SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For Quarter Ended December 31, 1996 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
or incorporation or organization) Identification No.)
302 Fifth Avenue, New York, NY 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 February 24, 1997, there were 672,084 shares of common stock outstanding.
1
<PAGE>
PART I. FINANCIAL INFORMATION
THE FIRST REPUBLIC CORPORATION OF AMERICA
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, June 30,
1996 1996
------------ ----------
(UNAUDITED) (SEE NOTE
BELOW)
Assets
Current Assets
Cash and Cash Equivalents $ 1,461,712 $ 1,009,079
Accounts Receivable 4,383,432 5,520,779
Inventories (Note 2) 5,196,769 4,921,283
Other Current Assets 2,116,167 2,208,548
----------- -----------
Total Current Assets 13,158,080 13,659,689
----------- -----------
Property, Plant and Equipment 73,194,969 72,076,477
Less: Accumulated Depreciation 32,676,450 32,149,238
----------- -----------
Net Properties 40,518,519 39,927,239
----------- -----------
Other Assets 26,967,337 25,652,062
----------- -----------
TOTAL ASSETS $80,643,936 $79,238,990
=========== ===========
Liabilities & Stockholders' Equity
Current Liabilities $15,983,195 $10,659,740
----------- -----------
Long Term Debt 20,381,466 23,809,823
----------- -----------
Other Liabilities and Deferred Credits 3,756,988 4,323,738
----------- -----------
Stockholders' Equity:
Common Stock 1,175,261 1,175,261
Other Stockholders' Equity 39,347,026 39,270,428
----------- -----------
Total Stockholders' Equity 40,522,287 40,445,689
----------- -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $80,643,936 $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)
<TABLE>
<CAPTION>
Six months ended Three months ended
December 31, December 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Net Sales-Products $ 10,249,759 $ 11,272,970 $ 5,284,402 $ 5,063,800
Real Estate and Hotel Operations 11,381,394 11,298,406 5,843,119 5,670,658
Other (including equity in net
loss of affiliated entities) 361,284 (432,604) 277,170 (196,651)
------------ ------------ ------------ ------------
Total Revenues 21,992,437 22,138,772 11,404,691 10,537,807
------------ ------------ ------------ ------------
Expenses
Cost of Sales 9,252,575 10,449,210 4,721,656 4,901,862
Operating-real estate and hotel 5,651,866 5,146,866 2,898,691 2,654,303
Selling, general & administrative 2,669,553 2,992,628 1,327,091 1,386,207
Depreciation and amortization 1,728,821 1,899,908 877,517 953,069
Real estate taxes 1,322,738 1,321,770 657,554 660,397
Interest 1,669,024 1,688,374 844,344 833,271
------------ ------------ ------------ ------------
Total Expenses 22,294,577 23,498,756 11,326,853 11,389,109
------------ ------------ ------------ ------------
(Loss) Income before income
taxes and minority interests (302,140) (1,359,984) 77,838 (851,302)
Income taxes - Note 3 (264,000) (209,000) (154,000) (94,000)
Minority interests 648,719 618,214 416,804 319,464
------------ ------------ ------------ ------------
Net Income (Loss) $ 82,579 $ (950,770) $ 340,642 $ (625,838)
============ ============ ============ ============
Income (Loss) per share:
Net Income (Loss) $ .12 $ (1.41) $ .50 $ (.93)
============ ============ ============ ============
Average shares outstanding 672,250 673,061 672,232 672,783
</TABLE>
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)
<TABLE>
<CAPTION>
Six Months Ended
December 31,
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) $ 82,579 $ (950,770)
Adjustments to Reconcile Income (Loss) to Net
Cash Provided by Operating Activities:
Depreciation and Amortization 1,728,821 1,899,908
Minority Interests' Share of Loss in
Subsidiaries (648,719) (618,214)
Changes in Operating Assets and Liabilities:
Decrease in Accounts and Other Receivables 516,801 79,015
(Increase) decrease in Inventories (275,486) 421,806
Decrease (increase) in Other Assets 92,381 (830,327)
(Decrease) increase in Accounts Payable (221,025) 157,546
(Decrease) increase in Other Liabilities (566,750) 106,756
----------- -----------
CASH PROVIDED BY OPERATIONS 708,602 265,720
----------- -----------
INVESTING ACTIVITIES
Purchase of Property Plant and Equipment (2,320,101) (1,166,297)
Investment in and Advances to Affiliated Entities-Net (666,557) 913,609
Payments Received on Mortgages Receivable 620,546 591,630
----------- -----------
NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (2,366,112) 338,942
----------- -----------
FINANCING ACTIVITIES
Proceeds from Mortgages and Notes Payable to Banks 6,700,000 600,000
Payments on Mortgages and Notes Payable to Banks (4,583,877) (983,156)
Other Financing Activities (5,980) (38,804)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 2,110,143 (421,960)
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS 452,633 182,702
Cash and Cash Equivalents at Beginning of Period 1,009,079 1,294,475
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,461,712 $ 1,477,177
=========== ===========
</TABLE>
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 December 31, 1996 and the
consolidated statements of operations and cash flows for the six month periods
ended December 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 December 31, 1996 and for all periods
presented, have been made.
