3,079,473
LONG TERM DEBT, Less Current Maturities 123,000 270,000
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 June 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) (706,657) (875,207)
--------- ---------
TOTAL STOCKHOLDER'S EQUITY 4,193,455 4,024,905
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $7,298,664 $7,503,378
========== ==========
*See accompanying notes to consolidated condensed financial statements.
- 2 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THREE MONTHS ENDED JUNE 30, 1997 AND 1996.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
_______________________ ____________________
1997 1996 1997 1996
NET SALES $ 898,835 $899,596 $1,880,921 $1,859,939
COST AND EXPENSES
Cost of Sales 737,605 604,063 1,454,613 1,112,816
Selling, General, and
Administrative Expenses 62,791 47,604 114,492 93,379
Interest 9,331 8,663 29,113 23,228
--------- --------- ----------- -----------
Total Cost and Expense 809,727 660,330 1,598,218 1,229,423
INCOME BEFORE INCOME TAXES 89,108 239,266 282,703 630,516
INCOME TAX EXPENSE 33,862 90,921 107,428 241,952
--------- --------- ---------- ----------
NET INCOME $ 55,246 $ 148,345 $175,275 $388,564
========= ========= ======= =========
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 $ 0.02 $ 0.06 $ 0.07 $ 0.14
========= ========= ========= ========
See accompanying notes to consolidated condensed financial statements.
- 3 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THREE MONTHS ENDED JUNE 30 , 1997 AND 1996
SIX MONTHS ENDED
JUNE 30,
__________________________
1997 1996
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 523,140 $ 369,812
INVESTING ACTIVITIES
Purchase of Equipment (35,058) (31,840)
---------- --------------
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES (35,058) (31,840)
FINANCING ACTIVITIES
Principal Payments on Borrowing (505,000) (300,000)
Advances from Shareholders 0 23,148
Payments on Shareholders Advances (41,015) 0
-------- --------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES (546,015) (276,816)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (57,933) 61,156
Cash and Cash Equivalents at Beginning of Period 80,815 22,231
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,882 $ 83,387
======== =========
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 June 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:
JUNE 30, DEC. 31,
1997 1996
_____________________________
Live Fish $4,501,427 $4,635,380
Feed and Supplies 21,416 21,416
--------- ----------
TOTAL INVENTORY $4,522,843 $4,656,796
========== ==========
NOTE 3: INCOME TAXES
The effective income tax rate for the quarter ended June 30, 1997 and June 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 June 30, 1997 current assets exceeded current liabilities by $1,760,331
compared to $1,413,854 for the same period ended June 30, 1996. The most
significant component of the change was an increase in inventories of
$540,000.
Delta Industries, Inc. made no payments for the company during the six-month
period ending June 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 $1,530,000 available to borrow under its line
of credit as of June 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
The Annual Meeting of Stockholders' for Farm Fish, Inc. was held
May 27, 1997, with the election of T. L. Reed, III, Thomas R. Slough, Jr.,
Leland R. Speed, and W. D. Mounger as directors. The annual report for
1996 and all actions of the officer and directors of the corporation were
adopted and approved.
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 June 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)
August 14, 1997
- -------------------- -----------------------------
Date C. E. Horne, Secretary
and Chief Financial Officer
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