U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the fiscal year ended August 31, 1996.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from to .
Commission File No. 0-17594
AMCOR CAPITAL CORPORATION
(Name of small business issuer in its charter)
Delaware 33-0329559
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
52-300 Enterprise Way, Coachella, California 92236
(Address of principal executive offices) (Zip Code)
(619) 398-9520
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Exchange Act:
[None]
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.002 par value
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days. [x] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
[x] Yes [ ] No
The issuer's revenues for its most recent fiscal year were $10,868,352.
Based on the average bid and asked prices, the aggregate market value of
the voting stock held by non-affiliates of the registrant on November
25, 1996 was $23,193,132.
The number of shares outstanding of the registrant's only class of
Common Stock, $.002 par value, was 11,596,566 on November 25, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held on February 7, 1997 are incorporated herein by
reference into Part III.
<PAGE>
PART I
Item 1. DESCRIPTION OF BUSINESS
Historical Summary
AMCOR Capital Corporation ("Company") was incorporated in Delaware on
March 10, 1988. The Company's consolidated operations, as of August 31,
1996, include its wholly-owned subsidiary, Sun Goddess Farms, Inc.,
a California corporation ("SGF"), AMCOR Properties, Inc., and AMCOR
Biomass Farms, LLC. Prior to July 1, 1993, its consolidated operations
included those of a venture capital affiliate which was principally
organized to syndicate limited partnerships to engage in various
agribusiness activities, including the purchase and development of
agricultural land. Since 1981, the Company, either directly or through
subsidiaries and affiliates, generally acted as a general partner and/or
managing agent of the limited partnerships.
During 1996, the Company sold its wholly-owned subsidiary, ACI Farms,
Inc.("ACI"), to an affiliate for a nominal amount, which reflected its
book value. ACI previously functioned as a farm management Company and
this business was succeeded by SGF. In 1995, the Company reported that
it sold its wholly-owned subsidiary, AMCOR Properties, Inc. ("API") to
an affiliate. In 1996, this transaction was reversed, there being no
gain or loss to either party.
Description of Business
The Company is engaged principally in agribusiness and the management
and development of certain farm and real estate properties--both for
its own account and for other entities. It functions largely as a
vertically integrated developer/producer of "early" table grapes in
Southern California's Coachella Valley, operating one of the largest
processing/cold storage facilities in that region. It also manages
date acreage in the Coachella Valley for sale to date processors. The
Company presently has approximately 13,300 total acres under management.
See "Management's Discussion and Analysis or Plan of Operation-
Liquidity and Capital Resources."
The business of the Company historically has consisted of two operating
divisions (i) the agribusiness division and (ii) the land
planning/development division. The Company's principal agribusiness
operations involve the production and processing of table grapes, all
of which are located in the Coachella Valley of Southern California,
where the Company, along with its affiliated partnerships, has a
dominant market share. Land planning/development activities are located
in Southern California and Texas (Houston and San Antonio). Most
of the non-agricultural properties are owned by partnerships for which
the Company or affiliates of the Company are the managing agent. During
fiscal 1996, the Company's revenues were derived principally from the
following two sources: (i) farming operations (including packing/cold
storage services) and (ii) management of real estate development
partnerships.
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The following table sets forth approximate acreage managed by the
Company or acreage supplying grapes for its Coachella processing
facility as of November 25, 1996:
<TABLE>
<CAPTION>
ACRES
-----------------------------------------
Owned By Owned By Total
Geographic Location Partnerships Company Other Acres
<S> <C> <C> <C> <C>
California:
Coachella Valley:
Table Grapes 232 (1) 871(1) 1,102(2) 2,205
Dates 140 --- 65(3) 205
Raw Agricultural Land 746 --- --- 746
Rancho California:
Pre-Development Land 600 --- --- 600
Vista:
Industrial Lot 2 --- --- 2
Other:
Pre-Development 36 --- --- 36
----- ----- ----- ------
Subtotal California 1,756 871 1,167 3,794
Oregon (Irrigated Farmland) 2,000 6,000 --- 8,000
Texas: (Pre-Development)
Houston 174 --- --- 174
Las Palomas (San Antonio) 1,199 155 --- 1,354
----- ----- ----- -----
Total 5,129 7,026 1,167 13,322
===== ===== ===== ======
<FN>
(1) Includes 82 acres owned by a partnership and 151 acres owned by the
Company, which are leased to a third party, subject to a purchase
option.
(2) Represents acreage owned by third parties, for which the Company
processes table grapes through its Coachella facility.
(3) Represents acreage owned by a third party and managed by the
Company.
(4) The Company owns a 50% interest in the 6,000-acre irrigated farming
complex located south of the Columbia River in eastern Oregon.
The farm, which is a major potato producing operation, is leased
to the other 50% partner.
</TABLE>
Farming Operations
The Company manages the agribusiness land (table grapes and dates) owned
by the Company and its affiliated partnerships for which, depending on
the profitability of each partnership, it may receive management fees.
The Company also receives income for the packing and cold storage
services the Company provides for some of the partnerships and third
parties. The agribusiness land managed by the Company totals
approximately 2,200 acres in California (this excludes approximately
638 acres of pre-development land). A large portion of the agricultural
acreage is vineyard property producing table grapes.
Table Grapes
The Company manages and/or processes through its packing/cold storage
facility approximately 2,200 acres of table grapes in the Coachella
Valley of Southern California, annually producing approximately 1.5
million boxes (20 pounds per box). This generates annual revenues for
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the Company in excess of $10 million (although this amount can vary
considerably depending on production and market prices). As such, the
Company is one of the largest producer/shippers in the "early market,"
which harvests the season's first table grapes from early May through
June. Farming, harvesting, and marketing expenses average 80 to 85%
of market value.
The Company's table grape operations are vertically integrated from
production through packing, cold storage, and shipping. The Company
leases an 80,000 square foot packing and cold storage plant, which it
also uses as its headquarters in Coachella, processing approximately
1.5 million boxes annually of both proprietary and non-proprietary
table grape production, which represents about 15% of the 10 million-box
Coachella Valley table grape market.
The table grapes are marketed under the Company's proprietary "Sun
Goddess" label through an exclusive arrangement with C.H. Sales, a major
Coachella Valley based produce marketer. The grapes are sold both to
national and international markets. Principal customers include Vons,
Safeway, Lucky, Kroger, Super Markets General, Winn-Dixie, and dozens
of other super market chains and independent buyers. The Company grows
and ships Flame, Perlettes, and Thompson Seedless table grapes.
Desert Valley Date
On May 31, 1995, the Company sold its 50% partnership interest in Desert
Valley Date ("DVD") to the other 50% partner. The sales consideration
was $2,200,000, which resulted in a gain to the Company of $200,000.
The Company's principal reason for the sale was to concentrate its
resources in the grape industry. The Company, through its managed
affiliates, will continue to manage and produce dates, which will be
sold and processed through DVD, although these activities will be
scaled down as the Company focuses expansion efforts on vineyard
production.
