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, 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 May 20, 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
March 31, June 30,
1996 1995
----------- -----------
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 1,028,720 $ 1,294,475
Accounts Receivable 5,460,569 6,346,410
Inventories (Note 2) 4,824,829 5,472,000
Other Current Assets 1,936,245 1,412,028
----------- -----------
Total Current Assets 13,250,363 14,524,913
----------- -----------
Property, Plant and Equipment 73,353,924 71,688,171
Less: Accumulated Depreciation 32,766,645 30,639,141
----------- -----------
Net Properties 40,587,279 41,049,030
----------- -----------
Other Assets 26,126,335 27,165,787
----------- -----------
TOTAL ASSETS $79,963,977 $82,739,730
=========== ===========
Liabilities & Stockholders' Equity
Current Liabilities $ 9,508,854 $ 9,534,371
----------- -----------
Long Term Debt 24,220,181 25,539,845
----------- -----------
Other Liabilities and Deferred Credits 4,451,175 4,411,404
----------- -----------
Stockholders' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 40,608,506 42,078,849
----------- -----------
Total Stockholders' Equity 41,783,767 43,254,110
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $79,963,977 $82,739,730
=========== ===========
NOTE: The balance sheet at June 30, 1995 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)
<TABLE>
<CAPTION>
Nine months ended Three months ended
March 31, March 31,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues
Net Sales-Products $16,680,694 $17,511,167 $ 5,407,724 $ 6,531,395
Real Estate and Hotel Operations 16,726,814 15,928,803 5,428,408 5,159,983
Other (including equity in net
loss of affiliated entities) (638,672) 1,084,839 (206,068) 257,534
---------- ---------- ---------- ----------
Total Revenues 32,768,836 34,524,809 10,630,064 11,948,912
---------- ---------- ---------- ----------
Expenses
Cost of Sales 15,471,295 14,431,434 5,022,085 5,573,449
Operating-real estate and hotel 7,831,197 7,506,638 2,684,331 2,545,564
Selling, general & administrative 4,167,179 4,484,149 1,174,551 1,472,414
Depreciation and amortization 2,878,527 2,843,152 978,619 1,009,653
Real estate taxes 2,090,406 1,969,607 678,636 657,666
Interest 2,496,899 2,182,123 808,525 739,935
---------- ---------- ---------- ----------
Total Expenses 34,845,503 33,417,103 11,346,747 11,998,681
---------- ---------- ---------- ----------
(Loss) income before income
taxes and minority interests (2,076,667) 1,107,706 (716,683) (49,769)
Income taxes - Note 3 (285,000) (428,000) (76,000) (106,000)
Minority interests 932,141 362,995 313,927 230,327
---------- ---------- ---------- ----------
Net (Loss) Income $(1,429,526) $ 1,042,701 $ (478,756) $ 74,558
=========== =========== =========== ===========
(Loss) earnings per share:
Net (Loss) income $ (2.12) $ 1.55 $ (.71) $ .11
========== ========== ========== ==========
Average shares outstanding 672,811 673,946 672,305 673,718
</TABLE>
SEE NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net (Loss) Income $(1,429,526) $ 1,042,701
Adjustments to Reconcile Income to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 2,878,527 2,843,152
Minority Interests' Share of Loss in
Subsidiaries (932,141) (362,995)
Changes in Operating Assets and Liabilities:
Decrease (Increase) in Accounts and Other
Receivables 215,841 (971,798)
Decrease (Increase) in Inventories 647,171 (798,832)
Increase in Other Assets (474,217) (1,261,727)
(Decrease) Increase in Accounts Payable (675,517) 59,335
Increase (Decrease) in Other Liabilities 39,771 (25,467)
----------- -----------
NET CASH PROVIDED BY OPERATIONS 269,909 524,369
----------- -----------
INVESTING ACTIVITIES
Purchase of Property Plant and Equipment (2,416,776) (4,100,100)
Investment in and Advances to Affiliated Entities-Net 1,971,593 216,711
Payments Received on Mortgages Receivable 670,000 530,000
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES 224,817 (3,353,389)
----------- -----------
FINANCING ACTIVITIES
Proceeds from Mortgages and Notes Payable 600,000 4,000,000
Payments on Long Term Debt (1,319,664) (1,497,063)
Other Financing Activities (40,817) (14,040)
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NET CASH (USED) PROVIDED BY FINANCING ACTIVITIES (760,481) 2,488,897
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS (265,755) (340,123)
Cash and Cash Equivalents at Beginning of Period 1,294,475 1,316,144
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,028,720 $ 976,021
=========== ===========
</TABLE>
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, 1996 and the
consolidated statements of operations and cash flows for the nine and three
month periods ended March 31, 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 March 31, 1996 and for all
periods presented, have been made.
2. INVENTORIES
March 31, June 30,
1996 1995
---------- ----------
Work-in process and
raw materials $2,046,395 $1,945,308
Finished goods 2,778,434 3,526,692
---------- ----------
$4,824,829 $5,472,000
---------- ----------
3. INCOME TAXES
Nine Months Ended
March 31,
1996 1995
-------- --------
Federal $ -- $150,000
State 285,000 278,000
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$285,000 $428,000
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<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, 1996 decreased by
approximately $1,249. Net cash provided by operating activities was
approximately $270. Net cash used by financing activities was approximately
$760. Net cash of approximately $225 was provided by investing activities.
