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 December 31, 1993 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 February 9, 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
December 31, June 30,
1993 1993
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 734,255 $ 1,504,799
Accounts and Other Receivables 6,401,410 7,259,737
Inventories (Note 2) 4,183,840 3,781,243
Other Current Assets 4,685,242 4,165,134
Total Current Assets 16,004,747 16,710,913
Property Plant and Equipment 68,702,301 67,561,477
Less: Accumulated Depreciation 28,910,122 27,679,765
Net Properties 39,792,179 39,881,712
Other Assets 23,773,789 22,229,953
TOTAL ASSETS $ 79,570,715 $ 78,822,578
Liabilities & Stockholder's Equity
Current Liabilities $ 10,968,878 $ 9,939,729
Long Term Debt 21,379,656 22,233,897
Other Liabilities and Deferred
Credits 4,939,558 5,776,718
Stockholders' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 41,107,362 39,696,973
Total Stockholder's Equity 42,282,623 40,872,234
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 79,570,715 $ 78,822,578
NOTE: The balance sheet at June 30, 1993
has been derived and condensed from
the audited financial statements at
that date.
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended Three months ended
December 31, December 31
1993 1992 1993 1992
<S> <C> <C> <C> <C> <C>
Revenues
Net Sales-Products $11,397,939 $12,333,425 $ 4,732,567 $ 5,705,204
Real Estate and Hotel
operations 10,759,769 10,547,631 5,717,351 5,026,888
Other 1,795,023 116,501 75,401 (254,301)
Total Revenues 23,952,731 22,997,557 10,525,319 10,447,791
Expenses
Cost of Sales 9,944,719 11,428,562 4,328,552 5,510,281
Operating-real estate and
hotel 5,068,084 4,802,926 2,650,143 2,345,816
Selling, general &
administrative 3,364,973 3,499,512 1,793,412 1,800,701
Depreciation and
amortization 1,844,929 2,014,135 875,750 934,976
Real estate taxes 1,388,119 1,253,395 788,617 629,977
Interest 1,170,932 1,074,718 594,531 544,567
Total Expenses 22,781,756 24,073,248 11,031,005 11,766,318
Income (loss) before
income taxes, minority
interests and cumulative
effect of change in
accounting for income
taxes 1,170,975 (1,075,691) (505,686) (1,288,527)
Income taxes - Note 3 (306,000) (180,00) 31,000 (30,000)
Minority interests 246,802 71,080 174,047 60,667
Income (loss) before
cumulative of accounting
change 1,111,777 (1,184,611) (300,639) (1,257,860)
Cumulative effect as of
June 30, 1993 of change
in method of accounting
for income taxes -
Note 4 460,000 - -
-
Net Income (Loss) $ 1,571,777 $(1,184,611) $ (300,639) $(1,257,860)
Earnings (loss) per share:
Income before cumulative
effect of accounting
change $ 1.64 $ (1.73) $ (.44) $ (1.83)
Cumulative effect of
accounting change .68 - - -
Net Income (Loss) $ 2.32 $ (1.73) $ (.44) $ (1.83)
Average shares
outstanding 676,943 686,723 676,492 686,445
</TABLE>
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Six Months Ended
December 31,
<S> <C> <C>
1993 1992
OPERATING ACTIVITIES
Net Income (Loss) $ 1,571,777 $(1,184,611)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 1,844,929 2,014,135
Minority Interest's share of Loss in
Subsidiaries (246,802) (71,080)
Equity Loss on Disposal of Assets - 1,279,000
Change in Method of Accounting for Income Taxes (460,000) -
Changes in Operating Assets and Liabilities
Decrease (Increase) in Accounts and Other
Receivables 248,219 (41,760)
Increase in Inventories (402,597) (270,150)
Increase in Other Assets (843,836) (477,943)
Increase (Decrease) in Accounts Payable 272,750 (78,108)
(Decrease) Increase in Other Liabilities (130,358) 66,901
NET CASH PROVIDED BY OPERATIONS 1,854,082 1,236,384
INVESTING ACTIVITIES
Purchase of Property Plant and Equipment (1,755,396) (1,256,845)
Investment In and Advances to Partnership (700,000) (2,294,279)
Payments Received on Mortgages Receivable 90,000 90,165
NET CASH USED BY INVESTING ACTIVITIES (2,365,396) (3,460,959)
FINANCING ACTIVITIES
Proceeds on Mortgages and Notes Payable 756,399 690,023
(Payments) Proceeds on Long Term Debt (854,241) 1,493,213
Other Financing Activities (161,388) (178,348)
NET CASH (USED) PROVIDED BY
FINANCING ACTIVITIES (259,230) 2,004,888
NET DECREASE IN CASH AND CASH EQUIVALENTS (770,544) (219,687)
Cash and Cash Equivalents at Beginning of
Period 1,504,799 1,491,462
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 734,255 $ 1,271,775
</TABLE>
<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 December 31, 1993,
the consolidated statements of operations for the six month periods ended
December 31, 1993 and 1992, and the condensed consolidated statement of
cash flows for the six 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 December 31, 1993
and for all periods presented, have been made.