For the 1995 crop production year, the Company managed 205 acres
(150 producing) of dates with approximately 1.3 million pounds
of production. For the 1996 crop production year, the Company
again managed 205 acres (170 producing), with production estimated
to be 1.3 million pounds. For 1997, the overall acreage base is
expected to remain the same, with 100% now commercially producing,
with production approximating 1.6 million pounds. There are
approximately 5,000 acres of dates in the Coachella Valley, which
represents well over 90% of the total U.S. date industry. The major
portion of the date harvest occurs during the months of September
through December, which also coincides with the highest volume
sales/shipping months.
Management of Real Estate Land Partnerships
At present, the Company manages eight real estate development
partnerships holding 2,166 acres of land in California and Texas,
with a total initial land cost of approximately $20 million.
In addition to earning management fees, the Company's ability to
derive revenues from these partnerships is generally contingent on
the Company's ability to sell the partnerships' land at a profit.
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Certain partnership agreements provide that, upon the sale of land,
the limited partners will receive a specified return on their
investment prior to any profit participation by the Company.
Due to the generally depressed real estate market since 1990,
particularly in California, the Company has generated only nominal
revenues from its land planning/development operations. However,
in fiscal 1996, a major subdivision/golf course project
("Las Palomas") was commenced southeast of San Antonio, Texas that
did generate considerable revenues for the Company, with significantly
increased revenues forecast for future years. This includes a 1,300-lot
subdivision (owned by a managed partnership) and an 18-hole championship
golf course (owned by the Company).
Other Operations
In June, 1993, the Company entered into a financing transaction with the
lessee of 667 acres of wine grape vineyards located in California and
owned by the Company and an affiliated partnership. The transaction
provided for the payment by the lessee of an aggregate of $3.5 million
to the Company and the affiliated partnership, of which the Company's
share approximated $1.5 million. Pursuant to the terms of an option
agreement, the Company and an affiliated partnership could have
regained title to this land if by December 1, 1995 the $3.5 million
purchase price was repaid, plus the cost of any capital improvements
made to the property by the lessee. On November 30, 1995 the Company
sold, in a non-monetary transaction, its San Luis Obispo vineyards and
the related repurchase option to an affiliated partnership for that
partnership's 50% interest in an 6,000-acre farming operation located
in eastern Oregon.
Competition
The Company's Coachella Valley table grape and date agribusiness
activities are supported by a 2,400-acre production base which results
in the Company, including certain affiliated partnerships, being a
dominate supplier for these products in the "early market," which
harvests the season's first table grapes from early May through June.
The Company competes directly with other Coachella-based "early market"
table grape producers, as well as other producers located in Mexico.
During the past six years, the total industry's Coachella Valley table
grape producing acreage has decreased by almost 25% from an estimated
20,000 acres in 1989 to an estimated 15,000 acres at the end of fiscal
1996, due primarily to the removal of marginal acreage and decreased
prices resulting from competition. It appears now that this acreage
base has more or less stabilized.
The Company's date operations for the 1996 production year will now
approximate 140 acres located in the Coachella Valley, which in turn
represents well over 90% of the total U.S. date industry. The Company
competes directly with several other local date producers/processors.
Because the time required to develop a commercially productive date
garden can take up to 10 years, and costs $15,000 to $20,000 per acre,
coupled with the fact that virtually all new date seedlings
("offshoots") are controlled by a few existing producers, the date
industry remains a difficult and capital-intensive industry to enter,
which has served to lessen overall competition.
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Employees
The Company has 50 full-time employees, of whom seven were employed in
administration and 43 in agribusiness. During the seasonal peak
periods, employment can exceed 2,500. None of the Company's employees
are represented by a labor union and the Company has experienced no work
stoppages. The Company believes that there is an ample supply of labor
to meet the Company's peak seasonal requirements.
Item 2. DESCRIPTION OF PROPERTY
The Company's executive offices and main table grape processing cold
storage facility occupy approximately 80,000 square feet of leased space
at 52-300 Enterprise Way, Coachella, California, 92236. The initial
lease term expires on October 31, 2002, with options for an additional
15 years. The annual rental is $156,000 per year, tied to a cost of
living index.
The Company's headquarters facility is located within the Coachella
Valley Enterprise Zone. Under California Revenue Tax Code, the Company
is offered a number of California tax benefits.
Item 3. LEGAL PROCEEDINGS
The Company is not involved in any pending legal proceedings other than
legal proceedings occurring in the ordinary course of business. Such
other legal proceedings in the aggregate are believed by management to
be immaterial.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the last
quarter of the fiscal year ended August 31, 1996.
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock has traded in the over-the-counter market
since 1989, trading on the OTC Bulletin Board. Set forth below are the
high and low bid prices of the Common Stock between September 1, 1995
and August 31, 1996, as reported by a member firm of the National
Association of Securities Dealers, Inc., that effects transactions in
OTC Bulletin Board stocks, and which acts as one of the market makers
for the Company's Common Stock. The quotations listed below reflect
inter-dealer prices, without retail mark-up, mark-down or commission,
and may not represent actual transactions.
<TABLE>
<CAPTION>
Period Fiscal Quarter High Low
<S> <C> <C> <C> <C>
Fiscal 1996 1st Qtr 1.125 0.75
2nd Qtr 0.93 0.687
3rd Qtr 0.937 0.50
4th Qtr 1.00 0.625
<FN>
At August 31, 1996, there were 1,209 stockholders of record of the
Company's Common Stock.
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<PAGE>
The Company has paid no dividends on its Common Stock and does not
expect to pay dividends in the foreseeable future.
</TABLE>
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
For the fiscal year ended August 31, 1996, as compared to the prior year
ended August 31, 1995:
Overview
The Company, together with its affiliated partnerships, has its
primary operations in the Coachella Valley of California, where it
historically has been, and still remains, a major table grape producer
and processor. It also grows dates, but sold its 50% interest in a major
date processing facility in 1995 to its joint venture partner.
The Company also manages pre-development land located
in Southern California and Texas, and during fiscal 1996, commenced
development of the 1,300 lot "Las Palomas" residential subdivision
located 30 miles southeast of San Antonio, Texas, which includes an
18-hole championship golf course. The lot development project is
owned by a managed partnership; the golf course, which officially
opened November 15, is owned and operated by the Company. In addition,
a wholly-owned affiliate, AMCOR Biomass Farms, LLC, recently completed
a pilot project to process "clean green" waste and other organic
materials for major Southern California disposal companies on a
600-acre site controlled by the Company, and commenced commercial
operations during the Company's first quarter of fiscal 1997.
