<PAGE>
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Period Ended June 30, 1996 Commission File Number
Registration Number 0-7205
HOLIDAY-GULF HOMES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0916277
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4804 Mile Stretch Drive, Holiday, Florida 34690
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (813) 937-3293
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of June 30, 1996.
Class Outstanding at June 30, 1996
Common Stock, $.01 par value 1,903,853 shares
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
INDEX
PAGE
PART 1. - FINANCIAL INFORMATION NUMBER
Item 1. Financial Statements: (Unaudited)
Consolidated Balance Sheets - June 30, 1996
and December 31, 1995........................................ 3-4
Consolidated Statements of Operations - For the three
months ended June 30, 1996 and 1995 and the six months
ended June 30, 1996 and 1995................................. 5-6
Consolidated Statements of Shareholders'
Equity - For the year ended December 31,
1995 and the six months ended June 30, 1996.................. 7
Consolidated Statements of Cash Flows - For
the six months ended June 30, 1996
and June 30, 1995............................................ 8
Notes to Consolidated Financial Statements..................... 9-12
Accountants' Report............................................ 13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................... 14
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
<TABLE>
PART 1. FINANCIAL INFORMATION
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS
June 30, December 31,
1996 1995
(Unaudited) (Audited)
<S> <C> <C>
WATER, PLANT AND EQUIPMENT
Water Plant & Equipment, at Original Costs $ 291,903 $ 290,742
Less: Accumulated Depreciation (222,943) (219,278)
------------ ------------
Net Water Plant & Equipment $ 68,960 $ 71,464
------------ ------------
OTHER PROPERTY AND INVESTMENTS
Non-Utility Property, less Accumulated
Depreciation of $44,108 in 1996 and
$42,395 in 1995 $ 25,200 $ 23,916
------------ ------------
Net Other Property & Investments $ 25,200 $ 23,916
------------ ------------
CURRENT ASSETS
Cash and Certificates of Deposits $ 135,798 $ 110,669
Accounts Receivable 3,545 2,778
Prepaids 792 2,801
Other Receivables 1,040 520
------------ ------------
Total Current Assets $ 141,175 $ 116,768
------------ ------------
OTHER ASSETS
Deposits $ 2,035 $ 2,035
------------ ------------
Total Other Assets $ 2,035 $ 2,035
------------ ------------
TOTAL ASSETS $ 237,370 $ 214,183
============ ============
<FN>
See accompanying notes and accountants' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
SHAREHOLDERS' EQUITY AND LIABILITIES
June 30, December 31,
1996 1995
(Unaudited) (Audited)
<S> <C> <C>
SHAREHOLDERS' EQUITY
Capital Stock, 5,000,000 shares authorized
and 1,903,853 shares issued and
outstanding in 1996 and 1995 $ 19,039 $ 19,039
Paid-In-Capital 225,774 225,774
Retained Earnings (of which $7,882 as of
June 30, 1996 and December 31, 1995 was
appropriated for unclaimed 1993, 1990,
1989 and 1988 dividends) (26,706) $ (50,124)
------------ ------------
Total Capital Stock and Retained Earnings $ 218,107 $ 194,689
------------ ------------
CIAC, less accumulated amortization of
$83 in 1996 and $41 in 1995 $ 1,242 $ 1,284
------------ ------------
Total Capitalization $ 219,349 $ 195,973
------------ ------------
CURRENT LIABILITIES
Accounts Payable $ 16,283 $ 15,994
Accrued Liabilities 1,305 1,250
Deferred Income 433 966
------------ ------------
Total Current Liabilities $ 18,021 $ 18,210
------------ ------------
TOTAL CAPITAL AND LIABILITIES $ 237,370 $ 214,183
============ ============
<FN>
See accompanying notes and accountants' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Audited)
<S> <C> <C> <C> <C>
OPERATING REVENUES
Water $ 33,847 $ 32,554 $ 66,290 $ 63,954
Garbage 29,792 27,512 57,073 54,534
Sreetlights 9,643 8,923 18,510 17,573
Transfer & Reconnect Fees 435 540 930 990
----------- ----------- ----------- ----------
Total Operating Revenues $ 73,717 $ 69,529 $ 142,803 $ 137,051
----------- ----------- ----------- ----------
COST OF SALES
Garbage $ 20,920 $ 20,523 $ 41,840 $ 41,046
Electric 1,496 1,526 2,843 2,828
Streetlights 3,592 3,597 7,174 7,185
Other Costs 8,564 8,403 17,611 15,928
----------- ----------- ----------- ----------
Total Cost of Sales $ 34,572 $ 34,049 $ 69,468 $ 66,987
----------- ----------- ----------- ----------
Gross Profit $ 39,145 $ 35,480 $ 73,335 $ 70,064
OPERATING EXPENSES
Depreciation & Amortization $ 1,904 $ 1,864 $ 3,807 $ 3,703
General & Administration 19,605 16,858 46,148 43,421
----------- ----------- ----------- ----------
Total Operating Expenses $ 21,509 $ 18,722 $ 49,955 $ 47,124
----------- ----------- ----------- ----------
Operating Income $ 17,636 $ 16,758 $ 23,380 $ 22,940
OTHER INCOME
Other Income (loss) net of
expenses on Non-Utility
Operations $ (676) $ 1,598 $ 38 $ 1,554
----------- ----------- ----------- ----------
Net Income Before Income
Taxes and Extraordinary
Items $ 16,960 $ 18,356 $ 23,418 $ 24,494
<FN>
See accompanying notes and accountants' report.
