<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended APRIL 30, 1996
----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
--------------- ---------------
Commission file number 33-1406
------------------------------------------
BUCK HILL FALLS COMPANY
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 24-0536840
- ------------------------------- ---------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
CRESCO ROAD, BUCK HILL FALLS, PENNSYLVANIA 18323
-------------------------------------------------
(Address of principal executive offices)(Zip Code)
(717) 595-7511
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(Registrant's telephone number, including area code)
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 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.
Yes X No
--------- ----------
As of April 30, 1996, the registrant had 73,537 shares of
Common Stock, no par value, outstanding.<PAGE>
<PAGE>
FORM 10-Q
BUCK HILL FALLS COMPANY
=======================
INDEX
Page
----
Part I: Financial Information
- ------ ---------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheet -
April 30, 1996 and October 31, 1995 1
Condensed Consolidated Statement of Operations -
Six Months and Three Months Ended April 30, 1996
and 1995 2
Condensed Consolidated Statement of Cash Flows -
Six months Ended April 30, 1996 and 1995 3
Notes to Condensed Consolidated
Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5-8
Part II: Other Information 9
- ------- -----------------
Signatures 10
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONDENSED CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------
APRIL 30,
1996 OCTOBER 31,
(UNAUDITED) 1995*
- --------------------------------------------------------------------------
ASSETS
======
<S> <C> <C>
CURRENT ASSETS:
Cash. . . . . . . . . . . . . . . . . . . $ 64,152 $ 31,460
Accounts receivable, net. . . . . . . . . 220,144 245,369
Prepaid expenses and other current
assets. . . . . . . . . . . . . . . . 13,795 30,228
---------- ----------
Total current assets. . . . . . . . 298,091 307,057
RESTRICTED CASH . . . . . . . . . . . . . . 85,616 73,799
PROPERTY, PLANT AND EQUIPMENT, Net. . . . . 2,699,387 2,756,391
DEFERRED COSTS, Net . . . . . . . . . . . . 10,253 12,623
---------- ----------
TOTAL. . . . . . . . . . . . . . $3,093,347 $3,149,870
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
CURRENT LIABILITIES:
Note payable, unsecured . . . . . . . . . $ 11,300 $ 11,300
Current portion of long-term debt . . . . 946,562 847,385
Accounts payable, trade . . . . . . . . . 12,356 37,283
Accrued expenses and other. . . . . . . . 305,587 183,355
---------- ----------
Total current liabilities . . . . . 1,275,805 1,079,323
CUSTOMER DEPOSITS . . . . . . . . . . . . . 85,616 73,800
LONG-TERM DEBT. . . . . . . . . . . . . . . 952,244 956,218
6-1/4% SUBORDINATED NOTES . . . . . . . . . 140,000 140,000
---------- ----------
Total liabilities . . . . . . . . . 2,453,665 2,249,341
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock. . . . . . . . . . . . . . . 1,251,370 1,251,370
Contributed capital . . . . . . . . . . . 799,227 799,227
Deficit . . . . . . . . . . . . . . . . . (1,410,915) (1,150,068)
---------- ----------
Total stockholders' equity. . . . 639,682 900,529
----------- ----------
TOTAL $3,093,347 $3,149,870
========== ==========
</TABLE>
*Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed consolidated financial statements.
1<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------
SIX MONTHS ENDED THREE MONTHS
ENDED
......APRIL 30...... ....APRIL 30......
