Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C.
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended January 31, 2000 Commission file No. 0-0767
LINCOLN INTERNATIONAL CORPORATION
(Exact Name of Registrant as specified in its charter)
Kentucky 61-0575092
(State of other Jurisdiction (I.R.S. Employer
incorporation or organization) Identification Number)
2300 Greene Way
Louisville, Kentucky 40220
(Address or principal executive offices) (Zip Code)
(Registrants Telephone Number, Including Area Code) (502) 671-0010
Indicate by check whether the registrant (1) has filed a report required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during 12 months (or of such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
Indicate the numbers of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report: 7972 of
the (no-par) voting common stock.
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
1/31/00 7/31/99
ASSETS
Current assets:
Cash 194077 396466
Other receivables 40789 2500
Prepaid expenses 84335 0
Total current assets 319201 398966
Net property, plant and equipment 3286902 3105922
Noncurrent assets: Deferred tax asset 185506 185506
Investment interest in Accounting USA, Inc. 0 0
Total assets 3791609 3690394
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 57723 32297
Accrued expenses -26229 18750
Current maturities of long-term debt 374538 0
Deferred Rent 0 0
Deposits 0 0
Total current liabilities 406032 51047
Long-term debt, less current maturities 0 0
Deferred Income Taxes - Non Current 883387 883387
Stockholders' equity
Common Stock
Voting 7972 shares O/S 1879898 1879898
Retained earnings 622292 876062
Total stockholders' equity 2502190 2755960
Total liabilities and stockholders' equity 3791609 3690394
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING JANUARY 31
1/31/00 1/31/99
Revenues:
Net service and operating revenues 189434 62548
189434 62548
Cost and expenses:
Cost of service and operating revenues 98806 33894
Operating, general and administrative
expenses 305857 69804
404663 103698
Income - Loss from operations -215229 -41150
Other income - expense:
Interest expense -4554 -7482
Gain on sale of assets 0 0
Miscellaneous -2975 -215
-7529 -7697
Less: Minority Interest in Accounting
USA, Inc. 38354 0
Income - Loss before income taxes -184404 -48847
Provision for income taxes 17498 0
Net income - loss -166906 -48847
Net income - loss per common share -20.94 -6.13
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDING JANUARY 31
1/31/00 1/31/99
Revenues:
Net service and operating revenues 306608 127727
306608 127727
Cost and expenses:
Cost of service and operating revenu 190377 56051
Operating, general and administrative
expenses 419197 135263
609574 191314
Income - Loss from operations -302966 -63587
Other income - expense:
Interest expense 55 -19006
Gain on sale of assets 0 0
Miscellaneous 225 624
280 -18382
Less: Minority Interest in Accounting
USA, Inc. 44715 0
Income - Loss before income taxes -257971 -81969
Provision for income taxes 38540 0
Net income - loss -219431 -81969
Net income - loss per common share -27.53 -10.28
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEAR TO DATE TO JANUARY 31
2000 1999
Cash flows from operating activities:
Net income (loss) -219431 -81969
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 48347 20326
(Gain) Loss on sale of assets 0 0
Other receivables -42605 30
Prepaid expenses -73320 -4687
Accounts payable 25426 33259
Accrued expenses -44980 -16335
Income Taxes 0 0
Total adjustments -87132 32593
Net cash provided by (used in)
operating activities -306563 -49376
Cash flows from investing activities:
Proceeds from sale of fixed assets 0 0
(Purchases of) Sales of property and
equipment -176904 -15846
(Purchases of) Sale of Investment in
a Company 0 0
Minority Interest Allocation 0 0
Net cash provided by (used in) investin -176904 -15846
Cash flows from financing activities:
Net borrowings (repayments) under
short term notes payable 300000 0
Proceeds from the issuance of common stock 0 622900
Principal payments on long-term debt -28440 -2871
Net cash provided by (used in) financing
activities 271560 620029
Net increase (-decrease) in cash -211907 554807
Cash, beginning of year 405984 90994
Cash, end of period 194077 645801
Supplemental disclosure of cash flow information:
Cash paid during the year for interest 0 19006
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 2000
Real Estate Business
Net revenue from the real estate rentals increased by approximately
$35,588, or 57% during the quarter ended January 31, 2000 as compared to
the quarter ended January 31, 1999.
