<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET AND THE STATEMENT OF INCOME FILED AS PART OF THE ANNUAL
REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH ANNUAL REPORT ON FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-1-1996
<PERIOD-END> AUG-31-1995
<CASH> 954,318
<SECURITIES> 727,619
<RECEIVABLES> 333,314
<ALLOWANCES> 44,698
<INVENTORY> 126,811
<CURRENT-ASSETS> 2,351,631
<PP&E> 1,543,331
<DEPRECIATION> 15,873
<TOTAL-ASSETS> 5,227,114
<CURRENT-LIABILITIES> 428,806
<BONDS> 0
<COMMON> 437,428
0
0
<OTHER-SE> 4,310,229
<TOTAL-LIABILITY-AND-EQUITY> 5,227,114
<SALES> 688,968
<TOTAL-REVENUES> 688,968
<CGS> 441,968
<TOTAL-COSTS> 441,968
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 196
<INCOME-PRETAX> 216,131
<INCOME-TAX> 60,232
<INCOME-CONTINUING> 155,899
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 155,899
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_ _ _ _ _ _ _ _ _ _ _
FORM 10-QSB
(AMENDED)
[X] Quarterly report pursuants to section 13 or 15(d) of the Securities
Exchange Act OF 1934
For the quarterly period ended August 31, 1995
OR
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to ________________
_______________________________________
Commission file number 0-2288
_______________________________________
(Unaudited)
HOSOI GARDEN MORTUARY, INC.
(Exact name of registrant as specified in its charter)
State of Hawaii No. 99-0088064
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
30 North Kukui Street
(Corner of Nuuanu Avenue and Kukui Street)
Honolulu, Hawaii 96817
(Address of principal executive offices) (Zip Code)
(808) 538-3877
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 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
1,834,310 shares of Common Stock outstanding at August 31, 1995
<PAGE> 2
HOSOI GARDEN MORTUARY, INC.
_ _ _ _ _ _ _ _ _ _ _ _ _
CONTENTS
_ _ _ _
[CAPTION]
Pages
[S] [C]
DISCLAIMER OF OPINION 1
PART I - Financial Information
Item 1. Financial Statements
Balance Sheet 2
Statement of Income 3
Statements of Cash Flows 4
Notes 5 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II - Other Information 10
SIGNATURES 11
<PAGE> 3
DISCLAIMER OF OPINION
_ _ _ _ _ _ _ _ _ _ _
To the Board of Directors
Hosoi Garden Mortuary, Inc.
The accompanying balance sheet of
HOSOI GARDEN MORTUARY, INC.
as of August 31, 1995, and the related statements of income and cash flows
for the three months ended August 31, 1995 and 1994 were not audited by us
and accordingly we do not express an opinion on them.
September 26, 1995
1
<PAGE> 4
HOSOI GARDEN MORTUARY, INC.
BALANCE SHEET
_ _ _ _ _ _ _
August 31, 1995
[CAPTION]
A S S E T S
[S] [C]
CURRENT ASSETS
Cash (Note 1) $ 754,318
Certificate of deposit 200,000
Securities available for sale, at market (Note 2) 727,619
Accounts receivable, less allowance for doubtful accounts
of $44,698 333,314
Income tax receivable 46,321
Inventories (Note 7) 126,811
Prepaid expenses and others 117,613
Deferred income taxes (Note 4) 45,635
__________
TOTAL CURRENT ASSETS 2,351,631
__________
INVESTMENTS
Garden Life Plan, Ltd. (Note 3) 1,120,254
Cemetery plots 1,350
Securities held to maturity, at cost (Note 2) 105,749
___________
1,227,353
___________
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation 1,543,331
___________
OTHER ASSETS 104,799
___________
TOTAL ASSETS $ 5,227,114
===========
[CAPTION]
L I A B I L I T I E S
[S] [C]
CURRENT LIABILITIES
Accounts payable $ 299,152
Accrued liabilities 128,969
Note payable 685
___________
TOTAL CURRENT LIABILITIES 428,806
___________
DEFERRED INCOME TAXES (Note 4) 50,651
___________
<PAGE> 5
[CAPTION]
S T O C K H O L D E R S' E Q U I T Y
[S] [C]
CAPITAL CONTRIBUTED (Note 8)
Common stock, par value $.20 per share; authorized
3,625,000 shares, issued 2,187,140 shares 437,428
Less 129,045 reacquired shares (26,079)
__________
TOTAL CAPITAL CONTRIBUTED 411,349
RETAINED EARNINGS 4,379,447
NET UNREALIZED GAINS ON SECURITIES AVAILABLE-FOR-SALE
(Note 2) 38,143
TREASURY STOCK, 223,785 shares, at cost (Note 8) (81,282)
__________
TOTAL STOCKHOLDERS' EQUITY 4,747,657
__________
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,227,114
===========
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
2
<PAGE> 6
HOSOI GARDEN MORTUARY, INC.
