<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
FORM 10-K
Annual Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act
of 1934
For the Year Ended December 31, 1996
Commission File 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
incorporation or organization) Identification No.)
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
The number of shares outstanding of each of the issuer's classes of common
stock as of December 31, 1996.
Common Stock, $.01 Par Value - 1,903,853 shares
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of December 31, 1996.
Common Stock, $.01 Par Value - $256,220.
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Business
The majority of revenues for the 1996, 1995, and 1994 years were derived
from the water and garbage operations of two subsidiaries. Presently the
management of Holiday-Gulf Homes, Inc. believes these subsidiaries will
continue to provide a majority of the revenue.
(b) Narrative Description of Business
The Company has two utility company subsidiaries and a land development
subsidiary. The utility subsidiaries represent the operating source of
revenue. These companies bill customers on a monthly basis for water and
garbage charges. The utility companies are operated by an outside contractor.
The rates charged by the utility companies are set by the Florida Public
Service Commission.
Patents, etc.
There are no patents, licenses, franchises or concessions held by the
Company which it deems important and material for an understanding of its
business.
Research and Development
No money was spent by the Company during the years ended December 31,
1996, 1995, and 1994 on research activities.
Federal, State, and Local Regulations
The utility subsidiaries are subject to the Florida Public Service
Commission regulations. There are no material estimated capital expenditures
for the current or succeeding years. All reports required by the Florida
Public Service Commission have been filed.
Personnel
The Company as of December 31, 1996, employed one person full time. The
Company's employee is not represented by a union.
Seasonal Factors
The Company's operations as a whole are not significantly affected by
seasonal factors.
Competitive Conditions
The utility subsidiaries are regulated by a public authority, therefore
there are no competitive conditions.
<PAGE>
ITEM 2. PROPERTIES
The Company's activities are presently conducted primarily in Pasco
County, Florida. All of the Company's facilities are well maintained and
believed to be in good condition.
The following is a description of the location and general character of
property owned by the Company and its subsidiaries.
(a) The land development subsidiary owns a warehouse and office complex
located in New Port Richey, Florida for which they receive rent on
a monthly basis. The annual rents totaled $36,213 for 1996 and
$34,990 for 1995.
(b) The Company owns five well lots where Crestridge Utility Corporation
is located. These lots house the pumping station and wells.
(c) The Company owns two well lots where Holiday Gardens Utilities, Inc.
is located. These lots house the pumping station and wells.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) Annual meeting of stockholders was held June 29, 1996 for the
December 31, 1995 year.
(b) Elected directors and executive officers for the upcoming 1997 year
were:
Linda Emerick - Director and President
Thomas L. Burkett - Director and Vice President
Ronnie L. Mohr - Director and Secretary
Eileen M. Falla - Treasurer
(c) Other matters voted upon and the number of affirmative votes and
negative votes cast with respect to each such matter.
None.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Holiday-Gulf Homes, Inc.'s Common stock is traded on the over the counter
market. Generally, excluding limited or sporadic quotations, there is no
market for such stock. The number of record holders of Holiday-Gulf Homes,
Inc. Common Stock at December 31, 1996 was 471.
The Company distributed dividends of $95,193 in April, 1995, $95,192 in
April, 1993, $95,192 in October, 1990, $95,192 in December, 1989 and $95,192
in March, 1988. For the ten years prior to the 1988 dividend the Company had
not made any distributions.
ITEM 6. SELECTED FINANCIAL DATA
YEARS ENDED DECEMBER 31,
1996 1995 1994
Utility Revenues $ 277,670 $ 270,772 $ 265,500
Net Income $ 58,110 $ 54,661 $ 51,308
Net Income Per Common Share $ .030 $ .029 $ .027
Total Assets $ 275,789 $ 214,183 $ 256,155
Long-Term Debt $ -0- $ -0- $ -0-
Cash Dividends Declared Per Share $ -0- $ .05 $ -0-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(a) Liquidity and Capital Resources
The Company maintains 66% of its assets in cash and other
current assets. At present there are no plans for expansion and
no material repairs are anticipated for the utility companies. The
Company has been maintaining the water lines and meters on a
regular basis.
(b) Results of Operations
The majority of the revenues are generated by the utility
companies. These completed a rate increase audit with the Public
Service Commission in 1992. The new rates became effective in 1993.