</FN>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended For the six months ended
June 30, June 30,
1996 1995 1996 1995
(Unaudited) (Audited)
PROVISION FOR INCOME TAXES
Current $ 3,520 $ 3,610 $ 5,015 $ 4,585
----------- ----------- ----------- ----------
Total Provision for Income
Taxes $ 3,520 $ 3,610 $ 5,015 $ 4,585
----------- ----------- ----------- ----------
Net Income Before Extraordinary
Items $ 13,440 $ 14,746 $ 18,403 $ 19,909
Extraordinary Items From
Utilization of Operating
Loss Carryforward 3,520 3,610 5,015 4,585
----------- ----------- ----------- ----------
NET INCOME $ 16,960 $ 18,356 $ 23,418 $ 24,494
=========== =========== =========== ==========
EARNINGS PER SHARE
Net Income Before Extraordinary
Items $ .007 $ .008 $ .010 $ .011
Extraordinary Items -Utilization
of Operating Loss Carryforward $ .002 $ .002 $ .003 $ .002
----------- ----------- ----------- ----------
NET EARNINGS PER SHARE $ .009 $ .010 $ .013 $ .013
=========== =========== =========== ==========
<FN>
See accompanying notes and accountants' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE SIX MONTHS ENDED
JUNE 30, 1996
<CAPTION>
APPROPRIATED UNAPPROPRIATED TOTAL
COMMON STOCK CAPITAL RETAINED RETAINED SHAREHOLDERS'
SHARES AMOUNT SURPLUS EARNINGS DEFICIT EQUITY
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994
(Audited) 1,903,853 $ 19,039 $ 266,306 $ 8,007 $ (58,006) $ 235,346
--------- ---------- --------- ---------- ---------- ---------
Payment of 1995
Dividends - - (40,532) - (54,661) (95,193)
Payment of unclaimed
prior dividends - - - (125) - (125)
Net Income - - - - 54,661 54,661
--------- ---------- --------- ---------- ---------- ---------
December 31, 1995
(Audited) 1,903,853 $ 19,039 $ 225,774 $ 7,882 $ (58,006) $ 194,689
--------- ---------- --------- ---------- ---------- ---------
Net Income
(Unaudited) - - - - 23,418 23,418
--------- ---------- --------- ---------- ---------- ---------
June 30, 1996
(Unaudited) 1,903,853 $ 19,039 $ 225,774 $ 7,882 $ (34,588) $ 218,107
========= ========== ========= ========== ========== =========
<FN>
See accompanying notes and accountants' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
For the six months ended
June 30,
1996 1995
(Unaudited)
<S> <C> <C>
Cash flows from operating activities
Net Income $ 23,418 $ 24,494
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 5,337 5,208
Change in Assets and Liabilities
(Increase) decrease in
Other Receivables (520) 2,992
Accounts Receivable (767) 222
Prepaid Assets 2,009 1,939
Deposits - (1,256)
Increase (decrease) in
Accounts Payable 289 (1,564)
Accrued Expenses 55 85
Deferred Income (533) 2,648
---------- ----------
Net cash provided by operating activities $ 29,288 $ 34,768
---------- ----------
Cash flows from investing activities
Capital Expenditures $ (4,159) $ (3,121)
Payment of Dividends - (95,317)
---------- ----------
Net cash used in investing activities $ (4,159) $ (98,438)
---------- ----------
Net increase (decrease) in cash $ 25,129 $ (63,670)
Cash and cash equivalents at beginning of period 110,669 149,037
---------- ----------
Cash and cash equivalents at end of period $ 135,798 $ 85,367
========== ==========
Supplementary Disclosures of Cash Flow Information
Interest Paid $ -0- $ -0-
Income Tax Paid $ -0- $ -0-
<FN>
See accompanying notes and accountants' report.