Results of Operations
Revenues
During fiscal 1996, the Company's revenues were derived principally
from the following two sources: (i) farming operations (including
packing and cold storage services), and (ii) management/development
fees for real estate development land partnerships. For the twelve
months ended August 31, 1996, the Company's gross revenues decreased
by $718,000 (6%) to $10,868,000 as compared to 1995, primarily due
to significantly reduced table grape production which decreased 45%,
from 877,000 boxes in 1995 to 482,000 boxes in 1996. This was an
industry-wide phenomenon due to inadequate winter dormancy, which
resulted in a "short" crop, but with correspondingly higher market
prices. Based on prior history, it is probable that the inadequate
dormancy, or lack of "winter chill", will not be a trend. The Company
also had no earnings from Desert Valley Date, as it sold its 50%
interest therein in 1995. The lower table grape revenues were
augmented by increased fee income related to the Las Palomas
subdivision development project.
Crop Sales and Other Farm Income
The Company generates fees and profits from its table grape operations,
both from third parties and its affiliates. During a typical season,
the table grape packing facility (which is leased to the Company)
processes approximately 1.5 million boxes of table grapes, for which
the combined gross processing and cooling fees typically exceed $2
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million. Due to the "short" industry crop, this processing volume
fell to 1.1 million boxes, down 27% from 1995. The Company does
expect its revenues from this source to continue to gradually increase
over the next several years, as additional properties are acquired and
more acreage is farmed by the Company.
Item 7. FINANCIAL STATEMENTS
The consolidated financial statements of the Company and its
subsidiaries are submitted as a separate section of this Annual
Report on Form 10-KSB on pages F-1 through F-31.
Management and Other Fees
A indicated, management and other fee income increased 71% over 1995
to $1,767,000, the principal reason being development and management
fee income related to the Las Palomas (San Antonio-area) subdivision
development, where 1,300 home sites have been planned and are currently
under development. During 1996, 206 lots were subdivided and obtained
HUD approval, allowing the marketing program to commence. The lots
are owned by managed affiliates, and are being marketed for prices
ranging from $17,000 to over $40,000 per lot, for which the Company
earns management and development fees.
In addition, the Company has earned in the past, and will continue to
earn, management and accounting fees from its other managed affiliated
partnerships, although this source will continue to decrease as
additional partnership terminations are completed. Some management
fees are earned as a share of crop profits, although this is a
contingent source and not realizable in unprofitable periods.
The accounting fees generally range from $5,000 to $10,000 per year
per partnership.
Equity in Income (Loss) of Investee
Due to the 1995 sale of the Company's 50% interest in Desert Valley
Date, the Company earned no income from that source in 1996. A $40,000
"loss of investee" was incurred, which is related to the Company's 50%
interest in an 6,000-acre Oregon farming joint venture, which is leased
to its 50% partner.
Other Income
Other income consists primarily of interest income and miscellaneous
income. The Company generates interest income from receivables from
certain of its related partnerships, affiliates and third party notes.
Other income decreased by $183,000 (19%) to $786,000 primarily due to
reduced interest income caused by the payment to the Company of a $3
million secured note receivable in December, 1995.
Real Estate Fees and Profit Participation
The Company earns fees in connection with its management of real
estate development partnerships. During the management phase and upon
termination of these partnerships, the Company can earn substantial fees
based on development/land sale profits. In prior years, the depressed
real estate marketed has rendered this source of income relatively
minor. However, with the emerging San Antonio ("Las Palomas") development
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project, and with what appears to be an improving California market,
this source of income is expected to grow considerably in future years.
Operating Costs and Expenses
The Company's total operating costs and expenses were $8,553,000 and
$9,825,000 for the fiscal years 1996 and 1995, respectively, for a
decrease of 13%. These costs and expenses include, among others,
farming and harvesting costs and cost of crops sold, wages and salaries
and depreciation.
Farming Costs and Cost of Crops Sold
Farming costs and costs of crops sold decreased $1,070,000 (13%)
to $7,002,000 primarily as a result of the significantly smaller
table grape crop. Farming costs as a percentage of crop revenues
were 84% for fiscal 1996 and 85% for fiscal 1995.
Other Operating Expenses
Other operating expenses decreased $259,000 (36%) to $451,000
primarily as a result of capitalization of costs related to the
Las Palomas development project.
Wages and Salaries
Wages and salaries decreased $48,000 (7%) to $615,000 primarily due to a
consolidation of the accounting department eliminating one employee and
certain salary expense allocated to the Las Palomas development project.
Income From Operations
The Company posted operating income of $2,315,000 in fiscal 1996, an
increase of 31% over the $1,761,000 realized the prior year,
primarily due to an increase in management fee income related to the
development of the Las Palomas subdivision project.
Other Income (Expense)
Total other expense decreased $475,000 (85%) from $575,000 in fiscal
1995 to $100,000 in the current year. This decrease was due principally
to an $830,000 gain related to the sale of its San Luis Obispo Vineyard
and repurchase option. This gain was partially offset by somewhat
higher interest costs, which increased 31% to $930,000 as the result
of acquiring additional assets.
Liquidity and Capital Resources
The Company's liquidity, including its ability to access conventional
credit sources, has significantly improved over the last two years
primarily due to the following: (i) consistent management of cash
flow, (ii) implementation of effective cost cutting measures, (iii)
successful crop harvests, and (iv) disposal of marginal or non-producing
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assets. The Company anticipates that the continued recovery of the
Company's common stock price should provide access to capital markets.
These changes have positioned the Company to obtain credit from more
conventional, and less costly, sources.
In addition to current liabilities of $3,145,000 at August 31, 1996,
the Company has $15,682,000 long-term debt. However, long and short term
liquidity are expected to continue to improve due to: (i) the Company
obtaining anticipated harvest and working capital financing from
conventional credit sources, and (ii) the Company having entered into
financing arrangements which will provide for substantially all
agricultural and farming costs related to the 1997 harvest,
and (iii) the generation of significant new revenues from the
Las Palomas development project and golf course, and from its AMCOR
Biomass Farms, LLC organic recycling/processing business. The terms of
the current harvest financing arrangements are interest at prevailing
rates at the time of borrowing, which interest accrues until maturity,
with principal and interest due and payable in full at the time the
harvest proceeds are realized. These financing arrangements will be
collateralized by the 1997 harvest.
During fiscal 1997, the Company intends to continue its management plan
to acquire and/or develop additional table grape vineyards which are
located in the Coachella Valley, particularly the white, earlier
maturing varieties. This may include the sale of some red-variety
vineyards where it presently has very high production, the objective
being to achieve a balance between the red and white grapes. It is
intended that these acquisitions be financed through term loans provided
by institutional lenders, and/or the issuance by the Company of purchase
money notes. Management believes that the acquisition of these
properties will enhance profitability through increased operating
income. The continued acquisition of additional vineyards is in keeping
with the Company's fully-integrated agri-business operations.
Looking Ahead
The Company traditionally has been engaged in agribusiness, with
additional revenues derived from partnership management, which included
real estate development partnerships--principally, land that was once
farmland that has evolved into a higher and better use. This latter
source of income, until the Company commenced development of the Las
Palomas project, has been relatively insignificant since 1989. This is
expected to change in the future, based on the positive response for lot
sales.
