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 April 30, 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 the preceding 12 months (or of such shorter period that the registrant
was req 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
4/30/00 7/31/99
ASSETS
Current assets:
Cash 94656 396466
Other receivables 54298 2500
Prepaid expenses 25435 0
Other Current Assets 95554 0
Total current assets 269943 398966
Net property, plant and equipment 3323359 3105922
Noncurrent assets: Deferred tax asset 185506 185506
Investment interest in Accounting USA, Inc. 0 0
Total assets 3778808 3690394
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 40431 32297
Accrued expenses -124635 18750
Current maturities of long-term debt 625742 0
Deferred Rent 0 0
Deposits 0 0
Total current liabilities 541538 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 473985 876062
Total stockholders' equity 2353883 2755960
Total liabilities and stockholders' equity 3778808 3690394
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING APRIL 30
4/30/00 4/30/99
Revenues:
Net service and operating revenues 196449 22845
196449 22845
Cost and expenses:
Cost of service and operating revenues 139168 120877
Operating, general and administrative
expenses 340654 52623
479822 173500
Income - Loss from operations -283373 -150655
Other income - expense:
Interest expense -6836 3752
Gain on sale of assets 0 2460255
Miscellaneous -293 -2766
-7129 2461241
Less: Minority Interest in Accounting
USA, Inc 35848 0
Income - Loss before income taxes -254654 2310586
Provision for income taxes 106349 -940249
Net income - loss -148305 1370337
Net income - loss per common share -18.60 171.89
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDING APRIL 30
4/30/00 4/30/99
Revenues:
Net service and operating revenues 503057 150572
503057 150572
Cost and expenses:
Cost of service and operating reve 450155 176928
Operating, general and administrative
expenses 639241 187886
1089396 364814
Income - Loss from operations -586339 -214242
Other income - expense:
Interest expense -6781 -15254
Gain on sale of assets 0 2460255
Miscellaneous -68 -2143
-6849 2442858
Less: Minority Interest in Accounting
USA, Inc 80563 0
Income - Loss before income taxes -512625 2228616
Provision for income taxes 144889 -940249
Net income - loss -367736 1288367
Net income - loss per common share -46.13 161.61
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE YEAR TO DATE TO APRIL 30
2000 1999
Cash flows from operating activities:
Net income (loss) -367808 1288366
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 87083 104002
(Gain) Loss on sale of assets 0 -2460255
Other receivables -48826 8354
Inventory -9664 0
Prepaid expenses -107598 -34686
Accounts payable 8134 2726
Accrued expenses -143387 -65292
Income Taxes 0 940249
Total adjustments -214258 -1504902
Net cash provided by (used in) operating
activities -582066 -216536
Cash flows from investing activities:
Proceeds from sale of fixed assets 0 3400000
(Purchases of) Sales of property and
equipment -252097 -15846
(Purchases of) Sale of Investment in a
Company 0 0
Minority Interest Allocation 0 0
Net cash provided by (used in) investing
activities -252097 3384154
Cash flows from financing activities:
Net borrowings (repayments) under
short term notes payable 522834 0
Proceeds from the issuance of common stock 0 597900
Principal payments on long-term debt 0 -386054
Net cash provided by (used in) financing
activities 522834 211846
Net increase (decrease) in cash -311329 3379464
Cash, beginning of year 405984 90994
Cash, end of period 94655 3470458
Supplemental disclosure of cash flow information:
Cash paid during the year for interest 6781 15254
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
APRIL 30, 2000
Real Estate Business
Net revenue from the real estate rentals increased by approximately
$73,210, or 76% during the quarter ended April 30, 2000 as compared to the
quarter ended April 30, 1999.
Operating costs for the quarter ended April 30, 2000 increased by
approximately $55,650, or 46% as compared to the quarter ended April 30, 1999
Increased cost relative to depreciation expense, professional fees and
utilities were cited as the major reasons for the increase as well as
additional revevue 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 $700,000 in this company as of the
balance sheet date of April 30, 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 $100,394 for the quarter
ended April 30, 2000 with direct operating cost and administrative cost for
the same period of $228,416 and $112,238, 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 April 30, 2000.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
APRIL 30, 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 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. On March 31, 2000 the Plaintiffs filed their Response to
Defendants Motion to Dismiss.
Capital Investment in Accounting USA, Inc: As of April 30, 2000 Lincoln
International Corporation has invested Seven Hundred Thousand Dollars
($700,000) in Accounting USA, Inc. The company owns 75% of the common stock
in Accounting USA, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
APRIL 30, 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 April 30, 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 12th day of June, 2000
