UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from to .
Commission file number 0-1937
OAKRIDGE HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
MINNESOTA 41-0843268
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
4810 120TH STREET WEST, APPLE VALLEY, MINNESOTA 55124
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (612) 686-5495
_________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for 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. {X}Yes { }No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
1,309,670
Transitional Small Business Disclosure Format (Check One):
{ )Yes {X}No
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS March 31,1997 June 30,1996
_____________ ____________
<S> <C> <C>
Cash $348,000 $264,691
---------- ----------
Trade receivable, net of allowance 508,426 513,641
---------- ----------
Inventories:
Cemetery and mausoleum space 689,173 701,490
Markers, urns & flowers 26,188 15,675
---------- ----------
715,361 717,165
---------- ----------
Property and equipment 1,757,295 1,701,490
Less: accumulated depreciation 1,267,420 1,217,310
---------- ----------
489,875 484,180
---------- ----------
Prepaid expenses and other assets 45,515 46,331
---------- ----------
Other assets:
Deferred income taxes 297,989 337,429
---------- ----------
Investments:
Land 250,000 250,000
---------- ----------
$2,655,166 $2,613,437
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
LIABILITIES March 31,1996 June 30,1996
_____________ ____________
<S> <C> <C>
Accounts payable - trade $66,994 $70,199
---------- ----------
Accrued liabilities:
Salaries & payroll taxes 103,010 151,182
Perpetual care trust fund 196,893 190,135
Deferred revenue 366,787 314,483
Marker and inscription costs 76,876 76,026
Other 36,512 33,192
---------- ----------
780,078 765,018
---------- ----------
Notes payable 912,629 989,065
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, par value $.10 per
share; authorized 1,000,000 shares,
none issued and outstanding - -
Common stock, par value $.10 per share;
authorized 5,000,000 shares, issued
and outstanding 1,309,670 at
March 31, 1997 and June 30, 1996 130,968 130,968
Additional paid-in-capital 1,875,500 1,875,500
Accumulated deficit (1,111,003) (1,217,313)
---------- ----------
895,465 789,155
---------- ----------
$2,655,166 $2,613,437
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
<TABLE>
Three Months Ended March 31, Nine Months Ended March 31,
1996 1995 1996 1995
________________________________ _____________________________
<S> <C> <C> <C> <C>
Revenue, net:
Cemetery $507,847 $585,177 $1,657,119 $1,163,383
Interest - Care Funds 56,227 41,007 172,756 166,159
Other 1,558 1,922 7,748 10,605
---------- ---------- ---------- ----------
Total revenue 565,632 628,106 1,837,623 1,940,147
---------- ---------- ---------- ----------
Operating expenses:
Cemetery 286,665 298,907 849,261 877,804
Selling 55,131 61,657 177,452 151,961
General and administrative 198,387 213,319 605,795 536,372
---------- ---------- ---------- ----------
Total operating expenses 542,183 873,883 1,632,508 1,566,137
---------- ---------- ---------- ----------
Income from operations 23,449 54,223 205,115 374,010
Interest expense 20,261 13,878 58,805 80,782
---------- ---------- ---------- ----------
Income from continuing operations 3,188 40,345 146,310 293,228
Income taxes - 11,591 40,000 100,100
---------- ---------- ---------- ----------
Net income 3,188 28,754 106,310 193,128
Accumulated deficit:
Beginning of period (1,114,191) (1,227,434) (1,217,313) (1,391,808)
---------- ---------- ---------- ----------
End of period $(1,111,003) $(1,198,680) $(1,111,003) $(1,198,680)
========== ========== ========== ==========
Earnings per share $.033 $.024 $.081 $.148
========== ========== ========== ==========
Weighted average
shares outstanding 1,309,670 1,198,242 1,309,670 1,304,492
========== ========== ========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
Nine Months Ended March 31,
1996 1995
___________________________
<S> <C> <C>
Cash flows from operating activities:
Net income $106,310 $193,128
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation 49,840 41,199
Amortization 25,653 -
Change in receivables 5,215 (53,742)
Change in inventories 1,804 2,087
Change in prepaid and other assets 14,603 97,639
Change in accounts payable (3,205) (22,284)
Change in accrued liabilities 15,060 14,954
---------- ----------
Net cash from operating activities 215,280 272,981
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (55,805) (128,276)
Investment in golf course - 50,000
---------- ----------
Net cash from investing activities (55,805) (78,276)
---------- ----------
Net cash provided by operations
after investing activities 159,475 194,705
---------- ----------
Cash flows from financing activities:
Payments on long-term debt (76,436) (105,777)
Proceeds from long-term debt - 23,801
---------- ----------
Net cash from financing activities (76,436) (81,976)
---------- ----------
Net increase (decrease) in cash: 83,039 112,729
Cash at beginning of period 264,961 192,691
---------- ----------
Cash at end of period $348,000 $305,420
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the
instructions to Form 10-QSB and, accordingly, do not include
all information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management all adjustments, consisting only
of normal recurring accruals, considered necessary for a
fair presentation have been included.
