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 December 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)
<CAPTION>
ASSETS December 31,1997 June 30,1997
________________ ____________
<S> <C> <C>
Cash $653,233 $382,287
---------- ----------
Trade receivable, net of allowance 436,895 583,298
---------- ----------
Inventories:
Cemetery and mausoleum space 672,716 682,108
Markers, urns & flowers 28,379 15,924
---------- ----------
701,095 698,032
---------- ----------
Property and equipment 1,812,462 1,760,528
Less: accumulated depreciation 1,321,708 1,286,611
---------- ----------
490,754 473,917
---------- ----------
Prepaid expenses and other assets 76,688 39,384
---------- ----------
Other assets:
Deferred income taxes 191,000 256,000
---------- ----------
Investments:
Land 250,000 250,000
---------- ----------
$2,799,665 $2,682,918
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<CAPTION>
LIABILITIES December 31,1997 June 30,1997
________________ ____________
<S> <C> <C>
Note payable - bank $ 75,000 $ 75,000
---------- ----------
Accounts payable - trade 42,836 42,418
---------- ----------
Accrued liabilities:
Salaries & payroll taxes 46,841 124,971
Perpetual care trust fund 202,419 227,087
Deferred revenue 408,904 389,609
Marker and inscription costs 104,879 77,976
Other 34,646 35,667
---------- ----------
797,689 855,310
---------- ----------
Notes payable 712,202 706,603
---------- ----------
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
December 31, 1997 and June 30, 1997 130,968 130,968
Additional paid-in-capital 1,875,500 1,875,500
Accumulated deficit (834,530) (1,002,881)
---------- ----------
1,171,938 1,003,587
---------- ----------
$2,799,665 $2,682,918
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
(UNAUDITED)
<CAPTION>
Three Months Ended December 31, Six Months Ended December 31,
1997 1996 1997 1996
_______________________________ ____________________________
<S> <C> <C> <C> <C>
Revenue, net:
Cemetery $ 584,152 $ 554,142 $1,265,606 $1,149,272
Interest - Care Funds 42,261 57,238 91,854 116,529
Other 150 6,190 150 6,190
---------- ---------- ---------- ----------
Total revenue 626,563 617,570 1,357,610 1,271,991
---------- ---------- ---------- ----------
Operating expenses:
Cemetery 323,091 262,475 642,012 562,598
Selling 49,042 55,786 122,885 120,321
General and administrative 144,716 210,449 323,957 407,408
---------- ---------- ---------- ----------
Total operating expenses 516,849 528,710 1,088,854 1,090,325
---------- ---------- ---------- ----------
Income from operations 109,714 88,860 268,756 181,666
Interest expense 33,104 15,665 35,405 38,544
---------- ---------- ---------- ----------
Income from continuing operations 76,610 73,195 233,351 143,122
Income taxes 20,000 22,518 65,000 40,000
---------- ---------- ---------- ----------
Net income 56,610 50,677 168,351 103,122
Accumulated deficit:
Beginning of period (891,140) (1,164,868) (1,002,881) (1,217,313)
---------- ---------- ---------- ----------
End of period $ (834,530) $(1,114,191) $ (834,530) $(1,114,191)
========== ========== ========== ==========
Earnings per share $ .0432 $ .0387 $. 1285 $ .0787
========== ========== ========== ==========
Weighted average
shares outstanding 1,309,670 1,309,670 1,309,670 1,309,670
========== ========== ========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended December 31,
1997 1996
_______________________________
<S> <C> <C>
Cash flows from operating activities:
Net income $168,351 $103,122
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation & Amortization 35,647 33,182
Change in receivables 146,403 (69,390)
Change in inventories (3,063) 6,291
Change in prepaid and other assets 27,146 33,942
Change in accounts payable 418 5,615
Change in accrued liabilities (57,621) (35,099)
---------- ----------
Net cash from operating activities 317,281 77,663
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (51,934) (42,838)
---------- ----------
Net cash from investing activities (51,934) (42,838)
---------- ----------
Cash flows from financing activities:
Payments on long-term debt (21,413) (11,011)
Proceeds from long-term debt 27,012 -
---------- ----------
Net cash from financing activities 5,599 (11,011)
---------- ----------
Net increase (decrease) in cash: 270,946 23,814
Cash at beginning of period 382,287 264,691
---------- ----------
Cash at end of period $653,233 $288,505
========== ==========
</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 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 three months ended December 30, 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'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) decreased $51,896. The
decrease was primarily due to lower receivables and a decrease in accrued
liabilities. The company showed the largest decrease in receivables due to
improved collections. The decrease in accrued liabilities is primarily due to
timing of accrued salaries and payroll taxes.
