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 September 30, 2000
[ ]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) (952) 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:
1,391,503
Transitional Small Business Disclosure Format (Check One):
{ )Yes {X}No
OAKRIDGE HOLDINGS, INC.
FORM 10-QSB
For the quarter ended September 30, 2000
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements:
(a) Condensed Consolidated Balance Sheets as of
September 30, 2000 (unaudited) and June 30, 2000
(b) Condensed Consolidated Statements of Operations
for the three months ended September 30, 2000 and
1999 (unaudited)
(c) Condensed Consolidated Statements of Cash Flows
for the three months ended September 30, 2000 and
1999 (unaudited)
(d) Notes to Condensed Consolidated Financial
Statements
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
ITEM 2. Changes in Securities and Use of Proceeds
ITEM 3-5. Not Applicable
ITEM 6. Exhibits and Reports on Form 8
SIGNATURES
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS September 30,2000 June 30,2000
(Unaudited)
________________ ___________
<S> <C> <C>
Cash & cash equivalents $1,195,092 $ 902,201
Receivables 3,134,127 3,250,317
Inventories:
Production 6,309,593 6,397,151
Cemetery and mausoleum space 618,176 629,045
Markers, urns & flowers 23,523 21,259
Deferred income taxes 43,000 146,000
Other current assets 158,042 60,500
---------- ----------
Total current assets 11,481,553 11,406,473
---------- ----------
Property, plant and equipment, at cost 4,821,731 4,793,397
Allowance for depreciation (1,697,732) (1,637,750)
---------- ----------
3,123,999 3,155,647
---------- ----------
Other assets 190,530 192,813
---------- ----------
$14,796,082 $14,754,933
========== ==========
</TABLE>
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES September 30,2000 June 30,2000
(Unaudited)
_________________ ____________
<S> <C> <C>
Notes payable bank $2,195,003 $2,195,003
Accounts payable 4,194,210 5,158,604
Deferred revenue 561,626 551,210
Accrued salaries & payroll taxes 389,250 314,723
Accrued perpetual care fund 202,523 172,337
Accrued marker and inscription costs 62,288 81,304
Accrued Interest 77,253 105,638
Customer Deposits 960,838 83,605
Current maturities of long-term debt 239,053 318,737
Other current liabilities 134,927 320,831
---------- ----------
Total current liabilities 9,016,971 9,301,992
---------- ----------
Long-term debt 3,474,683 3,406,838
---------- ----------
Total liabilities 12,491,654 12,708,830
---------- ----------
STOCKHOLDERS' EQUITY
Common stock & additional
paid-in-capital 2,156,926 2,156,926
Accumulated earnings (deficit) 147,502 (110,823)
---------- ----------
2,304,428 2,046,103
---------- ----------
$14,796,082 $14,754,933
========== ==========
</TABLE>
See accompanying notes to the condensed
consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended September 30,
2000 1999
__________________ _____________
<S> <C> <C>
Revenue, net:
Cemetery $653,542 $611,774
Aviation 5,384,594 2,362,781
Interest - Care Funds 56,635 59,532
Other 9,657 2,741
---------- ----------
Total revenue 6,104,428 3,036,828
---------- ----------
Operating expenses:
Cost of aviation sales 4,753,099 2,004,109
Cost of cemetery sales 363,106 335,843
Sales and marketing 131,266 163,335
General and administrative 280,020 248,480
---------- ----------
Total operating expenses 5,527,491 2,751,767
---------- ----------
Income from operations 576,937 285,061
Interest expense 185,612 84,421
---------- ----------
Income from continuing operations
before income taxes 391,325 200,640
Provision for income taxes 133,000 54,000
---------- ----------
Net income $258,325 $146,640
========== ==========
Net income per common share - basic $.186 $ .106
========== ==========
Weighted average number of common
shares outstanding - basic 1,391,503 1,388,003
========== ==========
Net income per common shares - diluted .114 .079
========== ==========
Weighted average number of common
shares outstanding - diluted 2,428,170 2,090,665
========== ==========
</TABLE>
See accompanying notes to the
condensed consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
OAKRIDGE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended September 30,
2000 1999