Las Palomas Country Club Estates is a 1,350-acre project located in
Wilson County, approximately 30 miles southeast of San Antonio, Texas.
The land, except for 155 acres which constitutes the golf course, is
owned by a managed partnership. During 1996, the Company acquired the
golf course land and constructed an 18-hole, 7,000-yard championship
course, which, when fully completed, will cost approximately $3 million.
Lot sales have commenced on Sections I and II, which contain 206
single-family lots, priced generally from $17,000 to over $40,000.
Under contract, the Company has performed all subdivision planning,
engineering, and infrastructure services, and funded the cost for the
golf course, providing an attractive amenity to future lot owners.
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For its services, the Company will receive certain management fees,
equal to 50% of gross lot sales. In addition, the Company has entered
into the fast growing recreational services industry by developing and
operating a championship golf course. A five to seven year sell-out
is expected for 1,000 single-family lots, plus 300 multi-family units,
during which the Company could generate up to $17 million in development
fees, plus income from golf course operations. Subsequent to August 31,
the Company became a 50% participant in a homebuilding venture
(Las Palomas Builders, LLC), and construction is now in process for
several homes.
The Company is confident of the success of this project, primarily
based on demographics favoring the San Antonio marketplace. This city,
with over 1.1 million residents, has only 18 golf courses, which
equates to a very low ratio of one course for each 60,000 residents,
plus there is annual tourist traffic of over 10 million. In fact,
Wilson County, the contiguous county southeast of San Antonio's
Bexar County, has no golf course. There is an extreme shortage of
golf course-oriented lots in the San Antonio area, which is expected
to generate demand for the Company's project--not only from local
residents, but from the high volume of tourist trade.
The lack of golf courses in this market is partially attributable to a
shortage of irrigation water, due to the severely depleted Edwards
Aquifer, which serves most of the greater San Antonio area. However,
southeast of town, the prolific Carrizo Sands Aquifer provides abundant
water to the Las Palomas project, which was a major factor in its
development.
AMCOR Biomass Farms, LLC--During 1994, the California State Legislature
passed Assembly Bill 939 ("AB939"), which is legislation environmentally
driven to mandate the diversion of recyclable materials from over-
crowded landfills. Specifically, a key element of AB939 is directly
concerned with "green waste," or organic matter (such as tree trimmings,
grass clippings, wood, etc.) that could be processed and incorporated
back into the soil. AB939 currently mandates that the cities must
comply by diverting 25% of such recyclable materials from the landfills,
and this requirement increases to 50% by the year 2000. The fine for
non-compliance has been set at $10,000 per day.
As farmers, the Company owns over 1,000 acres that could receive such
materials, a major objective being the recycling of organic matter to
enhance soil fertility. In addition, the waste haulers will pay
considerable fees to deliver material to a qualified site. In July,
1996, the Company organized AMCOR Biomass Farms, LLC, and retained a
biologist, who is also licensed as a registered environmental assessor.
The initial objective was to obtain the necessary local and county
permits to establish a recycling facility to fully comply with AB939.
These efforts evolved into a pilot project, whereby clean green organic
waste was received on a 600-acre site that the Company controls in the
Temecula/Rancho California area of Riverside County.
In November 1996, it was determined that the project was indeed
feasible, and the contracting process with major waste haulers began.
The contracts specify that to be "clean green" the materials delivered
to the site must be 99.5% free of any non-organic or other foreign
matter.
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Preliminary projections indicate that the site can process up to 25
loads, approximating 20 tons per load,(500 tons) per day. This would
approximate 2,500 tons per week, or about 10,000 tons per month. At $12
per ton, this project would gross $120,000 per month, with an operating
margin exceeding 50%. Additional sites and applications of this process
are also being considered.
The Company believes that it has both the expertise and the resources to
capitalize on this progressive, environmentally-sensitive state mandate.
It also believes it can be profitable to the Company, while at the
same time enhancing the fertility of the soil.
THIS FORM 10-KSB SPECIFIES FORWARD LOOKING STATEMENTS OF MANAGEMENT.
FORWARD LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE OR ANTICIPATE
THE HAPPENING OF FUTURE EVENTS.
THE FORWARD LOOKING STATEMENTS OF MANAGEMENT SPECIFIED IN THIS FORM 10-
KSB HAVE BEEN COMPILED ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT
AND CONSIDERED TO BE REASONABLE. FUTURE OPERATING RESULTS OF THE
COMPANY, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION OR
WARRANTY REGARDING FUTURE OPERATING RESULTS OF THE COMPANY IS TO BE
INFERRED FROM THOSE FORWARD LOOKING STATEMENTS.
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD LOOKING STATEMENTS
SPECIFIED IN THIS FORM 10-KSB REPRESENT ESTIMATES OF FUTURE EVENTS AND
ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC,
LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE
IDENTIFICATION AND INTERPRETATION OF DATA AND THEIR USE IN DEVELOPING
AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES
REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS
DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM THAT PROJECTED, AND
ACCORDINGLY, NO OPINION IS EXPRESSED REGARDING THE ACHIEVABILITY OF
PARTICULAR FORWARD LOOKING RESULTS. IN ADDITION, THOSE FORWARD LOOKING
STATEMENTS HAVE BEEN COMPILED AS OF THE DATE OF THIS FORM 10-KSB AND
SHOULD BE EVALUATED WITH CONSIDERATION OF ANY CHANGES OCCURRING AFTER
THE DATE OF THIS FORM 10-KSB.
NO ASSURANCE CAN BE GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE
FORWARD LOOKING STATEMENTS SPECIFIED IN THIS FORM 10-KSB ARE ACCURATE.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES
None
Item 9. DIRECTORS, EXECUTIVE OFFICERS
The information appearing under the caption "Election of Directors"
contained in the Company's proxy statement for its Annual Meeting of
Stockholders to be held on February 7, 1997 (the "Proxy Statement"),
is incorporated herein by reference.
12
<PAGE>
Item 10. EXECUTIVE COMPENSATION
The information appearing under the caption "Executive Compensation"
contained in the Proxy Statement is incorporated herein by reference.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information appearing under the captions "Election of Directors" and
"Principal Stockholders" contained in the proxy Statement is
incorporated herein by reference.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing under the caption "Certain Relationships and
Related Transactions" contained in the Proxy Statement is incorporated
herein by reference.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
3.1 Certificate of Incorporation of the Company*
3.2 Amendments of Certificate of Incorporation*
3.3 Bylaws of the Company*
4.1 Trust Indenture between the Company and First City Bank
of Dallas*
10.1 Coachella Packing Shed Lease*
10.5 Desert Valley Date Joint Venture Agreement dated April 1, 1985
between the Company and George Kirkjan, as amended March
26,1991**
10.6 Stock Option Agreement dated July 2, 1990 between the Company
and Fred H. Behrens**
10.7 Stock Option Agreement dated July 2, 1990 between the Company
and Robert A. Wright**
10.8 Stock Option Agreement dated July 2, 1990 between the Company
and Marlene A. Tapie**
10.11 Agreement and Plan of Reorganization dated as of December 16,
1988 between the Company and the shareholders of AMCOR
Capital, Inc., a California corporation and wholly-owned
subsidiary of the Company**
10.12 Lease Agreement dated April 1, 1996 between the Company and
Enterprise Packing Company**
10.25 Sublease Agreement dated as of November 24, 1993 between the
Company and Enterprise Packing Company***
10.26 Option to Repurchase Agreement dated as of May 31, 1993
between Shandon Hills Vineyards and AMAGCO***
10.27 Assignment Agreement dated as of May 31, 1993 among the
Company, Shandon Hills Vineyard and AMAGCO***
22.1 Subsidiaries of the Company*
* Filed as an exhibit to the Company's Form 10-K for the fiscal
years ended November 30, 1988 and incorporated herein by
reference.
