FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20001
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1998 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 in 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 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 purchase date.
CLASS OUTSTANDING AS OF JUNE 30, 1998 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, 1998 and December 31, 1997 1
Consolidated Condensed Statements of Operations
Three Months and Six Months Ended June 30, 1998
and 1997 2
Consolidated Condensed Statements of Cash Flows
Six Months Ended June 30, 1998 and 1997 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, 1998 (UNAUDITED) AND DECEMBER 31, 1997
JUNE 30, DEC. 31,
1998 1997
____________________________
(UNAUDITED) (*NOTE)
ASSETS
CURRENT ASSETS
Cash $ 29,766 $ 50,144
Accounts Receivable 191,007 207,264
Inventories - Note 2 4,938,702 5,067,783
Prepaid Expenses 10,867 11,480
---------- ---------
Total Current Assets 5,170,342 5,336,671
PROPERTY, PONDS, AND EQUIPMENT - NET 2,063,937 2,169,535
OTHER ASSETS 214,632 336,330
---------- ---------
TOTAL ASSETS $7,448,911 $7,842,536
========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 97,982 $ 11,428
Advances Payable to Shareholder &
Current Maturities 2,651,709 3,309,853
Other Accrued Expenses and Payables 216,422 159,011
---------- ---------
TOTAL CURRENT LIABILITIES 2,966,113 3,480,292
DEFERRED INCOME TAXES 126,000 126,000
STOCKHOLDERS' EQUITY
Common Stock - without par value, authorized
5,000,000 shares, subscribed and issued 2,688,605
shares at stated value at June 30, 1998 and
2,688,605 shares at December 31, 1997 4,424,336 4,424,336
Additional Paid-In Capital 475,776 475,776
Retained Earnings (Deficit) (543,314) (663,868)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY 4,356,798 4,236,344
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,448,911 $7,842,536
=========== =========
See accompanying notes to consolidated condensed financial statements.
- 2 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
_____________________ __________________
1998 1997 1998 1997
NET SALES $ 864,130 $ 852,812 $1,773,877 $1,813,450
OTHER INCOME 1,898 570 90,779 88,263
--------- --------- --------- ---------
866,028 853,382 1,864,656 1,901,713
COST AND EXPENSES
Cost of Sales 770,276 692,189 1,502,660 1,475,442
Selling, General, and
Administrative Expenses 74,104 62,754 130,779 114,455
Interest 11,119 9,331 28,933 29,113
--------- --------- --------- ---------
Total Cost and Expense 855,499 864,274 1,662,372 1,619,010
INCOME BEFORE INCOME TAXES 10,529 89,108 202,284 282,703
INCOME TAX EXPENSE (9,360) (33,862) (81,730) (107,428)
--------- --------- --------- ---------
NET INCOME $ 1,169 $ 55,246 $120,554 $175,275
========= ========= ========= ========
NET INCOME PER BASIC AND
DILUTED SHARE $.00 $0.02 $.04 $.07
========= ========= ========= ========
WEIGHTED AVERAGE BASIC AND DILUTED
COMMON SHARES OUTSTANDING 2,688,605 2,688,605 2,688,605 2,688,605
========= ========= ========= ==========
See accompanying notes to consolidated condensed financial statements
- 3 -
FARM FISH, INC.
CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR SIX MONTHS ENDED JUNE 30, 1998 AND 1997
SIX MONTHS ENDED
JUNE 30
______________________
1998 1997
NET CASH PROVIDED BY OPERATING ACTIVITIES $720,469 $523,140
INVESTING ACTIVITIES
Purchase of Equipment (72,439) (35,058)
FINANCING ACTIVITIES
Proceeds from Borrowing 0 0
Principal Payments on Borrowing (676,997) (505,000)
Advances from Shareholders 18,852 0
Payments on Shareholders Advances 0 (41,015)
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (658,145) (546,015)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,115) (57,933)
CASH AND CASH EQUIVALENTS AT BEGINNING 50,144 80,815
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $40,029 $22,882
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 principles 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,
1998 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1998. For further information refer to consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997.
NOTE 2: INVENTORIES
The components of inventory consist of the following:
JUNE 30, DEC. 31,
1998 1997
_________________________
Live Fish $4,914,720 $5,046,367
Feed and Supplies 23,982 21,416
---------- ----------
TOTAL INVENTORY $4,938,702 $5,067,783
========== ==========
- 5 -
FARM FISH, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
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 MONTHS ENDED JUNE 30, 1998, COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
Sales for the period ending June 30, 1998 were $1,773,877 compared to
$1,813,450 for the same period in 1997.
During the six month period ended June 30, 1998, Farm Fish, Inc.
made a profit before taxes of $202,284 compared to $282,703 profit
for the same period in 1997.
The price of live fish sold for the period averaged $.80 per pound
compared to $.75 per pound for the same period in 1997. No fingerling
sales were made for the first or second quarters of 1997 or 1998.
Cost of Sales was 89% of sales for the current period compared to
84% of sales for the same period of 1997. The average production
cost of fish for the period was $.5820 per pound compared to $.5561
average production cost per pound for the same period last year.
Increased production costs were due to higher feed costs for the past
24 months and an adjustment of $47,387 for mortality.
The company had other income including dividends from a feed cooperative
Of $85,262 for the current period while other income for the first
period of last year was $80,778.
THREE MONTHS ENDED JUNE 30,1998, COMPARED TO THREE MONTHS ENDED JUNE 30,
1997
Net sales for the three months ended June 30, 1998 increased by $11,318
from 1997. The number of pounds of food fish sold during the period
decreased by 28,812 pounds. The average selling price of food fish
during this period increased by $.05 per pound.
Cost of sales increased from 1997 by $78,087 due primarily to an
adjustment for mortality of $41,659. General and Administrative
expenses increased over 1997 by $11,350. Legal and professional
fees were significant portions of this increase.
- 6 -
FARM FISH, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY
As of June 30, 1998, current assets exceeded current liabilities by
$2,204,229 compared to $1,760,331 for the same period ended June 30, 1997.
Delta Industries, Inc. made no payments for the company during the six
month period this year or for the same period in 1997.
Farm Fish, Inc. had an unused line of credit with a local bank as of June
30, 1998 of $1,500,000 compared to $1,530,000 unused as of June 30, 1997.
The total line of credit as of June 30, 1998 and 1997 was $2,000,000.
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.
- 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.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of the Stockholders' for Farm Fish, Inc., was held May 26,
1998, with election of T. L. Reed, III, Thomas R. Slough, Jr., Leland R.
Speed, Robert Reed Doyle and W. D. Mounger as directors. The annual report
for 1997 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 (attached)
There was no report on Form 8-K for the quarter ended June 30, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
FARM FISH
____________________
(Registrant)
August 10, 1998
_____________ _____________________________
Date Jayne Dew Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 29,766
<SECURITIES> 214,632
<RECEIVABLES> 191,007
<ALLOWANCES> 0
<INVENTORY> 4,938,702
<CURRENT-ASSETS> 5,374,107
<PP&E> 2,063,937
<DEPRECIATION> 133,050
<TOTAL-ASSETS> 7,448,911
<CURRENT-LIABILITIES> 2,966,113
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,448,911
<SALES> 1,773,877
<TOTAL-REVENUES> 1,864,656
<CGS> 1,502,660
<TOTAL-COSTS> 1,633,439
<OTHER-EXPENSES> 130,779
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,933
<INCOME-PRETAX> 202,284
<INCOME-TAX> 81,730
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120,554
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
