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 SEPTEMBER, 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) 836-5188
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 SEPT. 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
September 30, 1998 and December 31, 1997 1
Consolidated Condensed Statements of Operations
Three Months and Nine Months Ended Sept. 30,
1998 and 1997 2
Consolidated Condensed Statements of Cash Flows
Nine Months Ended Sept. 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
SEPTEMBER 30, 1998 (UNAUDITED) AND DECEMBER 31, 1997
SEPT. 30, DEC. 31,
1998 1997
_________________________
(UNAUDITED) (*NOTE)
ASSETS
CURRENT ASSETS
Cash $ 97,038 $ 50,144
Accounts Receivable 199,915 207,264
Inventories - Note 2 4,963,639 5,067,783
Prepaid Expenses 11,480 11,480
---------- ---------
Total Current Asset 5,272,072 5,336,671
PROPERTY, PONDS, AND EQUIP - NET 2,135,404 2,169,535
OTHER ASSETS 251,994 336,330
---------- ---------
TOTAL ASSETS $7,659,470 $7,842,536
========== ==========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Accounts Payable $ 34,720 $ 11,428
Advances Payable to Shareholder
& Current Maturities 2,858,611 3,309,853
Other Accrued Exp and Payables 242,603 159,011
---------- ---------
TOTAL CURRENT LIABILITIES 3,135,934 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 Sept.
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) (502,576) (663,868)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 4,397,536 4,236,244
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $7,659,470 $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 NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30 SEPT. 30
_____________________ __________________
1998 1997 1998 1997
NET SALES $1,048,290 $ 681,052 $2,822,167 $2,570,522
OTHER INCOME 1,512 0 92,291 0
--------- --------- --------- ---------
1,049,802 681,052 2,914,458 2,570,522
COST AND EXPENSES
Cost of Sales 912,094 596,603 2,414,754 2,059,765
Selling, General, and
Administrative Expenses 69,000 48,888 199,779 163,380
Interest 10,844 12,808 39,777 41,921
--------- --------- --------- ---------
Total Cost and Expense 991,938 658,299 2,654,310 2,265,066
INCOME BEFORE INCOME TAXES 57,864 22,753 260,148 305,456
INCOME TAX EXPENSE (17,126) ( 0) (98,856) (107,428)
--------- --------- --------- ---------
NET INCOME $ 40,738 $ 22,753 $161,292 $198,028
========= ========= ========= ========
NET INCOME PER BASIC AND
DILUTED SHARE $.015 $0.01 $.06 $.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 CASH FLOWS
(UNAUDITED)
FOR NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
NINE MONTHS ENDED
SEPT. 30
______________________
1998 1997
NET CASH PROVIDED BY OPERATING ACTIVITIES $666,080 $ 52,407
INVESTING ACTIVITIES
Purchase of Equipment and Brood Fish (167,944) (22,441)
FINANCING ACTIVITIES
Proceeds from Borrowing 95,000 405,934
Principal Payments on Borrowing (605,000) (505,000)
Advances from Shareholders 58,758 31,641
--------- ---------
NET CASH USED IN FINANCING ACTIVITIES (451,242) (67,425)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 46,894 (37,459)
CASH AND CASH EQUIVALENTS AT BEGINNING 50,144 80,815
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $97,038 $43,356
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 nine-month
period ended September 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:
SEPT. 30, DEC. 31,
1998 1997
on 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:
SEPT. 30, DEC. 31,
1998 1997
_________________________
Live Fish $4,928,585 $5,046,367
Feed and Supplies 35,054 21,416
---------- ----------
TOTAL INVENTORY $4,963,639 $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:
NINE MONTHS ENDED SEPT. 30, 1998, COMPARED TO NINE MONTHS ENDED SEPT. 30, 1997
Sales for the period ending September 30, 1998 were $2,822,167 compared
to $2,570,522 for the same period in 1997.
During the nine month period ended September 30, 1998, Farm Fish, Inc.
made a profit before taxes of $260,148 compared to $305,456 profit
for the same period in 1997.
The price of live fish sold for the period averaged $.768 per pound
compared to $.747 per pound for the same period in 1997.
Cost of Sales was 87.0% of sales for the current period compared to
87.6% of sales for the same period of 1997. The average production
cost of fish for the period was $.6088 per pound compared to $.5406
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.
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 SEPTEMBER 30,1998, COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1997
Net sales for the three months ended September 30, 1998 increased by
$367,238 from 1997. The number of pounds of food fish sold during the
period increased by 567,278 pounds. The average selling price of food
fish during this period increased by $.02 per pound.
Cost of sales increased from 1997 by $315,491 due primarily to an
adjustment for mortality of $62,111. General and Administrative
expenses increased over 1997 by $20,112. 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 September 30, 1998, current assets exceeded current liabilities by
$2,136,139 compared to $1,856,379 for the same period ended December 31,
1997.
Farm Fish, Inc. had an unused line of credit with a local bank as of
September 30, 1998 of $1,405,000. The total line of credit as of
September 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 September 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)
November 4, 1998
_____________ _____________________________
Date Jayne Dew Secretary/Treasurer
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
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<SECURITIES> 251,994
<RECEIVABLES> 199,915
<ALLOWANCES> 0
<INVENTORY> 5,044,598
<CURRENT-ASSETS> 5,593,545
<PP&E> 5,546,196
<DEPRECIATION> 3,491,752
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2,688,605
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<OTHER-EXPENSES> 69,302
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<INCOME-PRETAX> 260,148
<INCOME-TAX> 98,856
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