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, 1998
[ ]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
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS March 31,1998 June 30,1997
_____________ ____________
Cash $755,278 $382,287
---------- ----------
Trade receivable, net of allowance 569,096 583,298
---------- ----------
Inventories:
Cemetery and mausoleum space 668,269 682,108
Markers, urns & flowers 31,798 15,924
---------- ----------
700,067 698,032
---------- ----------
Property and equipment 1,879,862 1,760,528
Less: accumulated depreciation 1,339,256 1,286,611
---------- ----------
540,606 473,917
---------- ----------
Prepaid expenses and other assets 48,072 39,384
---------- ----------
Deferred income taxes 216,000 256,000
---------- ----------
Investments in raw land - 250,000
---------- ----------
$2,829,119 $2,682,918
========== ==========
LIABILITIES March 31,1998 June 30,1997
_____________ ____________
Note payable - bank $ 50,000 $ 75,000
---------- ----------
Accounts payable - trade 75,151 42,418
---------- ----------
Accrued liabilities:
Salaries & payroll taxes 120,648 124,971
Perpetual care trust fund 214,172 227,087
Deferred revenue 431,812 389,609
Marker and inscription costs 101,738 77,976
Other 36,827 35,667
---------- ----------
905,197 855,310
---------- ----------
Notes payable 701,802 706,603
---------- ----------
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, 1998 and June 30, 1997 130,968 130,968
Additional paid-in-capital 1,875,500 1,875,500
Accumulated deficit (909,499) (1,002,881)
---------- ----------
1,096,969 1,003,587
---------- ----------
$2,829,119 $2,682,918
========== ==========
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
<CAPTION>
Three Months Ended March 31, Nine Months Ended March 31,
1998 1997 1998 1997
____________________________ ___________________________
<S> <C> <C> <C> <C>
Revenue, net:
Cemetery $ 640,680 $ 507,847 $1,906,286 $1,657,119
Interest - Care Funds 59,849 56,227 151,703 172,756
Other 7,420 1,558 7,570 7,748
---------- ---------- ---------- ----------
Total revenue 707,949 565,632 2,065,559 1,837,623
---------- ---------- ---------- ----------
Operating expenses:
Cemetery 304,964 286,665 946,976 849,261
Selling 53,410 57,131 176,295 177,452
General and administrative 178,520 198,387 502,477 605,795
---------- ---------- ---------- ----------
Total operating expenses 536,894 542,183 1,625,748 1,632,508
---------- ---------- ---------- ----------
Income from operations 171,055 23,449 439,811 205,115
Interest expense 21,024 20,261 56,429 58,805
---------- ---------- ---------- ----------
Net income before income taxes
and extraordinary item 150,031 3,188 383,382 146,310
Income taxes 45,000 - 115,000 40,000
---------- ---------- ---------- ----------
Net income before
extraordinary item 105,031 3,188 268,382 106,310
Extraordinary item (net of
tax credit) (175,000) - (175,000) -
---------- ---------- ---------- ----------
Net income (loss) (69,969) 3,188 93,382 106,310
Accumulated deficit:
Beginning of period (839,530) (1,114,191) (1,002,881) (1,217,313)
---------- ---------- ---------- ----------
End of period $ (909,499) $(1,111,003) $ (909,499) $(1,111,003)
========== ========== ========== ==========
Basic earnings per share:
Income before extraordinary
item $ .080 $ .002 $ .205 $ .081
Extraordinary item (.134) - (.134) -
---------- ---------- ---------- ----------
Net income (loss) $ (.054) $ .002 $ .071 $ .081
========== ========== ========== ==========
Diluted earnings per share:
Income before extraordinary
item $ .078 $ .002 $ .199 $ .079
Extraordinary item (.130) - (.130) -
---------- ---------- ---------- ----------
Net income (loss) $ (.052) $ .002 $ .069 $ .079
========== ========== ========== ==========
</TABLE>
<TABLE>
Weighted average shares outstanding:
<S> <C> <C>
Basic 1,309,670 1,309,670
Diluted 1,349,670 1,349,670
</TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended March 31,
1998 1997
_______________________________
Cash flows from operating activities:
Net income $ 93,382 $168,351
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation & Amortization 52,645 35,647
Change in receivables 14,202 146,403
Change in inventories (2,035) (3,063)
Change in prepaid and other assets (8,688) 27,146
Change in deferred taxes 40,000 -
Change in accounts payable 32,733 418
Change in accrued liabilities 49,887 (57,621)
Change in investment in land 250,000 -
---------- ----------
Net cash from operating activities 522,126 317,281
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (119,334) (51,934)
---------- ----------
Net cash from (investing) providing
activities (119,334) (51,934)
---------- ----------
Cash flows from financing activities:
Payments on long-term debt (29,801) (21,413)
Proceeds from long-term debt - 27,012
---------- ----------
Net cash from financing activities (29,801) 5,599
---------- ----------
Net increase (decrease) in cash: 372,991 270,946
Cash at beginning of period 382,287 382,287
---------- ----------
Cash at end of period $755,278 $653,233
========== ==========
OAKRIDGE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with 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, 1997, previously filed with the Commission.