2. INVENTORIES
December 31, June 30,
1993 1993
Work-in process and
raw materials $ 1,863,179 $ 1,845,245
Finished goods 2,320,661 1,935,998
$ 4,183,840 $ 3,781,243
3. INCOME TAXES
Six Months Ended
December 31,
1993 1992
Federal $ - $ 100,000
State 306,000 80,000
$ 306,000 $ 180,000
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 six months ended
December 31, 1993 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 six months ended December 31, 1993
decreased by approximately $1,735. Net cash provided by operating
activities was approximately $1,854. Net cash used by financing activities
was approximately $259. Net cash of approximately $2,365 was used for
investing activities.
Results of Operations
Six months ended December 31, 1993 and 1992
Income from operations before income taxes and minority interests
increased $2,247. The components are as follows:
(Decrease)
1993 1992 Increase
Real Estate $2,490 $ 2,289 $ 201
Hotel 307 485 (178)
Seafood (646) 255 (901)
Textiles (271) (1,197) 926
Corporate (709) (2,908) 2,199
$1,171 $(1,076) $ 2,247
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues increased $252. There were no significant
variations in any expense category.
HOTEL
There was a $140 decrease in revenues, and hotel earnings
decreased $178 as a result of the lower revenues.
SEAFOOD
Revenues decreased $738 primarily in the sale of shrimp.
Earnings decreased $901 for the entire seafood division due primarily to
reduced revenues from sales of shrimp which resulted from declining shrimp
production in Ecuador.
TEXTILES
Hanora Spinning's earnings increased $344 to $390 for the six
months due to higher revenues and operating margins. Hanora South and J & M
Dyers incurred combined losses of $383 as compared to losses in the
comparable period last year of $568. Whitlock Combing which sold its
equipment and substantially ceased operations in June 1992, incurred a loss
of $278 in the current period as compared to a loss of $676 last year.
Overall, revenues increased $455.
CORPORATE
Corporate losses decreased $2,199 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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
Three months ended December 31, 1993 and 1992
Loss before income taxes and minority interests decreased $783.
The components are as follows:
(Decrease)
1993 1992 Increase
Real Estate $ 1,366 $ 1,039 $ 327
Hotel 186 233 (47)
Seafood (609) 131 (740)
Textiles (318) (780) 462
Corporate (1,131) (1,912) 781
$ (506) $(1,289) $ 783
REAL ESTATE
Revenues increased $582. There were no significant
variations in any expense category.
HOTEL
Hotel earnings decreased $47, on an approximate 2
percent increase in revenues.
SEAFOOD
Earnings decreased $740 primarily due to losses from
shrimp operations in Ecuador.
TEXTILES
Losses decreased $462. Hanora Spinning's earnings increased
$103. Hanora South and J & M Dyers incurred combined losses of $267 as
compared to last year's losses of $346. Losses are continuing in these
operations as a result of the loss of their major customer in fiscal 1990.
Whitlock Combing had a $281 decrease in losses due mainly to the closing of
the wool combing plant last year.
CORPORATE
Corporate losses decreased $781, due primarily to a loss of
approximately $1,029 recognized last year as a result of losses incurred
by a seafood company 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 December 31, 1993.
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: February 16, 1994 /s/ Norman A. Halper
Norman A. Halper
President
Date: February 16, 1994 /s/ Harry Bergman
Harry Bergman
Treasurer