The rates increased again in 1996 and 1995 due to indexing.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
Utility operating revenues increased 2.55% in 1996 to $277,670, up $6,898
over 1995 and increased 4.58% in 1996, up $12,170 over 1994. The increase in
revenues is due primarily to rate increases in water revenues.
The gross profit percentages for the years 1996, 1995 and 1994 of 50.55%,
50.16% and 49.18%, respectively, were maintained due to the stability in the
number of customers.
General and administrative expenses have increased as a percentage of
utility revenues compared to 1995 and 1994 as a result of increased
expenditures for insurance, stock agent fees, wages and related taxes and
office supplies. General and administrative expenses as a percentage of
utility revenues were approximately 29.20% in 1996 as compared to 28.83% and
28.95% for 1995 and 1994.
Income from other operations increased 6.48% in 1996 to $40,467, up
$2,463 over 1995 and increased 10.53% in 1996, up $3,855 over 1994. The
increase in revenues is due primarily to increases in rental income.
General and administrative expenses from other operations have decreased
as a percentage of income from other operations compared to 1995, and 1994 as
a result of management controlling operating costs. General and
administrative expenses from other operations as a percentage of income from
other operations were approximately 75.51 % in 1996 as compared to 80.11% and
80.38% for 1995 and 1994.
Net income increased 6.31% in 1996 to $58,110, up $3,449 over 1995 and
increased 13.26% in 1996, up $6,802 over 1994. The improvements to net income
are the result of improved water revenues, rental income and management
controlling costs.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements of Holiday-Gulf Homes, Inc., included
in the annual report to shareholders are incorporated herein by reference:
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Operations - Years ended December 31,
1996, 1995, and 1994
Consolidated Statements of Shareholders' Equity - Years ended
December 31, 1996, 1995, and 1994
Consolidated Statements of Cash Flows - Years ended December 31,
1996, 1995, and 1994
Notes to Consolidated Financial Statements - December 31, 1996
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AGE BUSINESS EXPERIENCE AND OTHER DIRECTORSHIPS
Linda Emerick 51 Director and President of Holiday-Gulf
Homes, Inc. since June 23, 1987. Mrs.
Emerick was the Secretary - Treasurer
of Hillrow, Inc. July, 1966 through
June, 1989. She is currently operating
a bookkeeping and management service.
Thomas L. Burkett 59 Director and Vice President of Holiday-
Gulf Homes, Inc. since June 23, 1987.
Mr. Burkett is the District Sales
Manager of the Gehl Company which
manufactures Agricultural Equipment.
Mr. Burkett has been their employee
for the past 30 years.
Ronnie L. Mohr 48 Director and Secretary of Holiday-Gulf
Homes, Inc. since December 30, 1992.
He has been engaged in farming for 32
years.He has been a Director and Board
Chairman of R & S Mohr Family Farms,
Inc. since 1981; he is Director of Ag-
One Coop, Inc. and Central Indiana
Power.
Eileen M. Falla 50 Treasurer of Holiday-Gulf Homes, Inc.
since June 23, 1987. Mrs. Falla has
been employed by Holiday-Gulf Homes,
Inc. since October, 1983.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
No executive officer of the Company received cash compensation in excess
of $20,000.
The Company has no annuity, pension or retirement plans. There are no
life, health, hospitalization or medical reimbursement plans other than group
plans which are available generally to all salaried employees.
There are no remuneration payments proposed to the officers or directors
to be made in the future directly or indirectly by the Company or any of its
subsidiaries pursuant to any existing plan or agreement.
Each director is reimbursed for travel and other expenses related to
attendance at directors' meetings. The directors receive a fee ranging from
$3,600 to $20,000 per year.
There were no stock appreciation rights or options to purchase securities
from the Company granted to, exercised by, or realized by an officer or
director of the Company during the fiscal years ended December 31, 1996 and
1995.
There were no loans from directors as of December 31, 1996 and 1995.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, as of December 31, 1996, with
respect to the ownership of Common Stock by all shareholders known by the
Company to be the beneficial owners of more than 5% of its outstanding Common
Stock, all directors, and all directors and officers of the Company as a
group. The percentages stated are based upon 1,903,853 issued shares of
Common Stock.
