<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JANUARY 31, 1996
-----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 33-1406
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BUCK HILL FALLS COMPANY
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(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)
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(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 (on 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 January 31, 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
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Part I: Financial Information
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Item 1. Financial Statements
Condensed Consolidated Balance Sheet -
January 31, 1996 and October 31, 1995 3
Condensed Consolidated Statement of Operations -
Three Months Ended January 31, 1996 and 1995 4
Condensed Consolidated Statement of Cash Flows -
Three Months Ended January 31, 1996 and 1995 5
Notes to Condensed Consolidated
Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-9
Part II: Other Information 10
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Signatures 11
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<PAGE>
FORM 10-Q
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JANUARY 31,
1996 OCTOBER 31,
(UNAUDITED) 1995*
- --------------------------------------------------------------------------
ASSETS
======
<S> <C> <C>
CURRENT ASSETS:
Cash . . . . . . .. . . . . . . . . . . . $ 42,678 $ 31,460
Accounts receivable, net . . . . . . . . 235,950 245,369
Prepaid expenses and other current
assets . . . . . . . . . . . . . . . 27,136 30,228
----------- -----------
Total current assets . . . . . . . 305,764 307,057
RESTRICTED CASH . . . . . . . . . . . . . . 78,727 73,799
PROPERTY, PLANT AND EQUIPMENT, Net . . . . . 2,761,839 2,756,391
DEFERRED COSTS, Net . . . . . . . . . . . . 11,438 12,623
----------- -----------
TOTAL . . . . . . . . . . . . . . $3,157,768 $3,149,870
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
====================================
CURRENT LIABILITIES:
Note payable, unsecured . . . . . . . . . $ 11,300 $ 11,300
Current portion of long-term debt . . . . 896,478 847,385
Accounts payable, trade . . . . . . . . . 2,354 37,283
Accrued expenses and other . . . . . . . 289,262 183,355
----------- -----------
Total current liabilities . . . . . 1,199,394 1,079,323
CUSTOMER DEPOSITS . . . . . . . . . . . . . . 78,727 73,800
LONG-TERM DEBT . . . . . . . . . . . . . . . 960,432 956,218
6-1/4% SUBORDINATED NOTES . . .. . . . . . . 140,000 140,000
----------- -----------
Total liabilities . . . . . . . . . 2,378,553 2,249,341
----------- -----------
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<PAGE>
JANUARY 31,
1996 OCTOBER 31,
(UNAUDITED) 1995*
----------- -----------
<S> <C> <C>
STOCKHOLDERS' EQUITY:
Common Stock . . . . . . . . .. . . . . . 1,251,370 1,251,370
Contributed capital . . . . . . . . . . 799,227 799,227
Deficit . . . . . . . . . . . . . . . . (1,271,382) (1,150,068)
----------- -----------
Total stockholders' equity . . . . 779,215 900,529
----------- -----------
TOTAL . . . . . . . . . . . . . $3,157,768 $3,149,870
=========== ===========
</TABLE>
*Condensed from audited financial statements
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
=======================================
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
.....JANUARY 31.....
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
REVENUES . . . . . . . . . . . . . . $ 291,613 $301,191
COST OF REVENUES . . . . . . . . . . 323,956 265,098
----------- ---------
GROSS (LOSS) PROFIT FROM OPERATIONS . (32,343) 36,093
GENERAL AND ADMINISTRATIVE EXPENSES . 62,615 129,203
----------- ---------
LOSS FROM OPERATIONS . . . . . . . . (94,958) (93,110)
----------- ---------
OTHER INCOME (EXPENSE):
Miscellaneous . . . . . . . . . . 22,969 37,196
Interest, net of capitalized
interest of $15,927 in 1995 . . . (49,325) (25,169)
----------- ---------
Other income (expense net . . (26,356) 12,027
----------- ---------
NET LOSS . . . . . . . . . . . . . . $ (121,314) $(81,083)
=========== =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING . . . . . . . . . . . 73,537 73,537
=========== =========
NET LOSS PER COMMON SHARE . . . . . . $ (1.65) $ (1.10)
=========== =========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
.....JANUARY 31.....
1996 1995
- -------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY (USED FOR):
OPERATIONS:
Net loss . . . . . . . . . . . . . . . $(121,314) $ (81,083)
Adjustments for noncash charges:
Depreciation and amortization . . . . 30,385 13,171
Gain on sale of land . . . . . . . . - (15,013)
Changes in assets and liabilities . . . 83,488 (50,066)
---------- ----------
Net cash used for operations . . . (7,441) (132,991)
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INVESTMENTS:
Purchase of property and equipment . . . (34,648) (42,827)
Proceeds from sale of land . .. . . . . - 15,513
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Net cash used for investments . . . (34,648) (27,314)
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FINANCING:
Proceeds from issuance of debt . . . . 121,016 142,487
Repayment of debt . . . . . . . . . . (67,709) (2,376)
---------- ----------
Net cash provided by financing . . 53,307 140,111
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INCREASE (DECREASE) IN CASH . . . . . . . . 11,218 (20,194)
CASH, BEGINNING OF PERIOD . . . . . . . . . 31,460 20,194
---------- ----------
CASH, END OF PERIOD . . . . . . . . . . . . $ 42,678 $ -
========== ==========
CASH PAYMENTS FOR:
Interest . . . . . . . . . . . . . . . $ 49,325 $ 25,169
========== ==========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
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<PAGE>
BUCK HILL FALLS COMPANY AND SUBSIDIARY
======================================
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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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.
