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 September 30, 1996 Commission File Number 0-1437
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THE FIRST REPUBLIC CORPORATION OF AMERICA
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(Exact name of registrant as specified in its charter)
DELAWARE 13-1938454
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
302 Fifth Avenue, New York, NY 10001
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (212) 279-6100
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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 November 15, 1996, there were 672,269 shares of common stock outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, June 30,
1996 1996
------------- -----------
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 1,234,848 $ 1,009,079
Accounts Receivable 5,079,770 5,520,779
Inventories (Note 2) 4,885,449 4,921,283
Other Current Assets 2,957,518 2,208,548
----------- -----------
Total Current Assets 14,157,585 13,659,689
----------- -----------
Property, Plant and Equipment 72,182,763 72,076,477
Less: Accumulated Depreciation 31,962,329 32,149,238
----------- -----------
Net Properties 40,220,434 39,927,239
----------- -----------
Other Assets 26,278,133 25,652,062
----------- -----------
TOTAL ASSETS $80,656,152 $79,238,990
=========== ===========
Liabilities & Stockholders' Equity
Current Liabilities $15,393,164 $10,659,740
----------- -----------
Long Term Debt 20,750,740 23,809,823
----------- -----------
Other Liabilities and Deferred Credits 4,324,623 4,323,738
----------- -----------
Stockholders' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 39,012,364 39,270,428
----------- -----------
Total Stockholders' Equity 40,187,625 40,445,689
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $80,656,152 $79,238,990
=========== ===========
NOTE: The balance sheet at June 30, 1996 has been derived from the audited
financial statements at that date and condensed.
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three months ended
September 30,
1996 1995
---- ----
Revenues
Net Sales-Products $ 4,965,357 $ 6,209,170
Real Estate and Hotel Operations 5,538,275 5,627,748
Other (including equity in net
loss of affiliated entities) 84,114 (235,953)
------------ ------------
Total Revenues 10,587,746 11,600,965
------------ ------------
Expenses
Cost of Sales 4,530,919 5,547,348
Operating-real estate and hotel 2,753,175 2,492,563
Selling, general & administrative 1,342,462 1,606,421
Depreciation and amortization 851,304 946,839
Real estate taxes 665,184 661,373
Interest 824,680 855,103
------------ ------------
Total Expenses 10,967,724 12,109,647
------------ ------------
Loss before income
taxes and minority interests (379,978) (508,682)
Income taxes - Note 3 (110,000) (115,000)
Minority interests 231,915 298,750
------------ ------------
Net Loss $ (258,063) $ (324,932)
============ ============
Loss per share:
Net Loss $ (.38) $ (.48)
============ ============
Average shares outstanding 672,269 673,338
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three months ended
September 30,
1996 1995
---- ----
OPERATING ACTIVITIES
Net Loss $ (258,063) $ (324,932)
Adjustments to Reconcile Loss to Net
Cash Used by Operating Activities:
Depreciation and Amortization 851,304 946,839
Minority Interests' Share of Loss in
Subsidiaries (231,915) (298,750)
Changes in Operating Assets and Liabilities:
Decrease (Increase) in Accounts and Other
Receivables 430,463 (118,511)
Decrease (Increase) in Inventories 35,834 (45,144)
Increase in Other Assets (748,970) (222,592)
Decrease in Accounts Payable (277,722) (40,943)
Increase (Decrease) in Other Liabilities 885 (1,867)
----------- -----------
NET CASH USED BY OPERATIONS (198,184) (105,900)
----------- -----------
INVESTING ACTIVITIES
Purchase of Property Plant and Equipment (1,144,499) (529,113)
Investment in and Advances to Affiliated
Entities-Net (394,156) 171,030
Payments Received on Mortgages Receivable 10,546 351,348
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (1,528,109) (6,735)
----------- -----------
FINANCING ACTIVITIES
Proceeds from Mortgages and Notes Payable to Banks 5,200,000 300,000
Payments on Mortgages and Notes Payable to Banks (3,247,938) (342,151)
Other Financing Activities -- (19,664)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING
ACTIVITIES 1,952,062 (61,815)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 225,769 (174,450)
Cash and Cash Equivalents at Beginning of Period 1,009,079 1,294,475
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,234,848 $ 1,120,025
=========== ===========
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
4
<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 September 30, 1996 and the
consolidated statements of operations and cash flows for the three month periods
ended September 30, 1996 and 1995, 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 September 30, 1996 and for all period
presented, have been made.