C. The results of operations for the nine months ended March 31,
1998, 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.
Diluted earnings per common share include the number of
additional common shares that would have been outstanding, if
the dilutive potential common shares had been issued.
F. In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 30,
"Reporting Comprehensive Income" (SFAS 130). SFAS 130
requires the reporting of changes in equity during the period
from nonowner sources, such as minimum pension liability
adjustments. There were no items of comprehensive income in
equity at March 31, 1998 or June 30, 1997.
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 2 - MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
OAKRIDGE HOLDINGS, INC.
FINANCIAL & LIQUIDITY AND CAPITAL RESOURCES
Since June 30, 1997 "operating working capital" (defined as
receivables and prepaids less accounts payable and accrued
liabilities, except for deferred revenue) decreased $45,931. The
decrease was caused by greater accounts payable and decrease in
accounts receivable. The decrease in accounts receivable is due
to collections and increase in payables is primarily due to
timing of payments.
Inventory increased $2,035 from June 30, 1997 primarily due to
increase in markers, urns and flower inventory.
Other assets and prepaids increased $8,688 from June 30, 1997
primarily due to prepayment for insurance and training expense.
Deferred taxes decreased $40,000 due to net income earned during
the nine months.
Investments decreased $250,000 due to the termination of the
sublease of Mohave Shores Development, Inc in Arizona, which was
caused by the death of the founder and officer of Mohave Shores
Development, Inc., the lessee and subsequent termination of the
lessor by the Fort Mojave Tribal Corporation lessor.
Notes payable-bank decreased $25,000 and long term debt decreased
$4,081 from June 30, 1997 due to the payment on the debt.
Stockholders' equity increased $93,382 from June 30, 1997 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 $119,334
for nine months ended March 31, 1998. The capital expenditures
are consistent with the Registrant's increase in net sales and
much needed improvement of the property. The Registrant is
investing substantial amounts to improve the property.
Improvements were the fencing of the property on the south and
west property line of Glen Oak Cemetery, display area for
monuments, a new boiler for the mausoleum, and various equipment
for the grounds. The Registrant's planned capital expenditures
will require an additional $ 100,000 of expenditures during
fiscal year 1998 for road improvements.
The Registrant will be able to finance these planned capital
expenditures primarily from cash flow from operations.
Cash and cash equivalents increased $372,991 during the first
nine months of 1998. Operating activities provided cash of
$272,126, and investing activities provided cash of $130,666 or
net cash provided by operating investing activities was $402,792.
Payment of debt used cash of 29,801.
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 69% at March 31, 1998, an improvement of 9% since June
30, 1997.
During the third quarter of fiscal year 1998, the operating
cemeteries revenue increased 26% over the prior fiscal year 1997,
primarily due to increased case loads, price increases in grave
liners and interment fees, and a new aggressive marketing
strategy of monument sales, cost of sales decreased 8% due to
revenue increases, selling expenses decreased 3% primarily due to
the costs associated with eliminating the sales manager position
and the Registrant's general & administrative expenses decreased
10% due to lower professional fees from having no litigation
against the company.
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 $291,781 has been
expensed by the Registrant as of March 31, 1998.