_________________ ____________
<S> <C> <C>
Cash flows from operating activities:
Net income $258,325 $146,640
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation & Amortization 62,265 62,255
Change in accounts receivable 116,190 (178,442)
Change in inventories 96,163 (561,894)
Change in deferred income taxes 103,000
Change in other assets ( 97,542) (67,619)
Change in accounts payable (964,394) 619,890
Change in accrued liabilities 759,057 (90,971)
---------- ----------
Net cash from operating activities 333,064 ( 70,141)
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment ( 28,334) (158,860)
---------- ----------
Net cash from investing activities ( 28,334) (158,860)
---------- ----------
Cash flows from financing activities:
Repayment on long-term debt (11,839) ( 24,318)
Proceeds from short-term borrowing 3,292
---------- ----------
Net cash from financing activities (11,839) ( 21,026)
---------- ----------
Net increase (decrease) in cash: 292,891 (250,027)
Cash at beginning of period 902,201 950,907
---------- ----------
Cash at end of period $1,195,092 $700,880
========== ==========
</TABLE>
See accompanying notes to the condensed
consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying Condensed Consolidated Financial Statements
include the accounts of Oakridge Holdings, Inc. (the "Company")
and its wholly-owned subsidiaries. All significant intercompany
transactions and balances have been eliminated. In the opinion
of management, the accompanying unaudited condensed consolidated
financial statements include all adjustments, consisting only of
normal recurring adjustments, necessary to present such
information fairly. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to Securities and Exchange Commission rules
and regulations. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and related notes included in the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30,
2000. Operating results for the three month period ended
September 30, 2000 may not necessarily be indicative of the
results to be expected for any other interim period or for the
full year.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. The most significant estimates in the financial
statements include but are not limited to accounts receivable,
sales, and accruals. Actual results could differ from those
estimates.
2. EARNINGS PER COMMON SHARE
Earnings per Common Share (EPS) is presented on both a basic and
diluted basis in accordance with the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings per Share."
Basic EPS is computed by dividing net income by the weighted
average number of shares of common stock outstanding during the
period. Diluted EPS reflects the maximum dilution that would
result after giving effect to dilutive stock options and
convertible debentures. The following table presents the
computation of basic and diluted EPS.
<TABLE>
Three Months Ended September 30,
2000 1999
---------- ----------
<S> <C> <C>
Income from continuing operations $258,325 $146,640
Average shares of common stock
outstanding used to compute basic
earnings per common share 1,391,503 1,388,003
Additional common shares to be issued
assuming exercise of stock options, and
conversion of convertible debentures 1,036,667 702,662
Additional income from continuing
operations, assuming conversion of
convertible debentures at the beginning
of the period $18,117 $18,117
Shares used to compute dilutive effect
of stock options and convertible
debentures 2,428,170 2,090,665
Basic earnings per common share
from continuing operations $.186 $.106
Diluted earnings per common share
from continuing operations $.114 $.079
</TABLE>
3. COMPREHENSIVE INCOME
Comprehensive income was $258,325 and $146,640 for the three
months ended September 30, 2000 and 1999, respectively.
Comprehensive income encompasses net income and "other
comprehensive income," which includes all other non-owner
transactions and events that change shareholders equity.
4. OPERATING SEGMENTS AND RELATED DISCLOSURES
The Company operations are classified into two principal industry
segments: cemeteries and aviation ground support equipment.
The Company evaluates the performance of its segments and
allocates resources to them based primarily on operating income.