The Company has a 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, 1996, $3,000 is outstanding under the line of credit. The
term loan, which has an outstanding balance of $7,611 at March 31, 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 revolving
line, which is renewable annually, is due December 31, 1996. The interest rate
on both facilities is one percent in excess of the lender's prime rate.
Results of Operations
Nine months ended March 31, 1996 and 1995
Income from operations before income taxes and minority interests decreased
$3,185. The components are as follows:
(Decrease)
1996 1995 Increase
------- ------- --------
Real Estate $ 3,554 $ 3,583 ($ 29)
Hotel 342 113 229
Seafood (3,281) (499) (2,782)
Textiles (28) 656 (684)
Corporate (2,664) (2,745) 81
------- ------- -------
($2,077) $ 1,108 ($3,185)
------- ------- -------
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues increased $571. A mortgage obtained on January 1, 1995 on the
Jefferson Bank Building in Miami Beach, Florida increased mortgage interest
expense by $119, and due to the unusually cold winter, utility and snow removal
costs increased $390. There were no other significant variations in any other
expense category.
HOTEL
Revenues increased $227 over last year. Hotel earnings increased $229 as a
result of the higher revenues.
SEAFOOD
Revenues increased $1,115 in the current period primarily in sales of
shrimp. Earnings decreased $2,782 for the seafood division due primarily to the
presence of "brown tide" at our clam operation during the summer months which
curtailed production, the lack of availability of scallops for Lambert Seafood
operations, and a substantial reduction in the sales price of shrimp resulting
from a temporary oversupply of product worldwide.
TEXTILES
Hanora Spinning's earnings decreased $211 to $611 for the nine months due
to higher operating costs. Hanora South and J & M Dyers recognized combined
losses of $434 compared to last years profit of $111 due substantially to J & M
Dyers completion of a substantial contract that expired in December 1994.
Whitlock Combing incurred a loss of $255 in the current period as compared to a
loss of $333 last year relating to its property in South Carolina which is being
offered for sale. Overall, textile revenues decreased $1,873 due to reduced
sales at J & M of approximately $1,159, and lower sales at Hanora Spinning due
to an industry-wide slump.
CORPORATE/OTHER
Corporate including the operations of the nursing homes and interest on the
Company's term loan and revolving line of credit remained approximately the
same.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
Three months ended March 31, 1996 and 1995
Income from operations before income taxes and minority interests decreased
$668. The components are as follows:
(Decrease)
1996 1995 Increase
------- ------- --------
Real Estate $ 1,090 $ 1,115 $ (25)
Hotel (18) (110) 92
Seafood (1,005) (493) (512)
Textiles 48 271 (223)
Corporate (832) (832) --
------- ------- -------
$ (717) $ (49) $ (668)
------- ------- -------
REAL ESTATE
Revenues increased $132, but earnings decreased $25 due to approximately
$303 of additional utility and snow removal costs due to the unusually harsh
winter, and lower repairs and maintenance costs of approximately $100.
HOTEL
Hotel earnings increased $92, due to increased revenues of $136. There were
no significant variations in any expense category.
SEAFOOD
Earnings decreased $512 substantially due to increased losses from shrimp
operations in Ecuador and lack of product at Lambert Seafood.
TEXTILES
Earnings decreased $223. Hanora Spinning's earnings decreased $46. Hanora
South and J & M Dyers recognized combined losses of $234 as compared to last
year's loss of $44 due substantially to a decrease in sales volume.
CORPORATE/OTHER
Corporate expenses remained the same.
<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, 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: May 23, 1996 /s/ Norman A. Halper
----------------------------
Norman A. Halper
President
Date: May 23, 1996 /s/ Harry Bergman
----------------------------
Harry Bergman
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,028,720
<SECURITIES> 0
<RECEIVABLES> 5,460,569
<ALLOWANCES> 284,679
<INVENTORY> 4,824,829
<CURRENT-ASSETS> 13,250,363
<PP&E> 73,353,924
<DEPRECIATION> 32,766,645
<TOTAL-ASSETS> 79,963,977
<CURRENT-LIABILITIES> 9,508,854
<BONDS> 24,220,181
0
0
<COMMON> 1,175,261
<OTHER-SE> 40,608,506
<TOTAL-LIABILITY-AND-EQUITY> 79,963,977
<SALES> 16,680,694
<TOTAL-REVENUES> 32,768,836
<CGS> 15,471,295
<TOTAL-COSTS> 16,842,309
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 35,000
<INTEREST-EXPENSE> 2,496,899
<INCOME-PRETAX> (2,076,667)
<INCOME-TAX> 285,000
<INCOME-CONTINUING> (1,429,526)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,429,526)
<EPS-PRIMARY> (2.12)
<EPS-DILUTED> (2.12)
</TABLE>