AMOUNT OF BENEFICIAL PERCENTAGE
OWNERSHIP OF TOTAL
NAME AND ADDRESS (NUMBER OF SHARES) SHARES
Anita Jane Duckworth 260,000 13.66%
3242 W Old Franklin Rd
Shelbyville, Indiana
Fred W. Garver 154,000 8.09%
3831 N London Rd
Fairland, Indiana
Linda & Wray Emerick 40,450 2.12%
8318 W 600 South
Edinburgh, Indiana
(Linda - Director & Officer)
Donald R. Pence 220,500 11.58%
6598 W 1150 S
Edinburgh, Indiana
E.J. Terpstra 110,000 5.78%
4681 N State Rd 9
Shelbyville, Indiana
Ronnie & Sarah Mohr 202,000 10.61%
5200 E 600 N
Greenfield, Indiana
(Ronnie - Director & Officer)
Thomas L. Burkett 50,000 2.63%
1609 N Fort Wayne Rd
Rushville, Indiana
(Director & Officer)
All Directors and Officers as a group (3) 292,450 15.36%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Exhibits and financial statement schedules
1. Financial Statements
Among responses to this ITEM 14 are the following financial statements
which are incorporated herein by reference in ITEM 8 above:
( i) Consolidated Balance Sheets - December 31, 1996 and 1995.
( ii) Consolidated Statements of Operations - Years ended
December 31, 1996, 1995, and 1994.
(iii) Consolidated Statements of Shareholders' Equity - Years
ended December 31, 1996, 1995, and 1994.
( iv) Consolidated Statements of Cash Flows - Years ended
December 31, 1996, 1995, and 1994.
( v) Notes to Consolidated Financial Statements - December 31,
1996.
2. Supplementary Data and Financial Statement Schedules
( i) Schedule I - Holiday-Gulf Builders, Inc., Detail Statement
of Non-Utility Operations as of and for the years ended
December 31, 1996 and 1995.
3. Exhibits required by Item 601 of Regulation S-K.
( 22) Subsidiaries of the Company.
PERCENTAGE OF
SECURITIES
JURISDICTION OF DIRECTLY OR INDIRECTLY
NAME INCORPORATION OWNED BY THE COMPANY
Holiday-Gulf Builders, Inc. Florida 100%
Crestridge Utility Corporation Florida 100%
Holiday Gardens Utilities, Inc. Florida 100%
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of the
period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By: (Signature and Title)
Date: March 11, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
(Signature and Title)
Linda Emerick, President and Director
Date:
(Signature and Title)
Thomas L. Burkett, Vice President and Director
Date:
(Signature and Title)
Ronnie L. Mohr, Secretary and Director
Date:
(Signature and Title)
Eileen M. Falla, Treasurer
Date:
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Holiday-Gulf Homes, Inc. and Subsidiaries
Holiday, Florida
We have audited the accompanying consolidated balance sheets of HOLIDAY-
GULF HOMES, INC. (a Minnesota corporation) AND SUBSIDIARIES as of December 31,
1996 and 1995, and the related consolidated statements of income,
shareholders' equity, and cash flows for the years ended December 31, 1996,
1995 and 1994. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Holiday-Gulf Homes, Inc. and Subsidiaries, as of December 31, 1996 and
1995, and the consolidated results of their operations and their cash flows
for the years ended December 31, 1996, 1995 and 1994 in conformity with
generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on page
23 is presented for the purposes of additional analysis and is not a required
part of the basic financial statements. Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ARNOLD AND CO., P.A.