The table below summarizes information about reported segments
for the three months ended September 30:
<TABLE>
Three Months Ended
September 30,2000:
Aviation
Ground Support
Equipment Cemeteries Corporate
___________ __________ _________
<S> <C> <C> <C>
Revenues $5,384,594 $710,177 $9,657
Depreciation 33,000 26,020 1,000
Gross Margin 631,495 347,071 9,657
Selling Expenses 76,641 54,625 -
General & Administrative
Expenses 91,560 115,762 72,698
Interest Expense 135,833 50 49,729
Income (loss) before
Taxes 327,461 176,634 (112,770)
Capital Expenditures 23,561 3,069 1,704
Segment assets:
Inventory 6,309,593 641,699 -
Property, Plant
& Equipment 2,483,754 2,321,817 16,160
Other Assets 45,202 - 145,328
</TABLE>
<TABLE>
Three Months Ended
September 30,1999:
Aviation
Ground Support
Equipment Cemeteries Corporate
___________ __________ _________
<S> <C> <C> <C>
Revenues $2,362,781 $671,306 $2,741
Depreciation 41,997 19,508 750
Gross Margin 358,672 335,463 2,741
Selling Expenses 113,511 49,824 -
General & Administrative
Expenses 95,425 96,145 56,160
Interest Expense 39,147 63 45,211
Income (loss) before
Taxes 110,589 189,431 (99,380)
Capital Expenditures 18,021 140,839 -
Segment assets:
Inventory 2,409,116 662,253 -
Property, Plant
& Equipment 2,094,296 846,751 3,958
Other Assets 43,801 - 6,687
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the Company's financial
position and operating results during the periods included in the
accompanying condensed consolidated financial statements.
Management's discussion and analysis of financial condition and
results of operations, as well as other portions of this
document, include certain forward-looking statements about the
Company's business and products, revenues, expenditures and
operating and capital requirements. The Private Securities
Litigation Reform Act of 1995 contains certain safe harbors
regarding forward-looking statements. From time to time,
information provided by the Company or statements made by its
directors, officers or employees may contain "forward-looking"
information subject to numerous risks and uncertainties. Any
statements made herein that are not statements of historical fact
are forward-looking statements including, but not limited to,
statements concerning the characteristics and growth of the
Company's markets and customers, the Company's objectives and
plans for the future operations and products and the Company's
expected liquidity and capital resources. Such forward-looking
statements are based on a number of assumptions and involve a
number of risks and uncertainties, and, accordingly, actual
results could differ materially.
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
PART I - FINANCIAL STATEMENTS
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION AND LIQUIDITY
The Company's liquidity needs arise from its debt service,
working capital and capital expenditures. The Company has
historically funded its liquidity needs with proceeds from equity
contributions, bank borrowing, cash flow from operations and the
offering of its subordinated debentures. The Company for the
first three months of fiscal year 2001 had a increase in cash of
$ 292,891 compared to a cash decrease in the same period in
fiscal year 2000 of $250,027. As of September 30, 2000, the
Company held cash and cash equivalents of $1,195,092.
During the three month period ended September 30, 2000, the
Company recorded net income of $258,325 and generated a increase
in net cash of $292,891. The Company's net cash provided by
operating activities was $333,064 in the first three months of
fiscal year 2000 compared to net cash used for operating
activities of $70,141 in the same comparable period in fiscal
year 2000. The increase in net cash from operating activities was
primarily due to net income and the decrease in accounts
receivable. Cash flows used in investing activities was $28,334
due to capital expenditures, and net cash used in financing
activities was $ 11,839 due to the repayment of long term debt
incurred to acquire the building and land of the aviation ground
support equipment business. The remaining increases and decreases
in the components of the Company's financial position reflect
normal operating activity.
The Company continues to maintain a good financial position, with
net working capital of $2,464,582, an increase of $360,101 since
June 30, 2000. Current assets amounted to $11,481,553 and current
liabilities were $9,016,971, resulting in a current ratio of 1.3
to 1, which resulted in a slight change from June 30, 2000. With
debt of $12,491,654 and equity of $2,304,428 at September 30,
2000, the debt as a percentage of total capital was 84.4%,
compared with 86.1% at June 30, 2000. The decrease of 1.7% is
primarily due to the decrease in accounts payable.