STATEMENT OF INCOME
_ _ _ _ _ _ _ _ _ _
Three Months Ended August 31, 1995 and 1994
[CAPTION]
1995 1994
_________ _________
[S] [C] [C]
NET SALES AND SERVICES $ 688,968 $ 618,431
COST OF SALES AND SERVICES (Note 7) 441,968 438,372
_________ ________
GROSS PROFIT 247,000 180,059
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 141,922 112,158
_________ ________
OPERATING INCOME 105,078 67,901
OTHER INCOME (EXPENSE)
Parking, dividends, interest and miscellaneous
income 38,591 26,502
Interest (196) (435)
_________ _________
INCOME BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF GARDEN LIFE PLAN, LTD. 143,473 93,968
INCOME TAXES (Note 5) 60,232 43,002
_________ ________
INCOME BEFORE EQUITY IN EARNINGS
OF GARDEN LIFE PLAN, LTD. 83,241 50,966
EQUITY IN EARNINGS OF GARDEN LIFE PLAN, LTD.
(Note 3) 72,658 91,426
__________ _________
NET INCOME $ 155,899 $ 142,392
========== =========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
(Note 6) 1,834,310 1,856,123
__________ _________
EARNINGS PER COMMON SHARE (Note 6) $ .09 $ .08
========== ==========
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
3
<PAGE> 7
HOSOI GARDEN MORTUARY, INC.
STATEMENTS OF CASH FLOWS
_ _ _ _ _ _ _ _ _ _ _ _
Three Months Ended August 31, 1995 and 1994
[CAPTION]
1995 1994
__________ __________
[S] [C] [C]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 155,899 $ 142,392
Adjustment to reconcile net income to net cash
provided by operations
Depreciation 15,873 19,396
Loss (gain) on sale of equity securities (7,861) 2,205
Undistributed earnings of affiliate (72,658) (91,426)
Deferred income taxes 5,807 (8,677)
(Increase) decrease in certain assets
Accounts receivable (25,765) 27,409
Income tax receivable 7,925 -
Inventories (15,504) 1,481
Prepaid expenses and others (48,770) (53,625)
Cash value of life insurance policies (310) (357)
Dividend receivable - 200,000
(Decrease) increase in certain liabilities
Accounts payable (1,239) 18,497
Accrued liabilities (2,425) (17,883)
Income taxes payable - (77,260)
__________ __________
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,972 162,152
__________ __________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (4,700) (2,074)
Decrease in securities (27,414) (214,525)
Proceeds from sale of equity securities 55,107 14,588
Increase on certificate of deposit (200,000) -
Payment of premiums on life insurance policies (504) (1,155)
__________ __________
NET CASH USED IN INVESTING ACTIVITIES (177,511) (203,166)
__________ __________
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of reacquired stocks (17,850) (2,500)
__________ __________
NET CASH USED IN FINANCING ACTIVITIES (17,850) (2,500)
__________ __________
NET DECREASE (184,389) (43,514)
CASH AT BEGINNING OF PERIOD 938,707 606,114
__________ __________
CASH AT END OF PERIOD $ 754,318 $ 562,600
========== ==========
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
4
<PAGE> 8
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _
August 31, 1995 and 1994
Note 1. Cash - The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.