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 above the amount accrued at June
30, 1997. The Registrant cannot reasonably estimate the final
cost of the project. 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
This Quarterly Report on Form 10-QSB contains forward-looking
statements within the meaning of Section 27A of the Securities
Acto of 1933 and Section 21E of the Securities Exchange Act of
1934. The Company's actual results could differ materially from
those sets forth in the forward-looking statements.
NINE MONTHS ENDED MARCH 31, 1998:
CEMETERY - Cemetery revenue increased 15% over the prior fiscal
year as a result of 8.6% increase in case loads, price increases
of 10% on grave liners and 6% price increase on interment fees, a
58% increase in monument sales due to a aggressive marketing and
new display area. Operating expenses in relation to sales
decreased from 56% to 48% over the prior fiscal period. The
decrease in operating expense ratio is primarily due to price
increases in revenue and not a reduction of costs.
INTEREST-CARE FUNDS - Income decreased 12% due to the timing of
payments on interest earned.
SELLING EXPENSES - Selling expenses in relation to revenue
decreased from 11% to 9% due to the elimination of the sales
manager position.
GENERAL AND ADMINISTRATIVE EXPENSES - General and Administrative
expenses decreased 17% due to decreased legal fees associated
with past litigation.
EXTRAORDINARY EXPENSE - The expense was due to a one-time pre-
tax write down of $250,000 due to the termination of the
development ground sublease. The sublease was terminated due to
the termination of the lease between Mohave Shores Development,
Inc the lessee and Fort Mojave Tribal Corporation, the lessor.
THREE MONTHS ENDED MARCH 31, 1998:
CEMETERY - Cemetery revenue increased 26% in comparison to prior
fiscal year, primarily due to a increased case loads, price
increases of products, and 98% increase in the sales of
monuments, operating expense ratio for third quarter decreased 6%
in comparison to prior year, primarily due to revenue increases.
INTEREST-CARE FUND - Income increased 6% due to timing of
payments from perpetual care funds.
SELLING EXPENSES - Selling expenses in relation to revenue
decreased from 11% to 9%, this was due to the elimination of the
sales manager position.
GENERAL & ADMINISTRATIVE EXPENSES - General & Administrative
expenses decreased 10% or $19,867, due to lower professional
services associated with litigation.
PART II - OTHER INFORMATION
FORM 10-QSB
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
OAKRIDGE HOLDINGS, INC.
The following exhibits are included herein:
Exhibit 11 - Statement re: Computation of per share earnings
Exhibit 27 - Financial Data Schedule
The Registrant did not file any reports on Form 8-K during the
three months ended March 31, 1998.
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 15, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 755,278
<SECURITIES> 0
<RECEIVABLES> 584,096
<ALLOWANCES> 15,000
<INVENTORY> 700,067
<CURRENT-ASSETS> 2,072,513
<PP&E> 1,879,862
<DEPRECIATION> 1,339,256
<TOTAL-ASSETS> 2,829,119
<CURRENT-LIABILITIES> 1,030,348
<BONDS> 0
0
0
<COMMON> 130,968
<OTHER-SE> 1,875,500
<TOTAL-LIABILITY-AND-EQUITY> 2,829,119
<SALES> 1,906,286
<TOTAL-REVENUES> 2,065,559
<CGS> 946,976
<TOTAL-COSTS> 1,625,748
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56,429
<INCOME-PRETAX> 383,382
<INCOME-TAX> 115,000
<INCOME-CONTINUING> 268,382
<DISCONTINUED> 0
<EXTRAORDINARY> 175,000
<CHANGES> 0
<NET-INCOME> 93,382
<EPS-PRIMARY> .071
<EPS-DILUTED> .069
</TABLE>
EXHIBIT 11-STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
Nine Months Ended March 31
1998 1997
__________________________
NUMERATOR:
Net income before extraordinary
item used in computing basic and
diluted earnings per share $268,382 $106,310
======== ========
Net income used in computing
basic and diluted earnings
per share $ 93,382 $106,310
======== ========
DENOMINATOR:
Denominator for basic earnings
per share - weighted average
common stock 1,309,670 1,309,670
Effect of dilutive securities
- employee stock options 40,000 40,000
--------- ---------
Denominator for diluted
earnings per share - adjusted
weighted average shares 1,349,670 1,349,670
========= =========