The Company's present working capital has continued to improve
and is sufficient to meet current operating needs.
Capital expenditures for the first three months of fiscal year
2001 were $28,334 compared with $158,860 the same period in
fiscal year 2000. These investments reflect the Company's
continuing program to achieve business growth and to improve
productivity and product quality in the aviation ground support
equipment business and new roads for the cemetery business. The
Company anticipates that it will spend approximately $250,000 on
capital expenditures during the next three quarters of fiscal
year 2001. The Company will be able to finance these capital
expenditures primarily from cash flow from operations.
The stock price ranged from $1.00 to $2.00 per share during the
first three months of Company's fiscal year 2001. The Company's
book value per share at September 30, 2000 was $1.66 compared
with $1.38 at June 30, 2000. The Company's annualized return
from continuing operations on average equity for the three months
of fiscal year 2001 was 45% compared with 28% for the three
months of fiscal year 2000. The annualized return from
continuing operations on average assets was 7% compared with 6.8%
for the three months of fiscal year 2000.
The Company has available through two banks, a $3,225,000 credit
facility. As of September 30, 2000 there was $2,195,003 in short-
term debt and $667,797 in long-term debt outstanding under these
facilities.
As indicated by the above, the Company's financial position and
debt capacity should enable it to meet its current and future
requirements. As additional resources are needed, the Company
should be able to obtain funds readily and at competitive costs.
INFLATION
Because of the relatively low levels of inflation experienced
this past fiscal year, and as of September 30, 2000, inflation
did not have a significant effect on the Company's results in the
first three months of fiscal year 2001.
RESULTS OF OPERATIONS
FIRST QUARTER OF FISCAL YEAR 2001 COMPARED
WITH THE FIRST QUARTER OF FISCAL YEAR 2000
First quarter revenues of $6,104,428 were an increase of
$3,067,600 or 101%, when compared to 2000's comparable period.
Aviation ground support equipment sales increased $3,021,813 due
to a contract for the sale of bobtails to the United States Air
Force.
Cemetery revenue increased $41,768 to $653,542, or 7% over the
prior comparable period revenue of $611,774. The increase is
primarily due to increased sales of markers and mausoleum space
during the first quarter of fiscal year 2001.
The cemetery gross profit margin decreased to 44.4% in the first
quarter of fiscal year 2001 or .3% when compared to 44.7% for the
corresponding period in fiscal year 2000. The decrease is
immaterial.
Gross profit margin for the aviation ground support equipment
business decreased to 11.5% in first quarter of fiscal year 2001
or 3.7% when compared to 15.2% for the corresponding period in
fiscal year 2000. The decrease is due to selling more equipment
mounted on a truck chassis.
Interest from cemetery care funds decreased $2,897 or 4.9% in
first quarter of fiscal year 2001 due to timing of interest
payments and recognition of trust income.
Other income is immaterial.
Selling expenses for the cemetery business in relation to sales
remained at 8% in fiscal year 2001 and 2000.
Selling expenses for the aviation ground support equipment in
first quarter of fiscal year 2001 in relation to sales decreased
3.4% in comparison to first quarter of fiscal year 2000. The
decrease was due to a decrease in sales commissions on the
government contract.
General and administrative expenses, which are expenses
associated with supporting the Company's day-to-day management of
its existing businesses and corporate increased $16,538 or 29.4%.
The increase was primarily due to increase in professional fees
and officer salary.
Cemetery general and administrative expenses in relation to sales
increased $19,617 or 2% in the first quarter of fiscal year 2001.
The increase is primarily due to the hiring of a temporary
employment agency to enter interment cards into the new HMIS
system software package and a recruiting agency fee paid to hire
a new employee.
Aviation ground support equipment business general and
administrative expenses in the first quarter of fiscal year 2001
decreased $3,865 or 2% in comparison to the first quarter of
fiscal year 2000. The decrease was primarily due to one less
office staff.
