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, 1995 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)
Registrant's 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 18, 1995 there were 673,771 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,
1995 1994
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 976,021 $ 1,316,144
Accounts Receivable 6,673,679 6,231,881
Inventories (Note 2) 5,530,377 4,731,545
Other Current Assets 2,957,512 1,695,785
Total Current Assets 16,137,589 13,975,355
Property, Plant and Equipment 73,813,170 69,431,186
Less: Accumulated Depreciation 32,401,587 29,276,551
Net Properties 41,411,583 40,154,635
Other Assets 26,179,922 26,033,638
TOTAL ASSETS $ 83,729,094 $ 80,163,628
Liabilities & Stockholders' Equity
Current Liabilities $ 9,971,609 $ 9,412,274
Long Term Debt 25,873,235 23,870,298
Other Liabilities and Deferred 4,591,873 4,617,340
Credits
Stockholders' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 42,117,116 41,088,455
Total Stockholders' Equity 43,292,377 42,263,716
TOTAL LIABILITIES & STOCKHOLDERS' $ 83,729,094 $ 80,163,628
EQIUTY
NOTE: The balance sheet at June 30, 1994
has been derived from the audited
financial statements at that date
and condensed.
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIALSTATEMENTS
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Nine months ended Three months ended
March 31, March 31,
1995 1994 1995 1994
Revenues
Net Sales-Products $17,511,167 $17,185,284 $6,531,395 $5,787,345
Real Estate and
Hotel operations 15,928,803 15,329,302 5,159,983 4,569,533
Other 1,084,839 2,261,522 257,534 466,499
Total Revenues 34,524,809 34,776,108 11,948,912 10,823,377
Expenses
Cost of Sales 14,431,434 15,128,731 5,573,449 5,184,012
Operating-real estate
and hotel 7,506,638 7,936,364 2,545,564 2,868,280
Selling, general &
administrative 4,484,149 4,818,769 1,472,414 1,453,796
Depreciation and
amortization 2,843,152 2,936,308 1,009,650 1,091,379
Real estate taxes 1,969,607 1,977,386 657,666 589,267
Interest 2,182,123 1,694,663 739,935 523,731
Total Expenses 33,417,103 34,492,221 11,998,681 11,710,465
Income(loss) before
income taxes, minority
interests and
cumulative effect of
change in accounting
for income taxes 1,107,706 283,887 (49,769) (887,088)
Income taxes - Note 3 (428,000) (278,000) (106,000) 28,000
Minority interests 362,995 468,840 230,327 222,038
Income (loss) before
cumulative effect of
accounting change 1,042,701 474,727 74,558 (637,050)
Cumulative effect as
of July 1, 1993
of change in method
of accounting for
income taxes - Note 4 - 1,173,000 - -
Net Income (Loss) $1,042,701 $1,647,727 $ 74,558 $(637,050)
Earnings(loss) per share:
Income(loss) before
cumulative effect
of accounting change $ 1.55 $ .70 $ .11 $ (.94)
Cumulative effect of
accounting change - 1.74 - -
Net Income(Loss) $ 1.55 $ 2.44 $ .11 $ (.94)
Average shares
outstanding 673,946 676,077 673,718 673,307
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,
1995 1994
OPERATING ACTIVITIES
Net Income $ 1,042,701 $ 1,647,727
Adjustments to Reconcile Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 2,843,152 2,936,308
Minority Interests' Share of Loss in
Subsidiaries (362,995) (468,840)
Change in Method of Accounting for
Income Taxes - (1,173,000)
Changes in Operating Assets and Liabilities
(Increase) Decrease in Accounts and Other
Receivables (971,798) 684,154
Increase in Inventories (798,832) (837,795)
Increase in Other Assets (1,261,727) (37,710)
Increase in Accounts Payable 59,335 2,177,009
Increase (Decrease) in Other Liabilities (25,467) 120,311
NET CASH PROVIDED BY OPERATIONS 524,369 5,048,164
INVESTING ACTIVITIES
Purchases of Property Plant and Equipment (4,100,100) (4,686,758)
Investment in and Advances to Affiliated
Entities-Net 216,711 (1,503,824)
Payments Received on Mortgages Receivable 530,000 135,000
NET CASH USED BY INVESTING ACTIVITIES (3,353,389) (6,055,582)
FINANCING ACTIVITIES
Proceeds from Mortgages and Notes Payable 4,000,000 (1,388,201)
(Payments) Proceeds-Long Term Debt (1,497,063) 1,776,206
Other Financing Activities (14,040) (161,388)
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,488,897 226,617
DECREASE IN CASH AND CASH EQUIVALENTS (340,123) (780,801)
Cash and Cash Equivalents at Beginning of
Period 1,316,144 1,504,799
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 976,021 $ 723,998
<PAGE>
SEE NOTES TO CONDENSED 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, 1995 and
the consolidated statements of operations and cash flows for the
nine month periods ended March 31, 1995 and 1994, 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, 1995 and for
all periods presented, have been made.