1996 1995 1996 1995
- -------------------------------------------------------------------------------------
REVENUES. . . . . . . . . . . . . . . . . $ 631,603 $ 633,715 $ 339,990 $ 332,524
COST OF REVENUES. . . . . . . . . . . . . 679,610 607,509 355,654 342,411
--------- --------- --------- ---------
GROSS (LOSS) PROFIT FROM OPERATIONS . . . (48,007) 26,206 (15,664) (9,887)
GENERAL AND ADMINISTRATIVE EXPENSES . . . 164,116 261,149 101,501 131,946
--------- --------- --------- ---------
LOSS FROM OPERATIONS. . . . . . . . . . . (212,123) (234,943) (117,165) (141,833)
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Miscellaneous . . . . . . . . . . . . . 39,367 59,170 16,398 21,974
Interest expense. . . . . . . . . . . . (88,092) (72,938) (38,767) (31,842)
Capitalized interest. . . . . . . . . . - 21,455 - 5,528
--------- --------- --------- ---------
Other income (expense), net . . . . (48,725) 7,687 (22,369) (4,340)
--------- --------- --------- ---------
NET LOSS. . . . . . . . . . . . . . . . . $(260,848) $(227,256) $(139,534) $(146,173)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING . . . . . . . . . . . . . . 73,537 73,537 73,537 73,537
NET LOSS PER COMMON SHARE . . . . . . . . $ (3.55) $ (3.09) $ (1.90) $ (1.99)
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
2<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------
SIX MONTHS ENDED
......APRIL 30.......
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES:
Net loss. . . . . . . . . . . . . . . . . . . $(260,848) $(227,256)
Adjustments for noncash charges:
Depreciation and amortization . . . . . . . 107,011 89,823
Gain on sale of land. . . . . . . . . . . . - (15,013)
Changes in assets and liabilities . . . . . . 141,333 133,478
--------- ---------
Net cash used in operating activities . . . (12,504) (18,968)
--------- ---------
INVESTING ACTIVITIES:
Purchase of property and equipment. . . . . . (50,007) (94,411)
Proceeds from sale of land. . . . . . . . . . - 15,513
--------- ---------
Net cash used in investing activities . . . (50,007) (78,898)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of debt. . . . . . . . 171,014 102,270
Repayment of debt . . . . . . . . . . . . . . (75,811) (7,008)
--------- ---------
Net cash provided by financing
activities. . . . . . . . . . . . . . . . 95,203 95,262
--------- ---------
INCREASE (DECREASE) IN CASH . . . . . . . . . . . 32,692 (2,604)
CASH, BEGINNING OF PERIOD . . . . . . . . . . . . 31,460 20,194
--------- ---------
CASH, END OF PERIOD . . . . . . . . . . . . . . . $ 64,152 $ 17,590
========= =========
CASH PAYMENTS FOR:
Interest. . . . . . . . . . . . . . . . . . . . $ 92,467 $ 58,298
========= =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- -------------------------------------------------------------------------
NOTE 1: BASIS OF PRESENTATION
Although the interim condensed consolidated financial
statements of Buck Hill Falls Company and Subsidiary (the "Company") are
unaudited, it is the opinion of the Company's management that all normal
recurring adjustments necessary for a fair statement of the results for
the interim periods presented have been reflected therein. The results of
operations for any interim period are not necessarily indicative of
results that may be expected for the entire year.
These statements should be read in conjunction with the
consolidated financial statements and related notes included in the
Company's annual report on Form 10-K for the year ended October 31, 1995.
- --------------------------------------------------------------------------
4<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------
GENERAL
- -------
The Company's business, insofar as it relates to the provision of
recreational facilities, is largely seasonal in nature. As a result, the
Company's revenues and cost of revenues typically increase significantly
in its third and fourth fiscal quarters.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED
APRIL 30, 1996
COMPARED TO THE SIX MONTHS ENDED
APRIL 30,1995
- ------------------------------------------------
Revenues for the six months ended April 30, 1996, were comparable
to the same period in the prior year. The Company had an increase of
$9,812 in its water operations revenues as a result of a rate increase,
and an increase of $19,000 in snow plowing revenues as a result of heavy
snowfall amounts in 1996, but these increases were offset by a decrease in
golf cart rentals of $8,626 as a result of weather conditions in 1996 and
a decrease in golf and tennis dues revenues of approximately $3,000 as a
result of the Company's not offering a 5% discount for early payment of
dues as was done in 1995. The Company also reduced annual dues billed to
the 290 residents at Buck Hill Falls from $2,400 to $2,300 in 1996,
resulting in a decrease of $21,000 for the first six months of 1996.