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-7-<PAGE>
<PAGE>
FORM 10-Q
BUCK HILL FALLS COMPANY AND SUBSIDIARY
- --------------------------------------
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 THREE MONTHS ENDED
JANUARY 31, 1996
COMPARED TO THE THREE MONTHS ENDED
JANUARY 31, 1995
- ----------------
Revenues decreased 3% while cost of revenues increased 22% for the
three months ended January 31, 1996 as compared to the same period in the
prior year.
In the first three months of fiscal 1996, golf revenues decreased
$18,563 and revenues from tennis, swimming and other outdoor activities
decreased $6,235. The decrease is primarily the result of the Company not
offering a 5% discount for early payment of dues which was offered during
fiscal 1995. The Company also decreased annual dues billed to the 290
residents at Buck Hill Falls from $2,400 to $2,300 in 1996, resulting in a
decrease of approximately $6,000 for the first three months of fiscal
1996. This decrease was partially offset by an increase of $12,500 in the
Company's water operation revenues due to a rate increase and an increase
in snowplowing revenue of $8,700.
The increase in cost of revenues is primarily caused by the
reallocation of approximately $30,000 in administrative salaries to the
related community services operations to which the employees are currently
performing services. Depreciation expense increased $16,900 as a result
of the water filtration system being put into operation in February 1995.
Snowplowing costs were $7,600 in 1996 due to inclement weather. Cost of
security increased approximately $5,000.
General and administrative expenses decreased 52% in 1996 as compared
to 1995. This decrease relates to the reallocation of administrative
salaries discussed above. Bad debt expense decreased approximately
$14,800 due to the decrease in the provision for uncollectible accounts.
Legal and accounting fees decreased approximately $21,000 during 1996
primarily due to Securities and Exchange Commission filings in 1995.
Other income decreased 38% during 1996. During 1995, there was a gain
on sale of land of $15,013 and sale of timber of $11,202 which were not
present in 1996. This decrease was partially offset by an increase of
interest income of $6,000.
-8-<PAGE>
<PAGE>
Interest expense increased 96% as a result of interest of $23,400 on
borrowings related to the water filtration system which was placed in
service in February 1995.
Liquidity and Capital Resources
- -------------------------------
At January 31, 1996, the Company had a working capital deficiency of
$893,630. Included in current liabilities is the entire $861,120
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 $35,358 in scheduled principal payments on long-term debt are
due within the next twelve months.
On July 24, 1592, 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 January 31,
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 has been 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 the 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 January 31, 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 $861,120 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 by $11,218 for the three months ended January 31, 1996.
Cash provided by borrowings of $45,000 under the Company's revolving line
of credit and $16,000 in additional long-term borrowing was used to make
scheduled principal payments Of $7,709 on long-term debt, pay operating
expenditures $7,941 and capital expenditures of $34,648. Such
expenditures included improvements to roads and paving of $16,382 and
purchase of a new automobile for $17,816.
-9-<PAGE>
<PAGE>
At January 31, 1996, the Company had drawn $861,120 on its $1,000,000
line of credit, leaving $138,880 available.
The Company incurred a net loss of $121,314 for the three months ended
January 31, 1996 and at January 31, 1996, the Company has a cumulative
deficit of $1,271,382 and a working capital deficiency of $893,630.
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.
-10-<PAGE>
<PAGE>
PART II OTHER INFORMATION
Item l. 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
-11-<PAGE>
<PAGE>
SIGNATURES
Pursuant to the retirements 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:March 15, 1996 By: s/ David B. Ottaway
----------------- ------------------------------
David B. Ottaway, Chairman
Date:March 14, 1996 By: s/ George J. Byron
----------------- -------------------------------
George J. Byron, President
(principal financial officer)
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM BUCK HILL FALLS
COMPANY'S QUARTERLY FORM 10-Q FOR THE QUARTER ENDED JANUARY 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 42,678
<SECURITIES> 0
<RECEIVABLES> 316,810
<ALLOWANCES> 80,860
<INVENTORY> 0
<CURRENT-ASSETS> 305,764
<PP&E> 4,784,217
<DEPRECIATION> 2,022,378
<TOTAL-ASSETS> 3,157,768
<CURRENT-LIABILITIES> 1,199,394
<BONDS> 1,100,432
<COMMON> 1,251,370
0
0
<OTHER-SE> (472,155)
<TOTAL-LIABILITY-AND-EQUITY> 3,157,768
<SALES> 291,613
<TOTAL-REVENUES> 291,613
<CGS> 323,956
<TOTAL-COSTS> 323,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 49,325
<INCOME-PRETAX> (121,314)
<INCOME-TAX> 0
<INCOME-CONTINUING> (121,314)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (121,314)
<EPS-PRIMARY> (1.65)
<EPS-DILUTED> (1.65)
</TABLE>