B. These statements should be read in conjunction with the
financial statements and footnotes included in the
Registrant's Annual Report on Form 10-KSB for the year ended
June 30, 1996, previously filed with the Commission.
C. The results of operations for the nine months ended March
31, 1997, are not necessarily indicative of operating
results to be expected for the full year.
D. Income tax provisions for interim periods are based on the
current best estimate of the effective federal and state
income tax rates spread evenly throughout the year.
E. Earnings per common share are based on the weighted average
number of common shares outstanding during each period.
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 2 - MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OAKRIDGE HOLDINGS, INC.
FINANCIAL & LIQUIDITY AND CAPITAL RESOURCES
Since June 30, 1996 "operating working capital" (defined as
receivables and prepaids less accounts payable and accrued
liabilities, except for deferred revenue) increased $34,418.
Lower receivables and other assets were more than offset by lower
accounts payable and accrued salaries for the increase. The
company showed a slight decrease in accounts receivable due to
decreased sales in internment fees and auxiliary related items.
The decrease in accrued liabilities is primarily due to lower
accrued salaries and payroll taxes, is primarily due to timing of
payment. The decrease in accounts payable is primarily due to
increased cash flow.
Inventory decreased $1,804 from June 30, 1996 primarily due
to lot sales, with an increase in markers, urns and flower
inventory.
Other assets and prepaids increased $816 from June 30, 1996
primarily due to prepayment for insurance, training and related
costs which was offset due to one time write off of loan
amortization fees. Deferred taxes decreased $39,444 due to net
income earned during the nine months. Investments remained
unchanged during the nine month period.
Notes payable decreased $76,436 from June 30, 1996 due to
the payment on the debt.
Stockholders' equity increased $106,310 from June 30, 1996
due to net income for the nine month period.
The Registrant's present working capital has continued to
improve and is sufficient to meet current operating needs.
The Registrant's capital expenditure for equipment was
$55,805 for nine months ended March 31, 1997. Consistent with its
ongoing increase in net sales and operating efficiencies, the
Registrant is investing substantial amounts to increase sales and
operating efficiencies. The Registrant's planned capital
expenditures will require an additional $50,000 of expenditures
during fiscal year 1997.
The Registrant will be able to finance these capital expenditures
primarily from cash flow from operations.
Cash and cash equivalents increased $83,039 during the first nine
months of 1997. Operating activities provided cash of $215,280,
and investing activities used cash of $55,805 or net cash
provided by operations after reinvestment was $159,475. Payment
of debt used cash of $76,436.
The remaining increases and decreases in the components of
the Company's financial position reflect normal operating
activity.
The Registrant's ratio of indebtedness for borrowed money to
equity of 102% at March 31, 1997, an improvement of 23% since
June 30, 1996.
During the third quarter of fiscal year 1997, the operating
cemeteries revenue decreased 5% over the prior fiscal year 1996,
due to decreased internment fees; cost of sales increased 1% due
to repairs and maintance; selling expenses increased 2% primarily
due to the costs associated with the hiring of new sales manager
and the Registrant's general & administrative expenses increased
13% primarily due to higher professional fees from litigation.
Net cash provided by operations after reinvestment was $159,475
and net increase in cash was $83,039.
ENVIRONMENTAL LIABILITIES
Subsequent to June 30, 1994, the Registrant commissioned an
engineering study of its operating cemeteries for the purpose of
determining the full extent of possible soil contamination. Five
underground tanks were found to require removal and the adjoining
soil to undergo remediation. The engineering estimate for this
project was $195,000. A total of approximately $293,258 has been
expensed by the Registrant as of March 31, 1997.
