<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 quarterly report
on Form 10-QSB and is qualified in its entirety by reference to such quarterly
report on Form 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> May-31-1996
<PERIOD-END> Nov-30-1995
<CASH> 911,371
<SECURITIES> 738,319
<RECEIVABLES> 349,785
<ALLOWANCES> 44,846
<INVENTORY> 117,662
<CURRENT-ASSETS> 2,261,532
<PP&E> 1,622,267
<DEPRECIATION> 35,130
<TOTAL-ASSETS> 5,306,536
<CURRENT-LIABILITIES> 392,423
<BONDS> 0
<COMMON> 437,428
0
0
<OTHER-SE> 4,418,859
<TOTAL-LIABILITY-AND-EQUITY> 5,306,536
<SALES> 1,320,987
<TOTAL-REVENUES> 1,320,987
<CGS> 874,840
<TOTAL-COSTS> 874,840
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 367,407
<INCOME-TAX> 93,774
<INCOME-CONTINUING> 282,633
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 282,633
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
<PAGE> 1
UNITED STATE SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- - - - - - - - - - - -
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANTS TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1995
[ ] TRANSITION REPORT PURSUANTS 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 small business issuer as specified in its charter)
State of Hawaii No. 99-0088064
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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)
N/A
(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 XX No
1,843,310 shares of Common Stock Outstanding at November 30, 1995
<PAGE> 2
HOSOI GARDEN MORTUARY, INC.
_ _ _ _ _ _ _ _ _ _ _ _ _ _
Six-Months Ended November 30, 1995 and 1994
CONTENTS
_ _ _ _ _
[CAPTION]
Pages
[S] [C]
DISCLAIMER OF OPINION 1
PART I - Financial Information
Item 1. Financial Statements
Balance Sheet 2
Statements of Income 3
Statements of Cash Flows 4
Notes to Financial Statements 5 - 8
Item 2. Management's Discussions 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 November 30, 1995, and the related statements of income and cash flows
for the three-months and six-months ended November 30, 1995 and 1994 were not
audited by us and accordingly, we do not express an opinion on them.
December 27, 1995
Honolulu, Hawaii
1
<PAGE> 4
HOSOI GARDEN MORTUARY, INC.
BALANCE SHEET
_ _ _ _ _ _ _
November 30, 1995
[CAPTION]
A S S E T S
[S] [C]
CURRENT ASSETS
Cash and cash equivalents (Note 1) $ 711,371
Certificate of deposit 200,000
Securities available-for-sale, at market (Note 2) 738,319
Accounts receivable, less allowance for doubtful accounts
of $44,846 349,785
Income tax receivable 25,099
Inventories (Note 7) 117,662
Prepaid expenses and others 73,661
Deferred income taxes (Note 4) 45,635
------------
TOTAL CURRENT ASSETS 2,261,532
------------
INVESTMENTS
Garden Life Plan, Ltd. (Note 3) 1,210,025
Cemetery plots 1,350
Securities held-to-maturity, at cost (Note 2) 105,749
------------
1,317,124
------------
PROPERTY AND EQUIPMENT, at cost, less accumulated
depreciation 1,622,267
------------
OTHER ASSETS 105,613
------------
TOTAL ASSETS $ 5,306,536
============
[CAPTION]
L I A B I L I T I E S
[S] [C]
CURRENT LIABILITIES
Accounts payable $ 311,361
Accrued liabilities 79,180
Note payable 686
Income taxes payable 1,196
-----------
TOTAL CURRENT LIABILITIES 392,423
-----------
DEFERRED INCOME TAXES (Note 4) 57,825
-----------
[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 4,506,180
-----------
NET UNREALIZED GAIN ON SECURITIES AVAILABLE-FOR-SALE (Note 2) 20,041
-----------
TREASURY STOCK, 223,785 shares, at cost (Note 8) (81,282)
-----------
TOTAL STOCKHOLDERS' EQUITY 4,856,288
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,306,536
============
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
2
<PAGE> 5
HOSOI GARDEN MORTUARY, INC.