2. INVENTORIES
December 31, June 30,
1996 1996
---- ----
Work-in process and
raw materials $1,728,929 $1,655,147
Finished goods 3,467,840 3,266,136
---------- ----------
$5,196,769 $4,921,283
---------- ----------
3. INCOME TAXES
Six Months Ended
December 31,
1996 1995
---- ----
State $264,000 $ 209,000
-------- ---------
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(IN THOUSANDS)
Liquidity and Capital Resources
Working capital for the six months ended December 31, 1996 decreased by
approximately $5,825 due to the classification of the Company's term loan which
matures on August 1, 1997 as a current liability. Accordingly as of December 31,
1996 there was a working capital deficiency of $2,825. However, the Company
expects that the deficiency will be eliminated as a result of the renewal of its
term loan. Net cash provided by operating activities was approximately $709. Net
cash provided by financing activities was approximately $2,110. Net cash of
approximately $2,366 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 December 31, 1996, $1,900 is outstanding under the line of credit.
The term loan, which has an outstanding balance of $7,111 at December 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 Company
presently intends to renew this loan. The revolving line, which is renewable
annually, is due on August 1, 1997. The interest rate on both facilities is one
percent in excess of the lender's prime rate.
Results of Operations
Six months ended December 31, 1996 and 1995
Income from operations before income taxes and minority interests increased
$1,058. The components are as follows:
(Decrease)
1996 1995 Increase
---- ---- ---------
Real Estate $ 2,517 $ 2,464 $ 53
Hotel 312 360 (48)
Seafood (1,290) (2,276) 986
Textiles (14) (76) 62
Corporate (1,827) (1,832) 5
------- ------- -------
$ (302) $(1,360) $ 1058
------- ------- -------
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS--CONTINUED
(IN THOUSANDS)
REAL ESTATE
Revenues increased $140. A gain of $362 was realized when a balloon payment
on a mortgage receivable was paid in December 1996. A mortgage obtained on July
29, 1996 on the Greensboro North Shopping Center in Greensboro, North Carolina
increased mortgage interest expense by $95, and repairs and maintenance
increased $382. There were no other significant variations in any expense
category.
HOTEL
Revenues decreased $57 over last year. Hotel earnings decreased $48 as a
result of the lower revenues.
SEAFOOD
Revenues decreased $601. Losses are continuing in the seafood division due
primarily to curtailed production at our clam operation due to smaller harvests
of product, 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 $750 this year as compared to last years loss
of $1,299 due to higher yields from our shrimp ponds. Losses at Lambert for this
period were $200 as compared to $300 last year and the Company re-started
scallop operations in January 1997. Profits on sales of shrimp imported from
Costa Rica improved $65 on lower sales volume.
TEXTILES
Hanora Spinning's earnings increased $18 to $305 for the year due to higher
operating margins. Hanora South and J & M Dyers recognized combined losses of
$224 compared to last years loss of $200 due to lower revenues. Whitlock Combing
incurred a loss of $95 this year as compared to a loss of $163 last year
relating to its property in South Carolina which is being offered for sale.
Overall, textile revenues decreased $422.
CORPORATE/OTHER
Corporate expenses which includes the operations of the nursing homes and
interest on the Company's term loan and revolving line of credit decreased by
$5.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION - CONTINUED
(IN THOUSANDS)
Three months ended December 31, 1996 and 1995
Income from operations before income taxes and minority interests increased
$929. The components are as follows:
(Decrease)
1996 1995 Increase
---- ---- ----------
Real Estate $1,582 $ 1,254 $ 328
Hotel 141 139 2
Seafood (654) (1,297) 643
Textiles (27) (170) 143
Corporate (964) (777) (187)
------ ------- -----
$ 78 $ 851 $ 929
------ ------- -----
REAL ESTATE
Revenues increased $165. Interest on the Greensboro North Shopping Center
increased $37, repairs and maintenance increased $161 and a gain of $362 was
recognized from a balloon payment on a mortgage.
HOTEL
Hotel earnings increased $2. There were no significant variations in any
expense category.
SEAFOOD
Losses decreased $643 substantially due to higher yields in shrimp ponds in
Ecuador, reduced losses in scallops and increased profitability on sales of
shrimp from Costa Rica.
TEXTILES
Earnings increased $143. Hanora Spinning's earnings increased $76. Hanora
South and J & M Dyers recognized combined losses of $62 as compared to last
year's loss of $115. Whitlock Combing had a $13 decrease in losses due to the
closing of the wool combing plant in June 1992.
CORPORATE/OTHER
Corporate expenses increased $187 primarily due to $60 of repairs being
done at the Company's property in Newburyport, Massachusetts; there were no
other significant variations in any expense.
8
<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, 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: March 3, 1997 /s/ Norman A. Halper
---------------------
Norman A. Halper
President
Date: March 3, 1997 /s/ Harry Bergman
------------------
Harry Bergman
Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 1,461,712
<SECURITIES> 0
<RECEIVABLES> 4,603,777
<ALLOWANCES> 220,345
<INVENTORY> 5,196,769
<CURRENT-ASSETS> 13,158,080
<PP&E> 73,194,969
<DEPRECIATION> 32,676,450
<TOTAL-ASSETS> 80,643,936
<CURRENT-LIABILITIES> 15,983,195
<BONDS> 20,381,466
0
0
<COMMON> 1,175,261
<OTHER-SE> 39,347,026
<TOTAL-LIABILITY-AND-EQUITY> 80,643,936
<SALES> 10,249,759
<TOTAL-REVENUES> 21,992,437
<CGS> 9,252,575
<TOTAL-COSTS> 11,372,978
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,669,024
<INCOME-PRETAX> (302,140)
<INCOME-TAX> 264,000
<INCOME-CONTINUING> 82,579
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,579
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