Note 2. Investment securities - At August 31, 1995 the Company held
investments in the following types of securities:
[CAPTION]
Available Held to
for Sale Maturity
_________ _________
[S] [C] [C]
Amortized Cost:
Equity Securities $ 60,222 $ -
U.S. Treasury Notes - 105,749
Mutual Funds 629,254 -
_________ _________
$ 689,476 $ 105,749
========= =========
Market Value:
Equity Securities $ 62,654 $ -
U.S. Treasury Notes - 99,505
Mutual Funds 664,965 -
_________ _________
$ 727,619 $ 99,505
========= =========
Unrealized Gains:
Equity Securities $ 6,148 $ -
U.S. Treasury Notes - -
Mutual Funds 35,711 -
_________ __________
$ 41,859 $ -
========= ==========
Unrealized Losses:
Equity Securities $ 3,716 $ -
U.S. Treasury Notes - 6,244
Mutual Funds - -
_________ __________
$ 3,716 $ 6,244
========= ==========
[FN]
(UNAUDITED)
5
<PAGE> 9
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _
August 31, 1995 and 1994
The maturities for debt securities held at August 31, 1995 were:
[CAPTION]
Available for Sale Held to Maturity
____________________ ______________________
Amortized Market Amortized Market
Cost Value Cost Value
_________ ______ _________ ________
[S] [C] [C] [C] [C]
With 1 year $ - $ - $ - $ -
After 1 year
through 5 years _ _ 105,749 99,505
After 5 years - - - -
_________ ______ _________ ________
$ - $ - $ 105,749 $ 99,505
========= ====== ========= ========
During the quarter ended August 31, 1995, the Company sold securities
available for sale for $55,107. The gross realized gain of $7,861 is
reflected in earnings. The cost of the securities sold was based on cost
of all the shares of each such security held at the time of sale.
Note 3. Garden Life Plan, Ltd. - Investment in Garden Life Plan, Ltd.
represented the Company's 50% share, in the underlying equity in the net
assets, accounted for under the equity method of accounting for investments
in common stock, of Garden Life Plan, Ltd. (GLP), a Hawaii corporation
engaged in the sale of pre-need funeral plans serviced solely by Hosoi Garden
Mortuary, Inc. The fiscal year end of GLP was changed to May 31 (from
June 30) effective for its year ended May 31, 1994.
All payments received from the sale of pre-need funeral plans up to an amount
equal to 30% of the total price plus any sales tax or other charges are
retained by GLP as its compensation. The balance is deposited with
Hawaiian Trust Company, Limited to be held in trust. GLP is entitled
to all earnings from funds held in trust which amounted to $601,851 for the
year ended May 31, 1995 and $470,991 for the eleven months ended May 31,
1994. Trust assets are not included in the financial statements of Hosoi
Garden Mortuary, Inc. nor GLP.
[FN]
(UNAUDITED)
6
<PAGE> 10
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _
August 31, 1995 and 1994
Audited financial statements of this subsidiary as of May 31, 1995 reflected
the following summarized financial position and results of operations:
[S] [C]
Total assets $ 2,529,777
Total liabilities 434,592
___________
Total stockholders' equity $ 2,095,185
===========
Total revenues $ 1,176,848
===========
Operating income $ 170,728
===========
Net income $ 584,579
===========
Equity in earnings of Garden Life Plan, Ltd. represents the Company's share of
the earnings of Garden Life Plan, Ltd. for it's three-months ended August
31, 1995.