2. INVENTORIES
September 30, June 30,
1996 1995
---- ----
Work-in process and
raw materials $1,828,154 $1,655,147
Finished goods 3,057,295 3,266,136
---------- ----------
$4,885,449 $4,921,283
========== ==========
3. INCOME TAXES
Three Months Ended
September 30,
1996 1995
---- ----
Federal $ -- $ --
State 110,000 115,000
--------- ---------
$ 110,000 $ 115,000
========= =========
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN THOUSANDS)
Liquidity and Capital Resources
Working capital for the three months ended September 30, 1996 decreased by
approximately $4,236 due to the classification of the Company's term loan which
matures on August 1, 1997 as a current liability. Net cash used by operating
activities was approximately $198. Net cash provided by financing activities was
approximately $1,952. Net cash of approximately $1,528 was used for investing
activities.
On July 29, 1996 the Company obtained a $4,000 mortgage loan collateralized by
the Greensboro North Shopping Center in Greensboro, North Carolina. This loan
bears interest at 8.35% per annum and provides for monthly payments of $36
including principal and interest commencing September 1, 1996 through August 1,
2006 when the remaining unpaid balance of $2,523 will become due.
The Company has a $10,000 term loan and a $2,000 revolving line of credit with
its principal lender, collateralized by a mortgage on the East Newark Industrial
Center. At September 30, 1996, $1,200 is outstanding under the line of credit.
The term loan, which has an outstanding balance of $7,278 at September 30, 1996,
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 Company
presently intends to renew this loan. The revolving line, which is renewable
annually, is due in January 1997. The interest rate on both facilities is one
percent in excess of the lender's prime rate.
Results of Operations
Three months ended September 30, 1996 and 1995
Income from operations before income taxes and minority interest increased $129.
The components are as follows:
(Decrease)
1996 1995 Increase
---- ---- --------
Real Estate $ 935 $ 1,210 $(275)
Hotel 171 221 (50)
Seafood (636) (979) 343
Textiles 13 94 (81)
Corporate (863) (1,055) 192
----- ------- -----
$(380) $ (509) $ 129
===== ======= =====
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues decreased $25. A mortgage obtained on July 29, 1996 on the
Greensboro North Shopping Center in Greensboro, North Carolina increased
mortgage interest expense by $58, and repairs and maintenance increased $221.
There were no other significant variations in any expense category.
HOTEL
Revenues decreased $64 over last year. Hotel earnings decreased $50 as a
result of the lower revenues.
SEAFOOD
Revenues decreased $117 in the current period. Losses are continuing in the
seafood division due primarily to curtailed production at our clam operation,
the lack of availability of scallops for Lambert Seafood operations, and
continuing losses in Ecuador due to lower than anticipated shrimp production.
Losses in Ecuador were $292 this year as compared to last year's loss of $574
due to higher yields from our shrimp ponds.
TEXTILES
Hanora Spinning's earnings decreased $58 to $223 for the quarter due to
lower revenues. Hanora South and J & M Dyers recognized combined losses of $162
compared to last year's loss of $85 due to lower revenues. Whitlock Combing
incurred a loss of $48 in the current period as compared to a loss of $102 last
year relating to its property in South Carolina which is being offered for sale.
Overall, textile revenues decreased $1,127.
CORPORATE/OTHER
Corporate expenses including the operations of the nursing homes and
interest on the Company's term loan and revolving line of credit was reduced by
$200 as a result of the settlement of a lawsuit instituted by the Company.
7
<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 September 30, 1996.
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: November 15, 1996 /s/ Norman A. Halper
----------------------------------------
Norman A. Halper
President
Date: November 15, 1996 /s/ Harry Bergman
----------------------------------------
Harry Bergman
Treasurer
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,234,848
<SECURITIES> 0
<RECEIVABLES> 5,290,115
<ALLOWANCES> 210,345
<INVENTORY> 4,885,449
<CURRENT-ASSETS> 14,157,585
<PP&E> 72,182,763
<DEPRECIATION> 31,962,329
<TOTAL-ASSETS> 80,656,152
<CURRENT-LIABILITIES> 15,393,164
<BONDS> 20,750,740
0
0
<COMMON> 1,175,261
<OTHER-SE> 39,012,364
<TOTAL-LIABILITY-AND-EQUITY> 80,656,152
<SALES> 4,965,357
<TOTAL-REVENUES> 10,587,746
<CGS> 4,530,919
<TOTAL-COSTS> 5,612,125
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 824,680
<INCOME-PRETAX> (379,978)
<INCOME-TAX> 110,000
<INCOME-CONTINUING> (258,063)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (258,063)
<EPS-PRIMARY> (.38)
<EPS-DILUTED> (.38)
</TABLE>
