SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended March 31, 1994 Commission File Number 0-1437
THE FIRST REPUBLIC CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE 13-1938454
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 Fifth Avenue, New York, N.Y. 10001
(Address of principal executive office) (Zip Code)
Registrants telephone number, including area code (212) 279-6100
Former name, former address and former fiscal year, if changed since last
report:
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Sections 13 and 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
As of May 13, 1994 there were 674,307 shares of common stock outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, June 30,
1994 1993
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 723,998 $ 1,504,799
Accounts Receivable 6,687,421 7,259,737
Inventories ( Note 2) 4,619,038 3,781,243
Other Current Assets 3,918,296 4,165,134
Total Current Assets 15,948,296 16,710,913
Property, Plant and Equipment 70,493,549 67,561,477
Less: Accumulated Depreciation 30,962,899 27,679,765
Net Properties 39,530,650 39,881,712
Other Assets 25,872,999 22,229,953
TOTAL ASSETS $ 81,352,402 78,822,578
Liabilities & Shareholders' Equity
Current Liabilities $ 10,728,537 $ 9,939,729
Long Term Debt 24,010,103 22,233,897
Other Liabilities and Deferred Credits 4,968,189 5,776,718
Stockholder' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 40,470,312 39,696,973
Total Stockholders' Equity 41,645,573 40,872,234
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 81,352,402 $ 78,822,578
NOTE: The balance sheet at June 30, 1993
has been derived from the audited
financial statements at that date
and condensed.
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Nine months ended Three months ended
March 31, March 31,
1994 1993 1994 1993
Revenues
Net Sales-Products $17,185,284 $18,351,050 $ 5,787,345 $ 6,017,625
Real Estate and Hotel
operations 15,329,302 15,385,037 4,569,533 4,837,406
Other 2,261,522 820,966 466,499 704,464
Total Revenues 34,776,108 34,557,053 10,823,377 1,559,495
Expenses
Cost of Sales 15,128,731 16,900,909 5,184,012 5,472,347
Operating-real estate
and hotel 7,936,364 7,195,856 2,868,280 2,392,930
Selling, general &
administrative 4,818,769 5,158,091 1,453,796 1,658,579
Depreciation and
amortization 2,936,308 3,018,802 1,091,379 1,004,667
Real estate taxes 1,977,386 1,928,555 589,267 675,160
Interest 1,694,663 1,563,986 523,731 489,268
Total Expenses 34,492,221 35,766,199 11,710,465 11,692,951
Income (loss) before
income taxes, minority
interests and cumulative
effect of change in
accounting for income
taxes 283,887 (1,209,146) (887,088) (133,456)
Minority interests 468,840 99,449 222,038 28,369
Income taxes - Note 3 (278,000) (150,000) 28,000 30,000
Income (loss) before
cumulative effect of 474,727 (1,259,697) (637,050) (75,087)
accounting change
Cumulative effect as of
June 30, 1993 of change
in method of accounting
for income taxes -
Note 4 460,000 - - -
Net Income (Loss) $ 934,727 $(1,259,697) $ (637,050) $ (75,097)
Earnings (loss ) per share:
Income (loss) before
cumulative effect of $ .70 $ (1.84) $ (.94) $ (.11)
accounting change
Cumulative effect of
accounting change .68 - - -
Net Income (Loss) $ 1.38 $ (1.84) $ (.94) $ (.11)
Average shares
outstanding 676,077 685,223 674,307 682,156
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
Nine Months Ended
March 31,
1994 1993
OPERATING ACTIVITIES
Net Income (Loss) $ 934,727 $(1,259,697)
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 2,936,308 3,018,802
Minority Interests' share of Loss in
Subsidiaries (468,840) (99,449)
Equity Loss on Disposal of Assets - 1,279,000
Change in Method of Accounting for Income Taxes (460,00) -
Changes in Operating Assets and Liabilities:
Decrease (Increase) in Accounts and Other
Receivables 684,154 (137,660)
Increase in Inventories (837,795) (702,904)
(Increase) Decrease in Other Assets (37,710) 789,268
Increase (Decrease) in Accounts Payable 2,177,009 (893,408)
Increase in Other Liabilities 120,311 12,225
NET CASH PROVIDED BY OPERATIONS 5,048,164 2,006,177
INVESTING ACTIVITIES
Purchases of Property Plant and Equipment (4,686,758) (2,187,439)
Investment In and Advances to Partnership (1,503,824) (2,135,326)
Payments Received on Mortgages Receivable 135,000 231,477
NET CASH USED BY INVESTING ACTIVITIES (6,055,582) (4,091,288)
FINANCING ACTIVITIES
(Payments) Proceeds on Mortgages and Notes (1,388,201) 781,930
Payable
Proceeds on Long Term Debt 1,776,206 1,325,291
Other Financing Activities (161,388) (333,418)
NET CASH PROVIDED BY
FINANCING ACTIVITIES 226,617 1,773,803
DECREASE IN CASH AND CASH EQUIVALENTS (780,801) (311,308)
Cash and Cash Equivalents at Beginning of Period 1,504,799 1,491,462
CASH AND CASH EQUIVALENTS AT THE END OF PERIOD $ 723,998 $ 1,180,154
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of March 31, 1994, the consolidated
statements of operations for the nine month periods ended March 31, 1994 and
1993, and the condensed consolidated statement of cash flows for the nine month
periods then ended have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at March 31, 1994 and for all periods presented, have
been made.