Investment in Garden Life Plan, Ltd. as of August 31, 1995 is accounted for
as follows:
[S] [C]
Stockholders' equity at August 31, 1995 per
Garden Life Plan, Ltd.'s balance sheet $ 2,240,500
Equity ownership 50%
___________
1,120,250
Rounding 4
____________
Total investment in Garden Life Plan, Ltd. $ 1,120,254
============
Note 4. Deferred income taxes - Deferred income taxes are provided for timing
differences resulting from inclusion of income and expense items in financial
statements in years other than recognized for income tax purposes. Timing
differences result from the use of the reserve method in accounting for
uncollectible accounts receivable in the financial statements and the use of
the direct write-off method for income tax purposes and from the use of the
equity method of accounting for the investment in subsidiary as explained
under Garden Life Plan, Ltd. above. Under the equity method, the Company's
share of earnings of the subsidiary is reported for tax purposes only when
distributions of earnings are received as dividends.
At August 31, 1995 the Company's retained earnings included approximately
$1,120,254 of undistributed earnings of Garden Life Plan, Ltd.
[FN]
(UNAUDITED)
7
<PAGE> 11
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
- - - - - - - - - - - - - - -
August 31, 1995 and 1994
Note 5. Income taxes - The provision for income taxes consists of the
following:
[CAPTION]
1995 1994
__________ _________
[S] [C] [C]
Federal:
Current $ 46,043 $ 30,286
Deferred 4,495 5,656
State:
Current 8,382 5,409
Deferred 1,312 1,651
_________ _________
Total $ 60,232 $ 43,002
========= =========
Note 6. Earnings per share - Earnings per common share has been computed on
the basis of a weighted average of shares outstanding of 1,834,310 for 1995 and
1,856,123 for 1994.
Note 7. Cost of sales - Cost of sales is computed by the gross profit method
using the cost of sales percentage for the year ended May 31, 1995.
Inventories have been adjusted, at August 31, 1995 to reflect the adjustment to
the cost of sales as computed by the gross profit method.
Note 8. Reacquired shares - Capital contributed has been reduced for shares
reacquired after June 30, 1987. Payments for shares in excess of the par value
of each share acquired has been charged to additional paid-in capital.
The 223,785 shares reflected as Treasury Stock as of August 31, 1995 reflects
the shares acquired before July 1, 1987.
[FN]
(Unaudited)
8
<PAGE> 12
HOSOI GARDEN MORTUARY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Changes in financial condition
There have been no material adverse changes in financial condition from the
end of the preceding fiscal year to the end of the current quarter ended
August 31, 1995.
The working capital and working capital ratios at August 31, 1995 remained at a
favorable level as follows:
[S] [C]
Working capital $1,965,159
Working capital ratio 5.9:1
Changes in results of operations
Cost of Sales and Services - Cost of sales and services as a percent of net
sales decreased to 64.1% from 70.9% for the three-months ended August 31, 1995
over 1994. The decrease is attributable to an overall decrease in the variable
component of cost of sales of 8.1%, which was offset by an increase of 1.3%
in the merchandise cost component of cost of sales.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses as a percent of net sales increased to 20.6% from
18.1% for the three-months ended August 31, 1995 over 1994. The increase
resulted from increase in professional fees, charitable contributions and
salaries and wages.
Income Taxes - The effective income tax rate is 42.0% for 1995 and 45.8% for
1994. The increase is mainly due to prior year's gain on the sales of
investments.
Other Income (Expense) - Other income as a percent of net sales increased to
5.6% in 1995 over 4.2% in 1994. The increase resulted primarily from an
increase in interest income.
9
<PAGE> 13
HOSOI GARDEN MORTUARY, INC.
PART II - OTHER INFORMATION
_ _ _ _ _ _ _ _ _ _ _ _ _ _
August 31, 1995 and 1994
Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three-months ended August 31, 1995.
10
<PAGE> 14
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 information furnished reflects all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the interim
periods.
HOSOI GARDEN MORTUARY, INC.
___________________________
(Small business issuer)
Date October 12, 1995 Clifford S. Hosoi
____________________________
Clifford S. Hosoi, President
Date October 12, 1995 Elaine Nakamura
_____________________________
Elaine Nakamura, Bookkeeper &
Corporate Secretary
<PAGE> 15
EXHIBIT INDEX
-------------
EXHIBIT
NO. DESCRIPTION
------- -----------
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