13
<PAGE>
** Filed as an exhibit to the Company's Form 10-K for the fiscal
years ended November 30, 1992, 1991, and 1990 as filed with the
Commission on March 15, 1991 and incorporated herein by
reference.
*** Filed as an exhibit to the Company's Form 10-KSB for the fiscal
year ended November 30, 1993 as filed with the Commission on
March 15, 1994 and incorporated herein by reference.
(b) REPORTS ON FORM 8-K
Form 8-K, dated November 30, 1995, was filed with the Commission on
December 15, 1995, reporting on Item 2 (Acquisition or Disposition of
Assets) and 7 (Financial Statements, Pro Forma Financial Information and
Exhibits) in connection with the Company's sale of, in non-monetary
transaction, its San Luis Obispo vineyards and a related repurchase
option to an affiliate partnership for that entity's 50% interest in
a farming operation located in eastern Oregon.
14
<PAGE>
AMCOR CAPITAL CORPORATION
and Subsidiaries
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SCHEDULES
Report of Independent Auditors F - 2
Financial Statements of AMCOR Capital Corporation:
Consolidated Balance Sheets, August 31, 1996 and 1995 F - 3
Consolidated Statements of Operations for the years
ended August 31, 1996 and 1995 F - 5
Consolidated Statements of Shareholders' Equity for
the years ended August 31, 1996 and 1995 F - 6
Consolidated Statements of Cash Flows for the years
ended August 31, 1996 and 1995 F - 9
Notes to Consolidated Financial Statements F - 12
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
AMCOR Capital Corporation
We have audited the accompanying consolidated balance sheets of AMCOR
Capital Corporation and its subsidiaries as of August 31, 1996 and 1995,
the related consolidated statements of operations, shareholders' equity,
and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these 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 audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
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 AMCOR Capital Corporation and subsidiaries as of
August 31, 1996 and 1995, and the consolidated results of their
operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles.
/S/Kelly & Company
Kelly & Company
Newport Beach, California
November 14, 1996
F-2
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
August 31, 1996 and 1995
________________
ASSETS
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Current assets:
Cash and equivalents $1,087,102 $1,809,262
Accounts receivable 288,899 159,669
Advances due from affiliated partnerships
for farming and land management 5,337,704 3,249,369
Notes receivable, other 352,525 3,699,926
Inventories 307,868 425,225
Prepaids and deposits 86,995 23,699
Accrued interest 279,601 143,586
---------- ----------
Total current assets 7,740,694 9,510,736
Property and equipment, net 9,508,442 10,475,182
Contractual advances due from affiliated
partnerships for construction in progress 2,712,397 -
Notes receivable:
Affiliated partnerships and related parties 5,691,686 262,000
Other 1,963,067 1,145,179
Investments 2,489,606 314,329
Restricted cash 1,065,683 -
Other assets 830,685 -
----------- -----------
Total assets $32,002,260 $21,707,426
=========== ===========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 3
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
August 31, 1996 and 1995
________________
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
1996 1995
--------- ---------
<S> <C> <C>
Current liabilities:
Accounts payable $854,478 $2,683,153
Advances due to affiliated partnerships 414,530 957,422
Notes payable, other 964,774 344,900
Capitalized lease obligation 54,728 -
Income taxes payable 337,835 12,281
Accrued interest 518,352 178,996
Deposit on financing transaction - 1,278,392
---------- ----------
Total current liabilities 3,144,697 5,455,144
Deferred income taxes 125,147 -
Notes payable, net of current portion:
Affiliated partnerships 3,672,607 2,218,150
Other 11,909,147 3,326,750
Capitalized lease obligation, net of
current portion 99,948 -
Other liabilities 416,768 -
---------- ----------
Total liabilities 19,368,314 11,000,044
---------- ----------
Commitments and contingencies
Shareholders' equity:
Preferred stock (250,000 shares authorized,
no shares outstanding)
Series A Convertible Preferred Stock ($0.01
par value; 750,000 shares authorized, 628,972
and 618,972 shares issued and outstanding
at August 31, 1996 and 1995, respectively) 6,290 6,190
Common stock ($0.002 par value; 15,000,000 share
authorized, 11,596,566 and 10,331,288
shares issued and outstanding at August 31,
1996 and 1995, respectively) 23,193 20,662
Paid-in capital 11,150,064 10,632,689
Accumulated earnings 1,454,399 47,841
---------- ----------
Total shareholders' equity 12,633,946 10,707,382
----------- -----------
Total liabilities and
shareholders' equity $32,002,260 $21,707,426
=========== ===========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 4
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended August 31, 1996 and 1995
________________
1996 1995
--------- ---------
<S> <C> <C>
Revenues:
Crop sales and other farm income $8,355,172 $9,477,397
Management and other fees 1,767,300 923,103
Equity in income (loss) of investee (40,244) 216,208
Other operating income 786,124 969,182
--------- ---------
10,868,352 11,585,890
--------- ----------
Operating costs and expenses:
Farming costs and cost of crops sold 7,002,297 8,072,185
Other operating expenses 451,091 710,372
Wages and salaries 615,519 663,779
Depreciation expense 484,310 378,778
--------- ---------
8,553,217 9,825,114
--------- ---------
Income from operations 2,315,135 1,760,776
--------- ---------
Other income (expense):
Gain on sale of assets 830,277 135,865
Interest expense (930,190) (711,039)
--------- ---------
(99,913) (575,174)
--------- ---------
Income before income taxes 2,215,222 1,185,602
Provision for income taxes 437,281 12,281
--------- ---------
Net income $1,777,941 $1,173,321
========= =========
Net income per common share, share equivalent
primary $0.17 $0.10
========= =========
Net income per common share, share equivalent
fully diluted $0.17 $0.10
========= =========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 5
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Years Ended August 31, 1996 and 1995
<CAPTION>
Common Preferred
Shares Shares
---------- ---------
<S> <C> <C>
Balance, August 31, 1994 11,748,469 518,994
Net income - -
Common shares retired (1,279,182) -
Shares issued in acquisition
of vineyards - 60,081
Convert stock to debt ( 500,000) -
Shares issued in payment
of debt 362,001 -
Preferred stock dividends, accrued - -
Issue preferred stock for dividends - 39,897
---------- -------
Balance, August 31, 1995 10,331,288 618,972
Net income - -
Shares issued under stock option plan 1,260,935 -
Shares issued in acquisition
of partnership interests 4,343 10,000
Preferred stock dividends, accrued - -
---------- -------
Balance, August 31, 1996 11,596,566 628,972