2. INVENTORIES
March 31, June 30,
1995 1994
Work-in process and
raw materials $ 2,531,462 $ 1,978,575
Finished goods 2,998,915 2,752,970
$ 5,530,377 $ 4,731,545
3. INCOME TAXES
Nine Months Ended
March 31,
1995 1994
Federal $ 150,000 $ 30,000
State 278,000 248,000
$ 428,000 $ 278,000
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 basis 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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN THOUSANDS)
Liquidity and Capital Resources
Working capital for the nine months ended March 31, 1995
increased by approximately $1,603. Net cash provided by
operating activities was approximately $524. Net cash provided
by financing activities was approximately $2,489. Net cash of
approximately $3,353 was used for investing activities.
The company has a $10,000 term loan and a $3,000 revolving line
of credit with its principal lender, collateralized by a mortgage
on the East Newark Industrial Center. At March 31, 1995, $2,600
is outstanding under the line of credit. The term loan, which
has an outstanding balance of $8,278 at March 31, 1995, requires
monthly principal payments of $56 and matures on August 1, 1997
when the remaining unpaid principal balance of $6,667 will become
due. The revolving line, which is renewable annually, is due in
January 1996. The interest rate on both facilities is one percent
in excess of the lender's prime rate.
On November 30, 1994 the Company obtained a $3,500 mortgage loan
collateralized by the Jefferson National Bank building it owns in
Miami Beach, Florida. This loan bears interest at one percent in
excess of the lender's prime rate and provides for 78 payments of
$29 plus interest commencing January 1, 1995 and expiring June 1,
2001 when the remaining unpaid balance of $1,225 will become due.
Results of Operations
Nine months ended March 31, 1995 and 1994
Income from operations before income taxes and minority interests
increased $824. The components are as follows:
(Decrease)
1995 1994 Increase
Real Estate $ 3,583 $ 2,832 $ 751
Hotel 113 175 (62)
Seafood (499) (1,152) 653
Textile 656 (186) 842
Corporate (2,745) (1,385) (1,360)
$ 1,108 $ 284 $ 824
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues increased $823. Increased mortgage interest of
$234 was offset by reduced snow removal costs of $130 and there
were no significant variations in any other expense category.
HOTEL
Revenues decreased $223. Hotel earnings decreased $62 as a
result of the lower revenues.
SEAFOOD
Revenues increased $46 in the current period. Overall
seafood losses decresed $653 for the seafood division due
primarily to increased profits from sales of shrimp which
resulted from higher operting margins.
TEXTILES
Hanora Spinning's earnings increased $166 to $878 for the
year due to higher gross profits. Hanora South and J & M Dyers
recognized combined profits of $111 compared to last years loss
of $415 due to higher revenues and gross profits earned at J & M
as a result of a substantial contract received from a new
customer that expired in December 1994. Whitlock Combing which
sold its equipment and substantially ceased operations in June
1992, incurred a loss of $333 in the current period as compared
to a loss of $485 last year. Overall, textile revenues increased
$542.
CORPORATE
Corporate, which includes the Giftware operations had an
expense of $2,745 as compared to last years expense of $1,385.
The difference is due substantially to income of $1,322
recognized last year when the company terminated a royalty
agreement it had with the purchaser of the Towle Silvermiths
assets.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
(IN THOUSANDS)
Three months ended March 31, 1995 and 1994
Income from operations before income taxes and minority interests
increased $838. The components are as follows:
(Decrease)
1995 1994 Increase
Real Estate $ 1,115 $ 342 $ 773
Hotel (110) (132) 22
Seafood (493) (506) 13
Textile 271 85 186
Corporate (832) (676) (156)
$ (49) $ (887) $ 838
REAL ESTATE
Revenues increased $675. Mortgage interest increased $108,
snow removal costs decreased $125 and there were no significant
variations in any other expense category.
HOTEL
Hotel earnings increased $22, although revenues decreased
$85. This is attributable to $101 of additional management fees
paid last year to the management company that oversees the
operations of the hotel.
SEAFOOD
Although revenues increased $440, earnings increased $13
primarily due to a softening of shrimp operating margins
occurring during the current quarter.
TEXTILES
Earnings increased $186. Hanora Spinning's earnings
increased $96. Hanora South and J & M Dyers incurred combined
losses of $44 as compared to last year's losses of $32. Whitlock
Combing had a $102 decrease in losses. The Whitlock wool combing
plant was closed in June 1992.
CORPORATE
Corporate losses increased $156, due primarily to increased
interest expense of $106 due to higher interest rates.
<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, 1995.
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
Date: May 18, 1995 /s/ Norman A. Halper
Norman A. Halper
President
Date: May 18, 1995 /s/ Harry Bergman
Harry Bergman
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The First Republic Corporation of America
and Subsidiaries
Article 5 FDS - 10Q
At March 31, 1995 and for the nine months then ended
March 31, 1995
</LEGEND>
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