January 8, 1997
</AUDIT-REPORT>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<CAPTION>
ASSETS
1996 1995
<S> <C> <C>
WATER, PLANT AND EQUIPMENT
Water Plant & Equipment, at Original Costs $ 292,991 $ 290,742
Less: Accumulated Depreciation (226,837) (219,278)
------------ ------------
Net Water Plant & Equipment $ 66,154 $ 71,464
------------ ------------
OTHER PROPERTY AND INVESTMENTS
Non-Utility Property less Accumulated
Depreciation of $45,999 in 1996 and
$42,395 in 1995 $ 26,884 $ 23,916
------------ ------------
Net Other Property & Investments $ 26,884 $ 23,916
------------ ------------
CURRENT ASSETS
Cash and Certificates of Deposits $ 168,031 $ 110,669
Accounts Receivable 5,932 2,778
Prepaids 3,038 2,801
Other Receivables 3,715 520
------------ ------------
Total Current Assets $ 180,716 $ 116,768
------------ ------------
OTHER ASSETS
Deposits $ 2,035 $ 2,035
------------ ------------
Total Other Assets $ 2,035 $ 2,035
------------ ------------
TOTAL ASSETS $ 275,789 $ 214,183
============ ============
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
<CAPTION>
SHAREHOLDERS' EQUITY AND LIABILITIES
1996 1995
<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 $10,102 as of
December 31, 1996 was appropriated for
unclaimed 1995, 1993, 1990, 1989 and 1988 dividends,
as of December 31, 1995 $7,882 was appropriated
for unclaimed 1993, 1990, 1989 and 1988 dividends) 10,206 (50,124)
------------ ------------
Total Capital Stock and Retained Earnings $ 255,019 $ 194,689
------------ ------------
CIAC, less accumulated amortization of
$124 in 1996 and $ 41 in 1995 $ 1,201 $ 1,284
------------ ------------
Total Capitalization $ 256,220 $ 195,973
------------ ------------
CURRENT LIABILITIES
Accounts Payable $ 16,770 $ 15,994
Accrued Liabilities 1,250 1,250
Deferred Income 1,549 966
------------ ------------
Total Current Liabilities $ 19,569 $ 18,210
------------ ------------
TOTAL CAPITAL AND LIABILITIES $ 275,789 $ 214,183
============ ============
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
OPERATING REVENUES
Water $ 133,874 $ 126,801 $ 121,302
Garbage 107,345 107,164 107,450
Streetlights 34,816 34,797 34,918
Transfer & Reconnect Fees 1,635 2,010 1,830
----------- ---------- ----------
Total Operating Revenues $ 277,670 $ 270,772 $ 265,500
----------- ---------- ----------
COST OF SALES
Garbage $ 83,680 $ 82,092 $ 82,092
Electric 5,876 5,275 5,298
Streetlights 14,409 14,345 14,314
Other Costs 33,349 33,235 33,224
----------- ---------- ----------
Total Cost of Sales $ 137,314 $ 134,947 $ 134,928
----------- ---------- ----------
Gross Profit $ 140,356 $ 135,825 $ 130,572
OPERATING EXPENSES
Depreciation & Amortization $ 7,842 $ 7,616 $ 6,768
General & Administration 81,077 78,052 76,870
----------- ---------- ----------
Total Operating Expenses $ 88,919 $ 85,668 $ 83,638
----------- ---------- ----------
Operating Income $ 51,437 $ 50,157 $ 46,934
OTHER INCOME
Rental and Late Fees $ 36,213 $ 34,990 $ 33,714
Interest 4,254 3,014 2,898
----------- ---------- ----------
Total Other Income $ 40,467 $ 38,004 $ 36,612
----------- ---------- ----------
<FN>
See accompanying notes and independent auditors' report.
</FN>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
1996 1995 1994
OTHER OPERATING EXPENSES
General and Administrative $ 30,555 $ 30,445 $ 29,430
Depreciation 3,239 3,055 2,808
----------- ---------- ----------
Total Other Operating Expenses $ 33,794 $ 33,500 $ 32,238
----------- ---------- ----------
Other Net Income, on Non-Utility $ 6,673 $ 4,504 $ 4,374
----------- ---------- ----------
Net Income Before Income Taxes
and Extraordinary Items $ 58,110 $ 54,661 $ 51,308
PROVISION FOR INCOME TAXES
Current $ 12,018 $ 11,422 $ 10,243
----------- ---------- ----------
Total Provision for Income Taxes $ 12,018 $ 11,422 $ 10,243
----------- ---------- ----------
Net Income before Extraordinary
Items $ 46,092 $ 43,239 $ 41,065
Extraordinary Items from
Utilization of Operating
Loss Carryforward $ 12,018 $ 11,422 $ 10,243
----------- ---------- ----------
NET INCOME $ 58,110 $ 54,661 $ 51,308
=========== ========== ==========
EARNINGS PER SHARE
Net Income before Extraordinary
Items $ .024 $ .023 $ .022
Extraordinary Items-Utilization
of Operating Loss Carryforward $ .006 $ .006 $ .005
----------- ---------- ----------
NET EARNINGS PER SHARE $ .030 $ .029 $ .027
=========== ========== ==========
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>
APPROPRIATED UNAPPROPRIATED TOTAL
COMMON STOCK CAPITAL RETAINED RETAINED SHAREHOLDERS'