Inventory remained constant with June 30, 1997, with other assets and prepaid
expenses increasing $37,304 primarily due to the timing of expenses. Deferred
taxes decreased $65,000 due to net income earned during the six months.
Investments remained constant during the six month period.
Accounts payable remained constant from June 30, 1997 with a slight increase of
$418.
Accrued liabilities decreased $57,621 from June 30, 1997 primarily due to timing
of accrued salaries and payroll taxes.
Notes payable increased $5,599 from June 30, 1997 due to a mistake of the bank
not charging interest the first quarter.
Stockholders' equity increased $168,351 from June 30, 1997 primarily due to net
income.
The Registrant's present working capital has continued to improve and is
sufficient to meet current operating needs.
The Registrant's capital expenditures for equipment was $51,934 for the six
months ended December 31, 1997. Consistent with its ongoing goal to increase net
sales and operating efficiencies, the Registrant is investing substantial
amounts to increase its sales and operating efficiencies. The Registrant's
planned capital expenditures will require an additional $75,000 during the
fiscal year 1998. The Registrant will be able to finance these capital
expenditures primarily from cash flow from operations.
Cash and cash equivalents increased $270,946 during the first six months of
fiscal year 1998. Cash provided from operations was $317,281 which provided for
the purchase of equipment of $51,934 and proceeds from financing activities of
$5,599.
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 funds to equity of 61% at
December 31, 1997, was a decrease of 9% in comparison with June 30, 1997.
During the second quarter of fiscal year 1998, the operating cemeteries revenue
increased 10% from the prior fiscal year 1997, cost of sales increased 2% from
49% to 51% of sales, selling expenses remained constant at 10% in relation to
sales, with general and administrative expenses decreasing 20%, with interest
expense decreasing $3,139. Cash flow from operations exceeded cash flow used by
operations by $270,946 for the six months ended December 31, 1997.
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 December 31, 1998.
The Registrant has notified by the Illinois Environmental Protection Agency that
the 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 with the possibility of additional costs. The
Company is awaiting a response on the work plan from the IEPA. Additional costs
beyond the $28,500 accrued at June 30, 1997 may be incurred, however, the
Registrant cannot reasonably estimate those costs. In addition, the Company may
not file for reimbursement from 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:
Six Months ended December 31, 1997:
Cemetery - Cemetery sales increased 10% over the prior years as a result of a
increased marker and foundation sales over the prior period. The increase was
attributed due to more aggressive competition by the company against the
memorial dealers by reducing sales price. The cost of sales increased 2% from
49% to 51% of sales. The increase is primarily due to a lower profit margin on
memorial sales.
Interest-Care Funds - Income decreased 21% due to timing of payments of trust
assets interest.
Other Income - Other Income decreased $6,040 due to insurance refund for
litigation expenses.
Selling Expenses - Selling expenses in relation to sales remained constant at
10%.
General & Administration Expenses - General and administration expenses
decreased 20% in comparison to prior period. The decrease was due to legal fees
associated with litigation.
Three months ended December 31, 1997:
Cemetery - Cemetery revenue increased 5% in comparison to prior period, due to
increased memorial sales. Operating expenses increased 8% from 47% to 55% in
comparison to cemetery revenue. The increase was caused by a 4% increase in
wages in accordance with the union contract, repairs and maintenance of the
abbey roof, and rehab of exterior office.
Interest-Care Fund - Income decreased 26% due to the timing of payments from
perpetual care funds.
Selling expenses - Selling expenses decreased 2% in comparison to prior year,
primarily due to a strategic decision to not replacing the sales manager.
General and Administration expenses - General and administration expenses
decreased $65,733 or 31% in comparison to prior period. The increased was due
to decreased legal fees associated with litigation.
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: February 6, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 653,233
<SECURITIES> 0
<RECEIVABLES> 451,895
<ALLOWANCES> 15,000
<INVENTORY> 701,095
<CURRENT-ASSETS> 2,358,665
<PP&E> 1,812,462
<DEPRECIATION> 1,321,708
<TOTAL-ASSETS> 2,799,665
<CURRENT-LIABILITIES> 915,525
<BONDS> 0
0
0
<COMMON> 130,968
<OTHER-SE> 1,875,500
<TOTAL-LIABILITY-AND-EQUITY> 2,799,665
<SALES> 1,265,606
<TOTAL-REVENUES> 1,357,610
<CGS> 642,012
<TOTAL-COSTS> 1,088,854
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,405
<INCOME-PRETAX> 233,351
<INCOME-TAX> 65,000
<INCOME-CONTINUING> 168,351
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 168,351
<EPS-PRIMARY> .129
<EPS-DILUTED> .124
</TABLE>