STATEMENTS OF INCOME
- - - - - - - - - -
[CAPTION]
Three-Months Ended Six-Months Ended
November 30, November 30,
---------------------- -----------------------
1995 1994 1995 1994
---------- ---------- ---------- ----------
[S] [C] [C] [C] [C]
NET SALES AND SERVICES $ 632,019 $ 649,999 $1,320,987 $ 1,268,430
COST OF SALES AND
SERVICES (Note 7) 432,872 468,937 874,840 907,309
---------- ---------- ---------- ----------
GROSS PROFIT 199,147 181,062 446,147 361,121
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 168,400 147,816 310,322 259,974
---------- --------- ---------- ---------
OPERATING INCOME 30,747 33,246 135,825 101,147
OTHER INCOME (EXPENSE)
Parking, dividends,
interest and
miscellaneous income 39,562 34,461 78,153 60,963
Interest 196 (210) - (645)
--------- --------- --------- --------
INCOME BEFORE INCOME
TAXES AND EQUITY IN
EARNINGS OF GARDEN
LIFE PLAN, LTD. 70,505 67,497 213,978 161,465
INCOME TAXES (Note 5) 20,561 24,725 80,793 60,420
--------- -------- --------- --------
INCOME BEFORE EQUITY
IN EARNINGS OF
GARDEN LIFE PLAN, LTD. 49,944 42,772 133,185 101,045
EQUITY IN EARNINGS OF GARDEN
LIFE PLAN, LTD. (Note 3)
(net of deferred income
taxes) 76,790 70,367 149,448 154,486
--------- -------- -------- ---------
NET INCOME $ 126,734 $ 113,139 $ 282,633 $ 255,531
========== ========== ========== ==========
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
(Note 6) 1,834,310 1,847,563 1,835,894 1,851,843
========= ========== ========== =========
EARNINGS PER COMMON SHARE
(Note 6) $.07 $.06 $.15 $.14
==== ==== ==== ====
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
3
<PAGE> 6
HOSOI GARDEN MORTUARY, INC.
STATEMENTS OF CASH FLOWS
- - - - - - - - - - - - -
Six-Months Ended November 30, 1995 and 1994
[CAPTION]
1995 1994
---------- ----------
[S] [C] [C]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 282,633 $ 255,531
Adjustments to reconcile net income to net
cash provided by operations
Depreciation 35,130 32,326
Loss (gain) on sale of securities (13,969) 2,205
Undistributed earnings of affiliate (162,429) (167,904)
Deferred income taxes 12,982 (2,557)
(Increase) decrease in certain assets
Accounts receivable (42,236) 29,575
Dividend receivable - 200,000
Income tax receivable 29,147 -
Inventories (6,355) 26,718
Prepaid expenses and others (4,818) (29,170)
Cash value of life insurance policies - (938)
Other assets - (27)
(Decrease) increase in certain liabilities
Accounts payable 10,970 94,777
Income taxes payable 1,196 (85,043)
Accrued liabilities (52,213) (59,112)
---------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 90,038 296,381
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (102,894) (6,500)
ncrease in securities available-for-sale (181,732) (227,959)
Proceeds from sale of equity securities 186,730 14,588
Increase in certificate of deposit (200,000) -
Premiums payments on life insurance policies (1,628) (2,021)
----------- ---------
NET CASH USED IN INVESTING ACTIVITIES (299,524) (221,892)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of reacquired shares (17,850) (52,835)
----------- ---------
NET CASH USED IN FINANCING ACTIVITIES (17,850) (52,835)
----------- ---------
NET INCREASE (DECREASE) (227,336) 21,654
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 938,707 606,114
----------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 711,371 $ 627,768
=========== ==========
[FN]
See the accompanying Notes to Financial Statements
(Unaudited)
4
<PAGE> 7
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
- - - - - - - - - - - - - - -
November 30, 1995 and 1994
(1) Cash and cash equivalents
-------------------------
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
(2) Investment securities
---------------------
At November 30, 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 $ 68,254 $ -
U.S. Treasury Notes - 105,749
Mutual Funds 650,024 -
---------- ----------
$ 718,278 $ 105,749
========== =========
Market Value:
Equity Securities $ 75,601 $ -
U.S. Treasury Notes - 100,257
Mutual Funds 662,718 -
---------- ---------
$ 738,319 $ 100,257
========== ==========
Unrealized Gains:
Equity Securities $ 11,124 $ -
U.S. Treasury Notes - -
Mutual Funds 12,694 -
---------- ----------
$ 23,818 $ -
========== ==========
Unrealized Loss:
Equity Securities $ 3,777 $ -
U.S. Treasury Notes - 5,492
Mutual Funds - -
---------- -----------
$ 3,777 $ 5,492
========== ===========
[FN]
(Unaudited)
5
<PAGE> 8
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
- - - - - - - - - - - - - - -
November 30, 1995 and 1994
(2) Investment securities (continued)
---------------------
The maturities for all debt securities held at November 30, 1995 were:
[CAPTION]
Available-for-Sale Held-to-Maturity
--------------------- -------------------------
Amortized Market Amortized Market
Cost Value Cost Value
--------- ------- --------- ----------
[S] [C] [C] [C] [C]
Within 1 year $ - $ - $ - $ -
After 1 year
through 5 years - - 105,749 100,257
After 5 years - - - -
--------- ---------- ---------- ---------
$ $ - $ 105,749 $ 100,257
========= ========== ========== =========
During the quarter ended November 30, 1995, the Company sold securities
available-for-sale for $186,730. The gross realized gains of $13,969 is
reflected in earnings. The cost of the securities sold was based on the
cost of all the shares of each such security held at the time of sale.