Cost of revenues increased 12% as compared to the same period in
the previous fiscal year, primarily due to an increase in depreciation
expense of $34,000 related to capital improvements to the water system
which was put into operation in February 1995 and to the reallocation of
approximately $30,000 in administrative salaries to the related community
service operations to which the employees are currently performing
services. In addition, snow plowing costs increased $15,000 due to severe
weather conditions during 1996.
General and administrative costs decreased 37% in the first six
months of 1996 as compared to the same period in 1995. This decrease
relates to the reallocation of administrative salaries discussed above.
Bad debts decreased $29,814 due to the write off of uncollectible accounts
in 1995. During 1995, legal and accounting fees were incurred primarily
for an evaluation of a purchase offer from the Lot and Cottages Owners'
Association. Such costs were not incurred during 1996, resulting in a
decrease in legal and accounting fees of $32,615.
5<PAGE>
<PAGE>
Other income decreased 33% during 1996. During 1995, there was a
gain on sale of land of $15,013, proceeds from the sale of timber of
$11,202 and a bad debt recovery of $3,000, which were not present in 1996.
This decrease was partially offset by an increase in interest income of
$10,000.
Interest expense increased 71% as a result of interest of $37,680
on borrowings related to the water filtration system which was placed in
service in February 1995. There was also capitalized interest in 1995,
which is not present in 1996 due to the completion of the water filtration
system.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
APRIL 30, 1996
COMPARED TO THE THREE MONTHS ENDED
APRIL 30, 1995
- -------------------------------------------------
Revenues increased 2% as a result of cottage inspection revenues
being earned in the second quarter in 1996 and the first quarter in 1995
and cost of revenues increased 4% as a result of increased utilities and
fuel expenses as a result of colder weather in 1996.
General and administrative expenses decreased 23%, primarily due to
the reallocation of salary expense as explained above.
Other income decreased 25%, primarily due to the sale of timber for
$11,000 which took place during this period in 1995. This decrease is
partially offset by an increase in interest income of $5,000.
Interest expense increased as a result of interest on the water
system capital improvements loan. There was also capitalized interest in
1995, which was not present in 1996 due to the completion of the water
filtration system.
Liquidity and Capital Resources
- -------------------------------
At April 30, 1996, the Company had a working capital deficiency of
$977,714. Included in current liabilities is the entire $911,120
outstanding on the Company's $1,000,000 line of credit with a bank
(described in the following paragraph), which is payable on demand. An
additional $35,442 in scheduled principal payments on long-term debt are
due within the next twelve months.
6<PAGE>
<PAGE>
On July 24, 1992, the Company entered into a loan agreement with a
bank relating to a secured revolving line of credit in the amount of
$1,000,000 (the "Revolving Credit Facility"). Amounts borrowed under the
Revolving Credit Facility bear interest at the prime rate (8.25% at
April 30, 1996) plus 1-1/2%. Pursuant to the loan agreement,
approximately 2,600 acres of land and land improvements located in Barrett
Township, Monroe County, Pennsylvania, are pledged as collateral, along
with dues, assessments and fee revenues. The Revolving Credit Facility is
available through May 31, 1997, contingent upon the Company maintaining a
satisfactory financial position and subject to annual review of the
Company's financial statements by the bank. The loan agreement with the
bank provides that if, in the opinion of the authorized lending officers
of the bank, the Company's credit worthiness materially declines, the
credit line will cease to be available for future draws, and any existing
balance will be required to be fully amortized over a reasonable term.