SHARES AMOUNT SURPLUS EARNINGS EARNINGS EQUITY
<S> <C> <C> <C> <C> <C> <C>
December 31, 1994 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 1,903,853 $ 19,039 $ 225,774 $ 7,882 $ (58,006) $ 194,689
--------- --------- --------- ---------- ---------- ---------
Return of unclaimed
1995 Dividends - - - 2,220 - 2,220
Net Income - - - - 58,110 58,110
--------- --------- --------- ---------- ---------- ---------
December 31, 1996 1,903,853 $ 19,039 $ 225,774 $ 10,102 $ 104 $ 255,019
========= ========= ========= ========== ========== =========
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Cash flows from operating activities
Net Income $ 58,110 $ 54,661 $ 51,308
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and Amortization 11,080 10,673 9,576
Change in assets and liabilities
(Increase) decrease in
Receivables (6,349) 2,221 (3,399)
Other Assets -0- 1,015 (1,015)
Prepaid Assets (237) 554 (184)
Increase (decrease) in
Accounts Payable 776 (2,860) 3,234
Accrued Expenses & Deferred Income 583 261 125
---------- ---------- ----------
Net cash provided by operating activities $ 63,963 $ 66,525 $ 59,645
---------- ---------- ----------
Cash flows from investing activities
Improvements to Utility Company Equipment $ (2,249) $ (7,820) $ (7,136)
Office Complex Improvements (6,572) (3,080) (3,905)
CIAC -0- 1,325 -0-
---------- ---------- ----------
Net cash used in investing activities $ (8,821) $ (9,575) $ (11,041)
---------- ---------- ----------
Cash flows from financing activities
Payment of Dividends $ -0- $ (95,318) $ (794)
Return of Unpaid Dividends 2,220 -0- 2,335
---------- ---------- ----------
Net cash provided by (used in) financing
activities $ 2,220 $ (95,318) $ 1,541
---------- ---------- ----------
Net increase (decrease) in cash $ 57,362 $ (38,368) $ 50,145
Cash at beginning of year $ 110,669 $ 149,037 $ 98,892
---------- ---------- ----------
Cash at end of year $ 168,031 $ 110,669 $ 149,037
========== ========== ==========
Supplementary Disclosures of Cash Flow
Information
Interest Paid $ -0- $ -0- $ -0-
Income Tax Paid $ -0- $ -0- $ -0-
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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.
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 independent contractor. The
independent contractor also provides services for other utility companys in
the area. The independent contractors fees are based on a set amount per
customer plus any additional repairs.
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 in the year of disposal.
Amortization--
The Contribution in Aide of Construction (CIAC) costs are being amortized
over a period of sixteen years using the straight-line method.
CIAC represents $1,325 received in 1995 from a utility customer to help
pay for the cost of the new asset.
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.
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income Taxes--
The Company and its subsidiaries file consolidated Federal and State
Income Tax Returns.
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" (FAS 109). Under
the provisions of FAS 109, an entity recognizes deferred tax assets and
liabilities for future tax consequences of events that have been previously
recognized in the Company's financial statements or tax returns. The
measurement of deferred tax assets and liabilities is based on provisions of
the enacted tax law; the effect of the future changes in tax laws or rates are
not considered.
Earnings Per Share--
Earnings per share of Common Stock is computed based upon weighted
average number of shares outstanding for the year (1,903,853 shares in 1996
and 1995).
(2) - LONG-TERM DEBT:
There was no debt at the end of 1996 or 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.
(4) - PROPERTY AND EQUIPMENT:
The property and equipment accounts consisted of the following at
December 31, 1996 and December 31, 1995:
1996 1995
Land, Buildings, Office
Equipment and Furniture $ 72,883 $ 66,311
Water, Plant and Equipment 292,991 290,742
------------ ------------
Total Property and Equipment $ 365,874 $ 357,053
Less: Accumulated Depreciation (272,836) (261,673)
------------ -------------
Net Property and Equipment $ 93,038 $ 95,380
============ =============
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(5) - RELATED PARTY TRANSACTIONS:
There were no related party transactions during the 1996 and 1995 years.
(6) - LEASE:
The Company is leasing office space in Knollwood Plaza under a three-
year lease expiring in October, 1999. The lease is $450 per month.