</FN>
</TABLE>
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Principles of Consolidation--
The accompanying consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
Basis of Presentation--
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six month
period ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and footnote
thereto included in the Company's annual report on Form 10-K for the year
ended December 31, 1995.
Recognition of Income from Utility Operations--
The majority of the Company's revenues are generated by two Utility
Companies. These Companies recognize revenues on a monthly basis. The use
is based on actual meter readings by an outside firm.
Depreciation--
Depreciation included in the accompanying financial statements has
been provided by the straight-line method at rates calculated to amortize the
cost of the assets over their estimated useful lives as follows:
YEARS
Utility Plant and Equipment 5 - 40
Building and Improvements 5 - 30
Maintenance and repairs of property and equipment are charged to
expense as incurred, whereas renewals and betterments are capitalized. When
properties are replaced, retired, or otherwise disposed of, the cost and
related accumulated depreciation are removed from the accounts. Any gain or
loss is credited or charged to operations.
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) - SUMMARY OF SIGNIFICANT POLICIES (CONTINUED):
Amortization--
The CIAC costs are being amortized over a period of sixteen years
using the straight-line method.
Cash--
For the purpose of the statement of cash flows, cash includes cash on
hand, cash in checking and money market accounts, and Certificates of Deposit.
Income Taxes--
The Company and its subsidiaries file consolidated Federal and State
Income Tax Returns.
Investment tax credits (which have been immaterial) are accounted for
by the flow-through method as a reduction to the provision for income taxes.
Earnings Per Share--
Earnings per share of Common Stock is computed based upon weighted
average number of shares outstanding for the period (1,903,853 shares in 1995
and for the first six months of 1996).
(2) - LONG-TERM DEBT:
There was no debt as of June 30, 1996 or December 31, 1995.
(3) - STOCK OPTION PLAN:
The Company has adopted a qualified stock option plan whereby options
may be granted to key employees to purchase a maximum 50,000 shares of the
Company's common stock at not less than 10% of the fair market value of the
shares at date of grant. The options are exercisable in installments of not
more than 20% of the shares covered thereby during any one-year period,
subject to the right of cumulation. The options expire five years from the
date of grant. No options have been granted under this plan.
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(4) - PROPERTY AND EQUIPMENT:
The property and equipment accounts consisted of the following at June
30, 1996 and December 31, 1995:
June 30, December 31,
1996 1995
Land and Buildings $ 69,308 $ 66,311
Utility Plant and Equipment 291,903 290,742
------------ ------------
TOTAL PROPERTY AND EQUIPMENT $ 361,211 $ 357,053
Less: Accumulated Depreciation 267,051 (261,673)
------------ ------------
NET PROPERTY AND EQUIPMENT $ 94,160 $ 95,380
============ ============
(5) - RELATED PARTY TRANSACTIONS:
There were no related party transactions during the six months ended
June 30, 1996 and 1995.
(6) - LEASE:
The Company is leasing office space in Knollwood Plaza under a three-
year lease expiring in November, 1996. The rental is $450 per month.
The following is a schedule of future minimum rental payments:
December 31, 1996 $ 4,950
December 31, 1997 -
--------
Total $ 4,950
========
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIATED FINANCIAL STATEMENTS (UNAUDITED)
(7) - INCOME TAXES:
Components - Current and Deferred--
The provisions for income taxes consist of the following:
June 30, December 31,
1996 1995
Current $ 5,015 $ 11,422
Deferred - -
------------ ------------
INCOME TAX EXPENSE $ 5,015 $ 11,422
Less: Utilization of Operating
Loss Carryforward (5,015) (11,422)
------------ ------------
NET INCOME TAX $ NONE $ NONE
============ ============
Operating Loss Carryforwards--
The Company has loss carryforwards at December 31, 1995 totaling
$361,291 that may be offset against future taxable income. If not used, the
carryforward will expire as follows:
Year Year
Originated Expired
1983 1998 $ 161,982
1984 1999 171,592
1991 2006 27,717
----------
$ 361,291
==========
PAGE>
<REVIEW-REPORT>
ACCOUNTANTS' REPORT
To the Board of Directors
Holiday Gulf Homes, Inc. and Subsidiaries
Holiday, Florida
We have reviewed the accompanying consolidated condensed balance
sheets of Holiday Gulf Homes, Inc. (a Minnesota corporation) and subsidiaries
as of June 30, 1996 and the related consolidated condensed statements of
income, shareholders' equity and cash flows for the six months then ended June
30, 1996 and 1995, in accordance with Statements of Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants. All information included in these consolidated condensed
financial statements is the representation of the management of Holiday Gulf
Homes, Inc..