The Company was required to make certain improvements in its water
system. In May of 1995, the Company entered into a $900,000 loan
agreement with a bank to refinance existing debt and to complete the
improvements. Principal is payable in monthly installments of $8,985 over
a 20-year amortization period. Interest is payable at the bank's base
rate (8.25% at April 30, 1996) plus 1-1/2%. The loan matures in May 2015
and is secured by a first mortgage on approximately 2,200 acres of land
and land improvements located in Barrett Township, Monroe County,
Pennsylvania and a collateral assignment of all revenue and assessments of
the Company's water operations.
The Company expects to meet its current liabilities (other than
payment of the entire $911,120 under the Revolving Credit Facility, which,
although not currently due, is classified as a current liability because
of the Revolving Credit Facility's demand terms) through increased
collections as a result of the seasonal increase in revenues which
typically occurs during the Company's third and fourth quarters through
the provision of recreational services. The Company does not anticipate
that the bank will demand payment under the Revolving Credit Facility.
Cash increased $32,692 for the six months ended April 30, 1996.
Cash provided by borrowings of $95,000 under the Company's revolving line
of credit and $16,000 in additional long-term debt was used to make
scheduled principal payments of $15,811 on long-term debt, pay operating
expenditures of $12,490 and capital expenditures of $50,007. Such capital
expenditures included improvements to roads and paving of $16,832,
purchase of a new automobile for $17,816 and purchase of furniture and
equipment for the golf club of $15,359.
At April 30, 1996, the Company had drawn $911,120 on its $1,000,000
line of credit, leaving $88,880 available.
7<PAGE>
<PAGE>
The Company incurred a net loss of $260,848 for the six months
ended April 30, 1996 and at April 30, 1996, the Company had a cumulative
deficit of $1,410,915 and a working capital deficiency of $977,714.
Although the Company's line of credit is available through May 31, 1997,
the ability to borrow under the line is contingent upon certain factors.
As a result, continuation of the Company in its present form is dependent
upon the successful maintenance of its debt terms, its ability to obtain
additional financing if needed and the eventual achievement of sustained
profitable operations.
Management believes that revisions in the Company's operating
requirements, including rate increases for amenities and the effect of the
water rate increase implemented in August 1995, provide the opportunity
for the Company to continue as a going concern. However, there is no
assurance that management's actions will be successful or, if they are not
successful, that the Company would be able to continue as a going concern.
8<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
None
9<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
BUCK HILL FALLS COMPANY
-----------------------------------
(Registrant)
Date: June 13, 1996 By: /s/ George J. Byron
--------------- ------------------------------
George J. Byron, President
(Principal Financial Officer)
Date: June 13, 1995 By: /s/ David B. Ottaway
--------------- -------------------------------
David B. Ottaway, Chairman
10<PAGE>
<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
FINANCIAL DATA SCHEDULE
ARTICLE 5 OF REGULATION S-X
FOR THE SECOND QUARTER ENDED APRIL 30, 1996
- --------------------------------------------------------------------------
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BUCK HILL
FALLS COMPANY'S QUARTERLY FORM 10-Q FOR THE QUARTER ENDED APRIL 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1996
<CASH> 64,152
<SECURITIES> 0
<RECEIVABLES> 301,004
<ALLOWANCES> 80,860
<INVENTORY> 0
<CURRENT-ASSETS> 298,091
<PP&E> 4,799,578
<DEPRECIATION> 2,100,191
<TOTAL-ASSETS> 3,093,347
<CURRENT-LIABILITIES> 1,275,805
<BONDS> 1,092,244
0
0
<COMMON> 1,251,370
<OTHER-SE> (611,688)
<TOTAL-LIABILITY-AND-EQUITY> 3,093,347
<SALES> 631,603
<TOTAL-REVENUES> 631,603
<CGS> 679,610
<TOTAL-COSTS> 679,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 88,092
<INCOME-PRETAX> (260,848)
<INCOME-TAX> 0
<INCOME-CONTINUING> (260,848)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (260,848)
<EPS-PRIMARY> (3.55)
<EPS-DILUTED> (3.55)
</TABLE>