========== =======
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 6
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued
For the Years Ended August 31, 1996 and 1995
<CAPTION>
Common Preferred
Stock Stock
---------- ---------
<S> <C> <C>
Balance, August 31, 1994 $23,497 $5,190
Net income - -
Common shares retired (2,558) -
Shares issued in acquisition
of vineyards - 601
Convert stock to debt (1,000) -
Shares issued in payment
of debt 723 -
Preferred stock dividends, accrued - -
Issue preferred stock for dividends - 399
---------- -------
Balance, August 31, 1995 20,662 6,190
Net income - -
Shares issued under stock option plan 2,522 -
Shares issued in acquisition
of partnership interests 9 100
Preferred stock dividends, accrued - -
---------- -------
Balance, August 31, 1996 $23,193 $6,290
========== =======
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 7
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY, Continued
For the Years Ended August 31, 1996 and 1995
<CAPTION>
Accumulated
Paid-in Earnings
Capital (Deficit) Total
--------- ------------ --------
<S> <C> <C> <C>
Balance, August 31, 1994 $10,594,278 ($796,057) $9,826,908
Net income - 1,173,321 1,173,321
Common shares retired (917,902) - (920,460)
Shares issued in acquisition
of vineyards 600,212 - 600,813
Convert stock to debt (449,000) - (450,000)
Shares issued in payment
of debt 406,529 - 407,252
Preferred stock dividends, accrued - (329,423) (329,423)
Issue preferred stock for dividends 398,572 - 398,971
--------- ---------- --------
Balance, August 31, 1995 10,632,689 47,841 10,707,382
Net income - 1,777,941 1,777,941
Shares issued under stock option plan 413,587 - 416,109
Shares issued in acquisition
of partnership interests 103,788 - 103,897
Preferred stock dividends, accrued - (371,383) (371,383)
--------- ---------- --------
Balance, August 31, 1996 $11,150,064 $1,454,399 $12,633,946
========= ========= ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F - 8
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended August 31, 1996 and 1995
________________
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities
Net income $1,777,941 $1,173,321
Adjustments to reconcile income (loss)
to net cash provided by operating activities:
Depreciation 484,310 378,778
(Gain) loss on sale of assets (830,277) 135,865
Decrease (increase) in assets:
Loss of investee 40,244 (216,208)
Accounts receivable (129,230) 98,799
Inventories 117,357 (136,120)
Prepaids and deposits (63,296) 145,787
Accrued interest receivable (136,015) (1,879)
Advances due from/to affiliated
partnerships for farming and land
management (2,600,550) 466,127
Other assets (830,685) -
Increase (decrease) in liabilities:
Accounts payable (2,200,058) 1,320,428
Income taxes payable 325,554 (69,296)
Accrued interest payable 339,356 (76,294)
Accrued expenses - (94,369)
Deferred taxes 125,147 -
---------- ---------
Cash provided by (used in)operating activities (3,580,202) 3,124,939
Cash flows provided by (used in) investing
activities:
Payments received on notes receivable 4,012,513 1,495,300
Purchases of property and equipment (1,562,121) (68,677)
Sales of property and equipment 18,000 756,167
Restricted cash (1,065,683) -
Advances due from affiliated partnerships
for contractual construction in progress (2,712,397) -
Sale of investment - 50,000
---------- ---------
Cash provided by (used in) investing activities (1,309,688) 2,232,790
Cash flows provided by (used in) financing
activities:
Proceeds from notes, loans and advances payable 6,042,398 100,423
Repayment of notes, loans, and advances payable (1,945,962) (4,032,931)
Issuance of stock 71,294 -
---------- ---------
Cash provided by (used in) financing activities 4,167,730 (3,932,508)
---------- ---------
Net (decrease) increase in cash (722,160) 1,425,221
Cash at beginning of year 1,809,262 384,041
---------- ---------
Cash at end of year $1,087,102 $1,809,262
========= =========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F-9
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended August 31, 1996 and 1995
________________
Supplemental Disclosure of Cash Flow Information
<CAPTION>
1996 1995
------- --------
<S> <C> <C>
Cash paid during the year for:
Interest $638,573 $723,973
Income taxes 12,281 68,188
Supplemental Schedule of Non-Cash
Investing and Financing Activities
1996 1995
------- --------
Assets acquired in non-cash transactions
Assets acquired $10,030,651 $1,945,000
Assets disposed (2,679,735) -
Receivables incurred 314,329 660,813
Liabilities assumed (940,000) (2,005,000)
Issuance of preferred stock (100,000) (600,813)
Issuance of common stock (3,897) -
Receivable satisfied (1,847,836) -
Liabilities incurred (6,051,904) -
Liabilities satisfied 1,278,392 -
Satisfaction of settlement by assignment
Receivable satisfied - (246,349)
Liabilities satisfied - 246,349
Satisfaction of debt through issuance
of stock
Liabilities satisfied 344,815 407,252
Stock issued (344,815) (407,252)
Accrual of dividends on preferred stock
Liability incurred (371,383) (329,423)
Reduction in retained earnings 371,383 329,423
Satisfaction of debt through offset of
related receivables
Receivables satisfied (150,000) (17,590,136)
Liabilities satisfied 150,000 17,590,136
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F-10
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended August 31, 1996 and 1995
________________
Supplemental Schedule of Non-Cash
Investing and Financing Activities, Continued
<CAPTION>
1996 1995
------- --------
<S> <C> <C>
Payment of preferred stock dividends
through issuance of preferred stock
Liabilities satisfied - 398,971
Stock issued - (398,971)
Conversion of stock to debt
Liabilities incurred - (450,000)
Stock retired - 450,000
Retirement of stock
Receivables satisfied - (920,460)
Stock retired - 920,460
Sale of partnership interests
Receivable incurred - 1,699,959
Property acquired - 165,000
Liabilities incurred - (76,000)
Partnership interest sold - (1,788,959)
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
F-11
</TABLE>
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________________
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of AMCOR
Capital Corporation and its wholly-owned operating subsidiaries,
Sun Goddess Farms, Inc., AMCOR Properties, Inc., and AMCOR Biomass
Farms, LLC ("the Company"). All significant intercompany transactions
have been eliminated. The equity method of accounting is used when the
Company has a 20% to 50% interest in other companies. Under the
equity method, original investments are recorded at cost and adjusted
by the Company's share of undistributed earnings or losses of these
companies.
During the year ended August 31, 1996, the Company (i) reacquired
AMCOR Properties, Inc. from a company owned by an officer of the
Company and (ii) sold ACI Farms, Inc. to a partnership owned by
officers of the Company. These transactions resulted in neither
a gain or loss to the Company.