Operating costs for the quarter ended January 31, 2000 increased by
approximately $58,844, or 57% as compared to the quarter ended January 31,
1999. Increased cost relative to depreciation expense, professional fees
and utilities were cited as the major reasons for the increase as well
as additional revenue to support.
Consolidated Operations
On August 6, 1999, the Company's Board of Directors approved the
investment of $1,500,000 in Accounting USA, Inc., a company that provides
accounting services for small businesses. The Company holds a 75% equity
position in Accounting USA, Inc. and has invested $500,000 in this company
as of the balance sheet date of January 31, 2000.
Accounting USA, Inc.'s financial information has been consolidated with
the operations of the Company in this quarterly financial statement. Since
the Company holds a 75% ownership position in Accounting USA, Inc., a
minority interest adjustment has been computed and reflected in this
financial statement.
Operating revenues of Accounting USA, Inc. were $91298 for the quarter
ended January 31, 2000 with direct operating cost and administrative cost
for the same period of $157,708 and $106,002, respectively. No prior year
information is available since the operations of Accounting USA, Inc.
began October 1, 1999.
The Company had no other capital commitments at January 31, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 2000
Litigation Report. On March 23, 1999, two minority shareholders, Mr.
Merle Brewer and Sarah Forree, filed a lawsuit in the United States District
Court, Western District of Kentucky, Louisville Division against Lincoln
International Corporation, and individual Thurman L. Sisney, David Barhorst
(who resigned June of 1998) and Mr. Richard Dolin (deceased in February of
1999). The case is styled: Civil Action No. 3:99CV-178-S. On May 18, 1999,
Lincoln International Corporation filed a Motion to Dismiss the complaint
alleging that there are no questions of law nor facts substantiating the
allegatons in the complaint. A response to the Motion to Dismiss was
filed by the plaintiffs on July 8, 1999. On June 30, 1999 the plaintiffs
filed a Motion to Amend the complaint to substitute another plaintiff in
place of one of the original plaintiffs, Sarah Forree. On December 23,
1999 the Court granted the plaintiff's motion, and allowed Terry Kennedy
to be substituted for Sarah Foree. On February 18, 2000 the Company filed an
Amended Motion to Dismiss. Defendents have also raised in their Motion to
Amend the complaint the allegation that notice of dissenters rights should
have been provided in the reverse split that concluded on April 5, 1998.
Legal counsel for the corporation gives little or no merit to the
complaint or causes of actions raised by the plaintiffs. If the Company
should be unsuccessful on its Motion to Dismiss, our answer will be filed
to the complaint.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
JANUARY 31, 2000
NO DIVIDENDS WERE PAID BY THE COMPANY DURING THE INTERIM PERIOD.
Lincoln International Corporation was not required to file a Form 8K during
the current quarter.
The unaudited consolidated financial statements include the accounts
of the Company and all of its subsidiaries after eliminating all material
inter-company accounts and transactions. They reflect all adjustments
which are necessary in the opinion of management to fairly state the
financial position of the Company at January 31, 2000 and the result of
its operations and cash flow for the period then ended.
-SIGNATURES-
Pursuant to the requirement 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.
LINCOLN INTERNATIONAL CORPORATION
Lee Sisney, President
Richard J. Frockt, Treasurer
Dated this 25th day of February, 2000
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-31-1999
<PERIOD-END> JAN-31-2000
<CASH> 194077
<SECURITIES> 0
<RECEIVABLES> 40789
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 319201
<PP&E> 3401748
<DEPRECIATION> 114846
<TOTAL-ASSETS> 3791609
<CURRENT-LIABILITIES> 406032
<BONDS> 883387
0
0
<COMMON> 1879898
<OTHER-SE> 622292
<TOTAL-LIABILITY-AND-EQUITY> 3791609
<SALES> 0
<TOTAL-REVENUES> 306608
<CGS> 0
<TOTAL-COSTS> 609574
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (55)
<INCOME-PRETAX> (257971)
<INCOME-TAX> 38540
<INCOME-CONTINUING> (219431)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (219431)
<EPS-BASIC> (27.53)
<EPS-DILUTED> (27.53)
</TABLE>