(3) Garden Life Plan, Ltd.
---------------------
Investments in Garden Life Plan, Ltd. represent the Company's 50% share, in
the underlying equity, 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 sales of pre-need funeral plans which are
serviced solely by Hosoi Garden Mortuary, Inc.
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> 9
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
- - - - - - - - - - - - - - -
November 30, 1995 and 1994
(3) Garden Life Plan, Ltd. (continued)
---------------------
Audited financial statements of this subsidiary as of May 31, 1995 showed
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 its three-months and six-months
ended November 30, 1995.
Investment in Garden Life Plan, Ltd. as of November 30, 1995 is accounted
for as follows:
[S] [C]
Stockholders' equity at November 30, 1995
per Garden Life Plan, Ltd.'s balance sheet $ 2,420,043
Equity Ownership 50%
-----------
1,210,021
Rounding 4
-----------
Total investment in Garden Life Plan, Ltd. $ 1,210,025
===========
(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 November 30, 1994 the Company's retained earnings included approximately
$1,209,525 of undistributed earnings of Garden Life Plan, Ltd.
[FN]
(Unaudited)
7
<PAGE> 10
HOSOI GARDEN MORTUARY, INC.
NOTES TO FINANCIAL STATEMENTS
- - - - - - - - - - - - - - -
November 30, 1995 and 1994
(5) Income taxes
------------
The provision for income taxes consists of the following:
[CAPTION]
1995 1994
-------- ---------
[S] [C] [C]
Federal:
Current $ 68,475 $ 51,199
Deferred 10,048 10,387
-------- ---------
Total Federal 78,523 61,586
-------- ---------
State:
Current 12,318 9,221
Deferred 2,933 3,032
-------- ---------
Total State 15,251 12,253
-------- ---------
Total Federal and State $ 93,774 $ 73,839
======== =========
(6) Earnings per share
------------------
Earnings per common share has been computed on the basis of a weighted
average of shares outstanding of 1,835,894 for 1995 and 1,851,843 for 1994.
(7) Cost of sales
-------------
Cost of sales, for the three and six months ended November 30, 1994, is
computed by the gross profit method using the cost of sales percentage for
the year ended May 31, 1994.
(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 November 30, 1995
reflects the shares acquired before July 1, 1987.
[FN]
(Unaudited)
8
<PAGE> 11
HOSOI GARDEN MORTUARY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- - - - - - - - - - - - - - - - - - - - - - -
November 30, 1995 and 1994
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 November
30, 1995.
The working capital and working capital ratio at November 30, 1995 is as
follows:
[S] [C]
Working capital $ 1,869,108
Working capital ratio 5.8:1
Changes in results of operations
Cost of Sales and Services - Cost of sales and services as a percent of net
sales decreased to 66.2% for the six-months ended November 30, 1995 from
71.5% for the six-months ended November 30, 1994. The decrease is due
principally to an increase in revenues and a decrease in cremation costs.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses as a percent of net sales increased to 23.5% from
20.5% for the six-months ended November 30, 1995 over 1994. The increase is
mainly due to an increase in salaries and professional fees.
Income Taxes - The effective income tax rate is 43.8% for 1995 and 45.8% for
1994.
Other income (expense) - Other income as a percent of net sales increased to
5.9% from 4.8% for the six-months ended November 30, 1995 over 1994. The
increase in other income is due to an increase in interest income and gain
from the sale of marketable securities which were partially offset by a
decrease in parking revenues.
9
<PAGE> 12
HOSOI GARDEN MORTUARY, INC.
PART II - OTHER INFORMATION
- - - - - - - - - - - - - -
November 30, 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
six-months ended November 30, 1995.
10
<PAGE> 13
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 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 01/10/96 CLIFFORD HOSOI
---------------------------
Clifford Hosoi, President
Date 01/10/96 ELAINE NAKAMURA
---------------------------
Elaine Nakamura, Corporate
Secretary and Bookkeeper
<PAGE> 14
EXHIBIT INDEX
- - - - - - -
EXLHIBIT
NO. DESCRIPTION
- - - - - - - - - - - -
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information only
and not filed.