Operations and Revenue Recognition
The Company engages in agribusiness, clean greenwaste recycling,
land planning, and development of its property and the properties
of its affiliated partnerships. The Company also generates revenue
through management and development fees of various limited partnerships
which are engaged in farming, real estate development, and investing
activities.
Management service fee income, primarily due from affiliated
partnerships, is recognized when it is contractually due, which
approximates the time that services are performed. Crop sales and
other farm income are recognized by the accrual method at the time
of sale.
Cash and Equivalents
The Company invests portions of its excess cash in highly liquid
investments. Cash and equivalents include time deposits and
commercial paper with original maturities of three months or less.
The Company has no requirements for compensating balances. The
Company maintains cash balances in bank accounts which exceed
federally insured limits by $2,052,785 and $1,709,262 at August 31,
1996 and 1995, respectively; however, the Company has not
experienced any losses in such accounts. Part of the restricted
cash as described in Note 8 is included in the balances which exceed
federally insured limits as of August 31, 1996.
Continued F-12
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, Continued
Inventories
All direct and indirect costs of growing crops are accumulated and
valued at the lower of cost or market (net realizable value).
Harvested crops are valued at the lower of cost or market using the
average cost method.
Property and Equipment
Property and equipment are recorded at cost and are depreciated using
the straight-line method over the expected useful lives noted below.
Expenditures for normal maintenance and repairs are charged to income,
and significant improvements are capitalized. The cost and related
accumulated depreciation of assets are removed from the accounts upon
retirement or other disposition; any resulting profit or loss is reflected
in the statement of operations.
Estimated Useful
Life
------------------
Vehicles and farm equipment 3-10 years
Office furniture and equipment 3-10 years
Vineyard development costs 15 years
Leasehold improvements 7 years
Buildings 30 years
Investments
The Company has investments in certain of its affiliated partnerships, as
well as third-party entities. Desert Valley Date was accounted for by the
equity method until it was sold during the year ended August 31, 1995.
PS III Farms, L.L.C., an Oregon limited liability company, which was
acquired during the year ended August 31, 1996, is accounted for
utilizing the equity method.
Income Taxes
The Company and its corporate subsidiaries file consolidated federal
income and combined state franchise tax returns. Deferred income taxes
are computed based on the tax liability or benefit in future years of the
reversal of temporary differences in the recognition of income or deduction
of expenses between financial and tax reporting purposes. The net
difference between tax expense and taxes currently payable is reflected in
the balance sheet as deferred income taxes. Deferred tax assets and/or
liabilities are classified as current and noncurrent based on the
classification of the related asset or liability for financial reporting
purposes, or based on the expected reversal date for deferred taxes that are
not related to an asset or liability.
Continued
F - 13
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, Continued
Disclosures about Fair Values of Financial Instruments
The Company accounts for the value of financial instruments using the fair
value method as described in the Statement of Financial Standards No. 107
(SFAS 107). SFAS No. 107 was adopted by the Company during fiscal year
1995.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates
2. Advances Due from Affiliated Partnerships and
Advances Due to Affiliated Partnerships
Advances due from affiliated partnerships consist of:
1. Farming costs incurred by the Company on behalf of various
partnerships whose farm properties are located in the Coachella
Valley, California, with repayment anticipated from crop sales,
2. Management and development fees charged by the Company to various
partnerships in California and Texas for the management of the
partnerships' assets and the development of their properties with
repayment anticipated from crop sales and lot sales, and
3. Development costs advanced by the Company on behalf of various
partnerships for a residential development in Texas with repayment
anticipated from lot sales.
Advances due to affiliated partnerships consist primarily of receipts of
crop sales exceeding advances for farming costs on behalf of various
partnerships. These amounts do not bear interest, are not collateralized,
and are due on demand.
3. Inventories
Inventories consist of growing crops which represent the incurred costs of
growing farm products on the Company's own behalf, such as chemicals and
certain other farming supplies.
Continued
F - 14
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Property and Equipment
1996 1995
------ ------
Property and equipment consists of the following:
Vineyard development costs $5,145,356 $7,182,803
Vehicles and farm equipment 1,506,111 1,172,643
Office furniture and equipment 51,130 51,130
Leasehold improvements 61,233 61,233
Buildings 301,928 155,000
Golf course construction in progress 1,394,428 -
--------- ---------
8,460,186 8,622,809
Less: Accumulated amortization and
depreciation (1,698,744) (1,412,627)
--------- ---------
6,761,442 7,210,182
Land 2,747,000 3,265,000
--------- ---------
Total property and equipment $9,508,442 $10,475,182
========= =========
Vehicles reported under capital lease at August 31, 1996, was $189,884
with accumulated depreciation of $22,511. The current year's depreciation
expense related to the capital leases was $22,511.
5. Notes Receivable from Affiliated Partnerships
and Related Parties
1996 1995
------- -------
Note receivable from affiliated partnership
with an interest rate of 5% per annum. - $262,000
Note receivable from affiliated partnership
with an interest rate of New York prime plus
two points (10.25% at August 31, 1996). $5,691,686 -
--------- -------
Total notes receivable from affiliated
partnerships and related parties $5,691,686 $262,000
========= =======
Continued
F - 15
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
6. Notes Receivable - Other
1996 1995
------- -------
Note receivable from a third party,
collateralized by farm property, with an
interest rate of 8% per annum. - $2,930,000
Notes receivable from third party,
collateralized by farm property, with an
interest rate of 6.5% per annum;
the notes are due November 21, 2001. $437,500 437,500
Notes receivable from third parties,
collateralized by farm property, with an
interest rate of 8% per annum;
the notes are due November, 1998. 1,182,888 -
Note receivable from sale of partnership
interest with an interest rate of 6% per annum;
principal and interest payments of $225,632 are
due each December 15 through 1998. 695,204 1,477,605
--------- ---------
2,315,592 4,845,105
Less: current portion (352,525) (3,699,926)
--------- ---------
Total Notes Receivable - Other $1,963,067 $1,145,179
========= =========
7. Investments
1996 1995
------- ------
Investments consist of the following:
Investment accounted for utilizing the
equity method of accounting:
PS III Farms, L.L.C. $2,489,606 -
--------- -------
2,489,606 -
--------- -------
Investments accounted for utilizing the
cost method:
Atlantic Holdings Limited Partnership - 300,000
Other - 14,329
--------- -------
- 314,329
--------- -------
Total Investments $2,489,606 $314,329
========= =======
Continued
F - 16
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
7. Investments, Continued
In 1996, the Company acquired a 50% interest in PS III Farms, L.L.C. (see
Note 13) that leases 6,490 acres to one of the LLC members. The remaining
lease term is for forty months, and the primary crop grown on the farm is
potatoes, with a renewal option with terms subject to mutual agreement.