Depreciation and amortization expenses remained stable at
$62,265 for the first quarter of fiscal year 2001 and 2000.
Interest expense in the first quarter of fiscal year 2001 was
$185,612 or a increase of $103,426 or 122.5% in comparison to the
first quarter of fiscal year 2000 expense of $84,421. The
increase is due to greater inventory on hand.
RESULTS OF OPERATIONS
FIRST QUARTER OF FISCAL YEAR 2000 COMPARED
WITH FIRST QUARTER OF FISCAL YEAR 1999
First quarter revenues of $3,036,828 were a decrease of $530,265
or 14.9%, when compared to 1999's comparable period. The
decrease of $556,397 was due to the aviation ground support
equipment sales composite, which in the first quarter of fiscal
year 2000 consisted of towable equipment, rather than vehicle
mounted equipment as in the prior first quarter fiscal year 1999.
Cemetery revenue increased $10,561 to $611,774, or 2% over the
prior comparable period revenue of $601,213, primarily due to
increased sales of memorials during the first quarter of fiscal
year 2000.
The cemetery gross profit margin decreased to 45% in first
quarter of fiscal year 2000 or 2% when compared to 47% for the
corresponding period in fiscal year 1999. The increase in cost of
goods sold was due a 18% increase in health insurance premiums
and the fall weed spray being done in the first quarter of fiscal
year 2000.
Gross profit margin for the aviation ground support equipment
business decreased to 15% in first quarter of fiscal year 2000 or
5% when compared to 20% for the corresponding period in fiscal
year 1999. The decrease in gross profit margin was due to
increased labor costs, due to the hiring of two engineers and
inefficiencies in production.
Interest from cemetery care funds increased $16,155 or 37% in
first quarter of fiscal year 2000 due to timing of interest
payments and recognition of trust income.
Other Income is immaterial.
Selling expenses for the cemetery business in relation to sales
remained at 8% in fiscal year 1999 and 1998.
Selling expenses for the aviation ground support equipment in
first quarter of fiscal year 2000 in relation to sales increased
.9% in comparison to first quarter of fiscal year 1999. The
increase was due to less sales in first quarter of fiscal year
2000.
General and administrative expenses, which are expenses
associated with supporting the Company's day-to-day management of
its existing businesses and corporate increased $75,187 or 43%.
Cemetery general and administrative expenses in relation to sales
remained constant at 16% for the first quarter of fiscal year
2000 and 1999.
Aviation ground support equipment business general and
administrative expenses in the first quarter of fiscal year 2000
increased $51,866 or 119% in comparison to the first quarter of
fiscal year 2000. The increase is primarily due to hiring of two
office personnel for $17,292, consulting fees of $5,771 for
computer network, web page on internet, and changing the
technical manuals to CD Rom, and prior year had a collection of
bad debts for $61,000 which reduced general and administrative
expenses.
Corporate general and administrative in the first quarter of
fiscal year 2000 was $56,160 or a decrease of $8,891 in
comparison to first quarter of fiscal year 1999 expenses of
$65,801 The decrease is due to reduced professional fees
associated with the prior year acquisition.
Depreciation and amortization expenses increased 31% to $62,255
for the first quarter of fiscal year 2000 or $14,798 in
comparison to the first quarter of fiscal year 1999. The increase
is a result of the aviation ground support equipment assets
purchased the prior year.
Interest expense in the first quarter of fiscal year 2000 was
$84,421 or a decrease of $16,669 or 16% in comparison to the
first quarter of fiscal year 1999 expense of $101,090. The
decrease in interest expense was attributable to lower financing
of vehicles and chassis used for production.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is from time to time involved in ordinary litigation
incidental to the conduct of its businesses. The Company
believes that none of its pending litigation will have a material
adverse effect on the Company's businesses, financial condition
or results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8 were filed during the quarter.
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: November 13, 2000