A review of interim financial statements consists principally of
inquiries of Company personnel and analytical procedures applied to financial
data. It is substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying June 30, 1996 consolidated condensed
financial statements in order for them to be in conformity with generally
accepted accounting principles.
The financial statements for the year ended December 31, 1995, were
audited by us, and we expressed an unqualified opinion on them in our report
dated January 15, 1996, but we have not performed any auditing procedures
since that date.
ARNOLD AND CO., P.A.
Ocala, Florida
July 24, 1996
</REVIEW-REPORT>
<PAGE>
HOLIDAY GULF HOMES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS:
For the quarter ended June 30, 1996, revenues increased $4,188 net
income decreased $1,396 from the same quarter in 1995. For the six months
ended June 30, 1996, revenues increased $5,752 net income decreased $1,076
compared to the previous year.
Operating results include a loss from other revenues of $676 for the
quarter ended June 30, 1996 compared to income of $1,598 for the comparable
period ended June 30, 1995.
Management of the Company does not have any immediate plans for future
developments or material capital expenditures. The Company does not currently
own any properties for sale, therefore, the revenues from the utility
companies and any interest earned will be used for operating expenses.
FINANCIAL CONDITION AND LIQUIDATIONS:
The Company does not anticipate any material capital expenditures in
the near future for the utility companies, therefore, there should not be any
liquidity problem.
<PAGE>
PART II. OTHER INFORMATION
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
Item 1. Legal Proceedings.
There were no reportable events for the quarter ended June 30, 1996
nor have there been any material developments during the quarter.
Item 2. Changes in Securities.
The rights of the holders of registered securities have not been
materially modified, limited or qualified by the issuance or modification of
any class of securities.
There are no working capital restrictions or other limitations upon
payment of dividends.
Item 3. Default upon Senior Securities.
There have been no defaults in the payment of principal, interest or
any other material liabilities.
Item 4. Submission of Matters to a Vote of Security Holders.
(a) Annual Meeting of stockholders was held on June 29, 1996.
(b) Elected directors and executive officers were:
Linda Emerick - President and Director
Thomas L. Burkett - Vice President and Director
Ronnie L. Mohr - Secretary and Director
Eileen Falla - Treasurer
(c) Other matters voted upon and the number of affirmative votes and
negative votes cast with respect to each such matter.
None
Item 5. Other Information.
The Company declared and distributed a dividend of $.05 per share in
October, 1989. The declared dividend required the use of $95,192 cash.
The Company declared and distributed a dividend of $.05 per share in
December, 1990. The declared dividend required the use of $95,193 cash.
The Company declared and distributed a dividend of $.05 per share in
April, 1993. The declared dividend required the use of $95,192 cash.
The Company declared and distributed a dividend of $.05 per share in
April, 1995. The declared dividend required the use of $95,192 cash.
<PAGE>
PART II OTHER INFORMATION, CONTINUED
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K.
DESCRIPTION
(a) Exhibits Ex-27
(b) Report on Form 8-K None
<PAGE>
SIGNATURES
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
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.
HOLIDAY-GULF HOMES, INC.
(Registrant)
DATE: ____________________________ ___________________________________
LINDA EMERICK, PRESIDENT -
PRINCIPAL FINANCIAL OFFICER
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 68,960
<OTHER-PROPERTY-AND-INVEST> 25,200
<TOTAL-CURRENT-ASSETS> 141,175
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 2,035
<TOTAL-ASSETS> 237,370
<COMMON> 19,039
<CAPITAL-SURPLUS-PAID-IN> 225,774
<RETAINED-EARNINGS> (26,706)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 218,107
0
0
<LONG-TERM-DEBT-NET> 0
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 19,263
<TOT-CAPITALIZATION-AND-LIAB> 237,370
<GROSS-OPERATING-REVENUE> 142,803
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 49,955
<TOTAL-OPERATING-EXPENSES> 119,423
<OPERATING-INCOME-LOSS> 23,380
<OTHER-INCOME-NET> 38
<INCOME-BEFORE-INTEREST-EXPEN> 23,418
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> 23,418
0
<EARNINGS-AVAILABLE-FOR-COMM> 23,418
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 29,288
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