The Registrant has been notified by the Illinois
Environmental Protection Agency that the Registrant s clean-up
plan may not be in full compliance with EPA guidelines. The
Company has responded to the IEPA with a work plan that calls for
additional costs of approximately $28,500 accrued at June 30,
1996 may be incurred, however, the Registrant cannot reasonably
estimate those costs. In addition, the Company may not file for
reimbursement for the Leaking Underground Storage Tank Fund until
the work plan has IEPA approval. Accordingly, the Company has
made no provision for reimbursements.
RESULTS OF OPERATIONS:
NINE MONTHS ENDED MARCH 31, 1997:
CEMETERY - Cemetery revenue decreased 6% over the prior fiscal
year as a result of price increases and decreased internments,
with the sales of cemetery and mausoleum spaces remaining
relatively constant with prior years. Operating expenses in
relation to sales increased from 50% to 51% over the prior fiscal
period.
INTEREST-CARE FUNDS - Income increased 4% due to the timing of
payments on interest earned.
SELLING EXPENSES - Selling expenses in relation to revenue
increased to 11% from 9% primarily due to group insurance for
salesman and the hiring of a sales manager.
GENERAL AND ADMINISTRATIVE EXPENSES - General and Administrative
expenses increased 13% due to increased legal fees associated
with litigation. (Part II, Item 1)
THREE MONTHS ENDED MARCH 31, 1997:
CEMETERY - Cemetery revenue decreased 13% in comparison to prior
fiscal year,primarily due to a decrease in number of cremations
and number of internments. Operating expenses for third quarter
have increased 5% primarily due to increased salaries and related
benefits.
INTEREST-CARE FUND - Income increased 37% due to timing of
payments from perpetual care funds and higher interest rates on
investments in comparison to prior fiscal year.
SELLING EXPENSES - Selling expenses in relation to revenue
remained constant at 11%.
GENERAL & ADMINISTRATIVE EXPENSES - General & Administrative
expenses increased 8% or $14,932, due to higher professional
services associated with litigation (Part II, Item 1).
PART II - OTHER INFORMATION FORM 10-QSB
ITEM 1 - LEGAL PROCEEDINGS
OAKRIDGE HOLDINGS, INC.
ITEM 1- LEGAL PROCEEDINGS:
On September 6, 1995, the Registrant and the chairman of the
Registrant was served with a complain in a lawsuit commenced by
American National Financial Services, an Arizona corporation
whose officer is Lee Brukman, a former chairman of the board of
the Registrant asking for over $500,000 in damages. The complaint
alleges a breach of an essential and material term of an
agreement and that a Guaranty of Collection of the Lawrence G.
Malanfant note, the former president of the Registrant, is also
at issue is void. In addition, the complaint alleges interference
with contractual relations. The Registrant and chairman believe
that these allegations are baseless, and they are vigorously
defending themselves against the claim. Accordingly, the
Registrant has made no provisions for this claim.
On March 19, 1997 the Superior Court of Arizona in Maricopa
County ordered the lawsuit dismissed with prejudice.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Oakridge Holdings, Inc.
/s/ Robert C. Harvey
Robert C. Harvey
Chief Executive Officer
Date: May 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 348,000
<SECURITIES> 0
<RECEIVABLES> 530,426
<ALLOWANCES> 22,000
<INVENTORY> 715,361
<CURRENT-ASSETS> 1,617,302
<PP&E> 1,757,295
<DEPRECIATION> 1,267,420
<TOTAL-ASSETS> 2,655,166
<CURRENT-LIABILITIES> 847,072
<BONDS> 0
0
0
<COMMON> 130,968
<OTHER-SE> 1,875,500
<TOTAL-LIABILITY-AND-EQUITY> 2,655,166
<SALES> 1,657,119
<TOTAL-REVENUES> 1,837,623
<CGS> 877,804
<TOTAL-COSTS> 1,026,713
<OTHER-EXPENSES> 605,795
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58,805
<INCOME-PRETAX> 146,310
<INCOME-TAX> 40,000
<INCOME-CONTINUING> 106,310
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106,310
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