2. INVENTORIES
March 31, June 30,
1994 1993
Work-in process and
raw materials $ 2,218,315 $ 1,845,245
Finished goods 2,400,723 1,935,998
$ 4,619,038 $ 3,781,243
3. INCOME TAXES
Nine Months Ended
March 31,
1994 1993
Federal $ 30,000 $ 50,000
State 248,000 100,000
$ 278,000 $ 150,000
4. CHANGE IN METHOD OF ACCOUNTING FOR INCOME TAXES
Effective July 1, 1993, the Company adopted FASB Statement No. 109, "Accounting
for Income Taxes." Under Statement 109, the liability method is used in
accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the differences are expected to reverse.
Prior to the adoption of Statement 109, income tax expense was determined using
the deferred method. Deferred tax expense was based on items of income and
expense that were reported in different years in the financial statements and
tax returns and were measured at the tax rate in effect in the year the
difference originated.
As permitted by Statement 109, the Company has elected not to restate the
financial statements of any prior years. The effect of the change on pretax
income from operations for the nine months ended March 31, 1994 was not
material; however, the cumulative effect of the change increased net income by
$460,000 or $.68 per share.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
(IN THOUSANDS)
Liquidity and Capital Resources
Working capital for the nine months ended March 31, 1994 decreased by approxi-
mately $1,551. Net cash provided by operating activities was approximately
$5,048. Net cash provided by financing activities was approximately $227. Net
cash of approximately $6,056 was used for investing activities.
The Company has a $3,000 revolving line of credit ($1,000 utilized as of March
31, 1994) which bears interest at 1 percent above the lenders prime rate, and
is collateralized by a mortgage on the East Newark Industrial Center.
On February 8, 1994 the Company obtained a $3,000 mortgage loan on the Greens-
boro South Shopping Center it owns in Greensboro, North Carolina, which loan
bears interest at the rate of 8 and one half per annum, is self-liquidating,
and provides for monthly payments of $29, including principal and interest,
commencing April 1, 1994 and expiring March 1, 2009.
Results of Operations
Nine months ended March 31, 1994 and 1993
Income from operations before income taxes and minority interests increased
$1,493. The components are as follows:
(Decrease)
1994 1993 Increase
Real Estate $2,832 $ 3,110 $ (278)
Hotel 175 551 (376)
Seafood (1,152) 199 (1,351)
Textile (186) (1,257) 1,071
Corporate (1,385) (3,812) 2,427
$ 284 $(1,209) $ 1,493
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues increased $180. Due to the unusually harsh winter, utility and
snow removal costs increased $213, there were no other significant variations
in any expense category.
HOTEL
There was a $172 decrease in revenues, and hotel earnings decreased $376
due substantially to the lower revenues, and $101 of additional fees paid to
the management company that oversees the operations of the hotel in connection
the renewal of the existing management contract.
SEAFOOD
Revenues decreased $722 primarily in the sale of shrimp. Sales of
shrimp produced in Ecuador decreased approximately $1,700 and were offset by
the importation of shrimp from Costa Rica of approximately $1,000 which were
marginally profitable. Earnings decreased $1,351 for the entire seafood
division due primarily to reduced revenues attributable to Ecuador.
TEXTILES
Hanora Spinning's earnings increased $348 to $713 for the nine months
due to higher revenues and operating margins. Hanora South and J & M Dyers
incurred combined losses of $415 as compared to losses in the comparable
period last year of $673. Whitlock Combing which sold its equipment and
substantially ceased operations in June 1992, incurred a loss of $485 in the
current period as compared to a loss of $950 last year. Overall, textile
revenues increased $578.
CORPORATE
Corporate losses decreased $2,427 attributable primarily to i) the
termination of a royalty agreement with the purchaser of the Towle
Silversmiths assets in the current period which resulted in $1,322 of income
and ii) a loss of approximately $1,029 attributable to losses incurred in
the prior period by a seafood company in which the company has a 50% equity
investment as compared to a break even level of operations in the current
period.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
Three months ended March 31, 1994 and 1993
Loss before income taxes and minority interests increased $754.
The components are as follows:
(Decrease)
1994 1993 Increase
Real Estate $ 342 $ 821 $ (479)
Hotel (132) 66 (198)
Seafood (506) (56) (450)
Textile 85 (60) 145
Corporate (676) (904) 228
$ (887) $ (133) $ (754)
REAL ESTATE
Revenues decreased $72. Utility and snow removal costs increased $193,
repairs and maintenance costs increased $165.
HOTEL
Hotel earnings decreased $198, due to an approximately 10 percent
decrease in revenues, and $101 of additional management fees.
SEAFOOD
Earnings decreased $450 primarily due to losses from shrimp operations
in Ecuador.
TEXTILES
Hanora Spinning's earnings increased $5. Hanora South and J & M Dyers
incurred combined losses of $32 as compared to last year's losses of $105.
Losses are continuing in these operations as a result of the loss of their
major customer in fiscal 1990. Whitlock Combing had a $67 decrease in losses
due mainly to the closing of the wool combing plant last year.
CORPORATE
Corporate losses decreased $228, due primarily to a gain of
approximately $300 recognized as a result of gains by the nursing homes in
which the company has a 50% equity investment.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.
Exhibits: None
Reports: There were no reports on Form 8-K filed during the
quarter ended March 31, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
The First Republic Corporation of America
Registrant
Date: May 18, 1994 /s/ Norman A. Halper
Norman A. Halper
President
Date: May 18, 1994 /s/ Harry Bergman
Harry Bergman