The following is a schedule of future minimum lease payments:
December 31, 1997 $ 5,400
December 31, 1998 5,400
December 31, 1999 4,500
--------
Total $ 15,300
========
(7) - INCOME TAXES:
Pretax income from continuing operations for the years ended December 31,
was as follows:
1996 1995 1994
$ 58,110 $ 54,661 $ 51,308
Significant components of the provision for income taxes attributable
to continuing operations are as follows:
1996 1995 1994
Current:
Federal $ 9,040 $ 8,557 $ 7,589
State 2,978 2,865 2,654
------------ ------------ ------------
Total Current 12,018 11,422 10,243
Deferred:
Federal - - -
State - - -
------------ ------------ ------------
Total Provision $ 12,018 $ 11,422 $ 10,243
============ ============ ============
<PAGE>
HOLIDAY-GULF HOMES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(7) - INCOME TAXES: (CONTINUED)
There are no deferred tax assets and liabilities as of December 31, 1996,
1995 and 1994, due to management not expecting to realize any reduction of
taxes when the operating losses originated in 1983 and 1984.
The reconciliation of income tax computed at the U.S. federal statutory
tax rates (34%) to income tax expense is:
1996 1995 1994
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
Tax at U.S.
Statutory rates $ 19,757 34.00 $ 18,585 34.00 $ 17,445 34.00
Surtax exemption (10,055) (17.30) (9,881) (18.07) (9,613) (18.73)
State income tax-
net of federal
tax benefits 1,966 3.38 1,891 3.46 1,752 3.41
Non-deductible
expenses 350 .60 827 1.51 659 1.28
-------- ----- -------- ----- -------- -----
$ 12,018 20.68 $ 11,422 20.90 $ 10,243 19.96
======== ===== ======== ===== ======== =====
Operating Loss Carryforwards--
The Company has loss carryforwards totaling $302,152 that may be offset
against future taxable income. If not used, the carryforward will expire as
follows:
Year Year
Originated Expired
1983 1998 $ 102,843
1984 1999 171,592
1991 2006 27,717
---------
$ 302,152
=========
<TABLE>
SUPPLEMENTAL SCHEDULE I
HOLIDAY-GULF BUILDERS, INC.
DETAIL STATEMENT OF NON-UTILITY OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
<CAPTION>
1996 1995
<S> <C> <C>
INCOME
Rental Income $ 36,163 $ 34,950
Interest Income 4,254 3,014
Late Fees 50 40
------------- ------------
Total Income $ 40,467 $ 38,004
------------- ------------
EXPENSES
Salary $ 1,974 $ 1,872
Payroll Taxes 157 150
Group Insurance 295 295
General Insurance 198 62
Office Rent 572 572
Office Utilities 55 55
Telephone 200 193
Travel and Entertainment 869 804
Taxes - Tangible 12 11
Auto 120 120
Office Expense 186 183
Accounting, Legal and Consulting Fees 1,995 2,024
Bank Service Charges 13 375
Directors Fees 9,076 9,067
Postage and Freight 98 100
Stock, Licenses and Fees 1,162 971
Office Complex/Warehouse - Paper Supplies 414 298
Office Complex/Warehouse - Repairs and Maintenance 1,660 1,337
Office Complex/Warehouse - Depreciation 3,198 3,050
Office Complex/Warehouse - Real Estate Taxes 2,800 2,646
Office Complex/Warehouse - Lawn Services 2,700 2,878
Office Complex/Warehouse - Water and Sewer 461 401
Office Complex/Warehouse - Electric 4,420 4,394
Office Complex/Warehouse - Insurance 993 1,512
Warehouse - Other 125 125
Depreciation - Other 41 5
------------- ------------
Total Expenses $ 33,794 $ 33,500
------------- ------------
NET INCOME $ 6,673 $ 4,504
============= ============
<FN>
See accompanying notes and independent auditors' report.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 66,154
<OTHER-PROPERTY-AND-INVEST> 26,884
<TOTAL-CURRENT-ASSETS> 180,716
<TOTAL-DEFERRED-CHARGES> 0
<OTHER-ASSETS> 2,035
<TOTAL-ASSETS> 275,789
<COMMON> 19,039
<CAPITAL-SURPLUS-PAID-IN> 225,774
<RETAINED-EARNINGS> 10,206
<TOTAL-COMMON-STOCKHOLDERS-EQ> 255,019
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> 20,770
<TOT-CAPITALIZATION-AND-LIAB> 275,789
<GROSS-OPERATING-REVENUE> 277,670
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 88,919
<TOTAL-OPERATING-EXPENSES> 226,233
<OPERATING-INCOME-LOSS> 51,437
<OTHER-INCOME-NET> 6,673
<INCOME-BEFORE-INTEREST-EXPEN> 58,110
<TOTAL-INTEREST-EXPENSE> 0
<NET-INCOME> 58,110
0
<EARNINGS-AVAILABLE-FOR-COMM> 58,110
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 63,963
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>