In 1995 the Company sold its 50 percent general partnership interest in
Desert Valley Date (See Note 13). Desert Valley Date processed and
marketed dates. The Partnership sold its retail grade product to
customers ranging from individuals to food retailers. Its industrial grade
product was sold primarily to food manufacturers who use the product as a
nutritional low-cholesterol, low sodium filler in foods.
The Company is a general partner in a number of the affiliated
partnerships; however, its investment in and equity in their operations
is not material.
8. Restricted Cash
These funds are on deposit in trust to provide fund payment of a related
party's liability. It is management's belief that $448,999 will be
removed from the restricted status upon payment of the liability. There
can be no guarantee or assurance, however, that any amount will be
available to the Company after the payment of that obligation based upon
the final determination of the exact liability amount.
9. Notes Payable
1996 1995
------- -------
Unsecured
Notes payable to affiliated partnerships
and other related parties consist of the
following:
Notes payable to affiliated partnerships,
with interest rates of 6% to 12% per
annum; the notes are due in December, 1997. $2,407,423 $1,768,150
Notes payable to an officer, with an
interest rate of 8% per annum;
the notes are due in December, 1997. 815,184 -
Note payable to an employee, with interest
rates of 5.9% and 2.7% in 1996 and 1995,
respectively. The note is due in
November, 1998. 450,000 450,000
--------- ---------
3,672,607 2,218,150
--------- ---------
Continued
F-17
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Notes Payable, Continued
1996 1995
Notes payable to third parties consist of ------- ------
the following:
Note payable, with an interest rate of 14%
per annum; the note was paid in
September, 1996. $40,000 $40,000
Note payable, with an interest rate of 8%
per annum; the note was paid in
August, 1996. - 150,000
--------- ---------
40,000 190,000
--------- ---------
Total unsecured notes payable 3,712,607 2,408,150
--------- ---------
Collateralized
Notes payable to third parties consist
of the following:
Notes payable collateralized by real property,
all with an interest rate of 10% per annum;
the notes are due on June 30, 1997.
435,000 504,900
Notes payable collateralized by real property,
with an interest rate of 5% per annum; the
notes are due on December 31, 1997. 2,845,500 2,976,750
Notes payable, collateralized by equipment,
with an interest rate of 10.5% per annum;
there are four equal annual payments with
the final installment due on August 15, 1999. 129,503 -
Note payable to an insurance company,
collateralized by real and personal property,
with an interest rate of 7.79% per annum; an
interest only payment is due October 1, 1996,
then semi-annual installments of $188,005 are
due through April, 2011. The interest rate
and the amount of the payment will be reviewed
in April, 2006, and may be adjusted per the
terms of the loan. 3,780,000 -
Notes payable collateralized by certain notes
receivable, with an interest rate of 13.5%,
due in December, 1996. 369,000 -
Continued
F-18
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Notes Payable, Continued
1996 1995
------- -------
Collateralized, continued
Notes payable collateralized by real property
of an affiliated partnership and guaranteed by
the two largest shareholders of the Company,
several affiliated partnerships of the Company,
and a subsidiary of the Company, which consist
of the following:
Note A: Interest rate of prime plus 1% (9.25%
at August 31, 1996), with semi-annual interest
payments until March, 1998, then all unpaid
interest and principal due on September 30,
1998. The interest payment due on August 31,
1996, was made by the Company. $3,900,000 -
Note B: A non interest bearing note with a
principal reduction of $80,000, due August 31,
1996, and the remaining unpaid principal due
September 30, 1998. The principal payment
was made by the Company. The note is
recorded at its fair value. 734,091 -
Note C: A non interest bearing note due on
September 30, 1998. If no event that causes a
default occurs and if Note A is paid in full
by June 30, 1997, then the balance due on this
note will be canceled. It is management's
intent to pay Note A in full no later
than June 30, 1997. The note is recorded at
its fair value 640,827 -
--------- ---------
Total collateralized notes payable 12,833,921 $3,481,650
--------- ---------
Total notes payable 16,546,528 5,889,800
Less: current maturities (964,774) (344,900)
--------- ---------
Long term portion of notes payable $15,581,754 $5,544,900
========== =========
Maturities of notes payable for the fiscal years ending August 31:
1997 $964,774
1998 4,597,481
1999 7,295,152
2000 100,638
2001 and thereafter 3,588,483
Continued
F-19
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Notes Payable, Continued
Interest Expense
Interest expense during the years ended August 31, 1996 and 1995, was
$930,190 and $711,039, respectively.
10. Obligation Under Capital Lease
During the year ended August 31, 1996, the Company entered into a
long term lease agreement. Obligation under capital lease at
August 31, 1996, consist of the following:
Capital lease with Enterprise Leasing at
8.75% with monthly payments of $5,613,
with the final payment due December, 1998 $154,676
Future minimum lease payments under capital lease at August 31,
1996, are as follows:
1997 $67,356
1998 67,356
1999 42,532
------
Total minimum lease payments 177,244
Less: amount representing interest (22,568)
------
Present value of minimum lease payments 154,676
Less: current maturities (54,728)
------
Obligation under capital lease, long term $99,948
======
11. Deferred Income Taxes
The components of the provision for income taxes are as follows:
1996 1995
------- -------
Current tax expense:
Federal $323,154 $9,881
State 2,400 2,400
------- ------
325,554 12,281
Deferred tax expense: ------- ------
Federal 111,727 -
State - -
------- ------
111,727 -
------- ------
Total provision $437,281 $12,281
======= ======
Continued
F-20
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
11. Deferred Income Taxes, Continued
Significant components of the Company's deferred income tax assets and
liabilities at August 31, 1996 and 1995 are as follows:
1996 1995
Deferred tax assets: ------- -------
Capital loss carryforward $53,048 $51,413
Net operating loss carryforward - 38,775
State tax credit carryforward 280,265 443,152
Other 816 816
------- ------
Total deferred income tax assets 334,129 534,156
Valuation allowance (302,528) (534,156)
------- ------
Net deferred income tax asset 31,601 -
------- ------
Deferred income tax liability:
Depreciation 45,526 -
Partnership loss 110,405 -
------- ------
Total deferred income tax liability 155,931 -
------- ------
Net deferred income taxes $124,330 -
======= ======
Reconciliation of the effective tax rate to the U.S. statutory rate is as
follows:
1996 1995
------- -------
Tax expense at U.S. statutory rate 34.0% 34.0%
State tax provision 0.1 1.0
Tax indemnification agreement (12.8) -
(Benefit) of net operating loss - (36.8)
Other (1.6) 2.8
------- -------
Effective income tax rate 19.7% 1.0%
======= =======
The Company has capital loss carryforwards for federal and state income
tax purposes of $122,512 that expire in 1998. The Company has a state
income tax credit carryforward of $280,265 that expires in 2010.
The Company's headquarters facility is located within the Coachella Valley
Enterprise Zone. Under California Revenue Tax Code, the Company is offered
a number of California tax benefits. For the years ended August 31, 1996
and 1995, the Company utilized the hiring tax credit and the sales and use
tax credit to reduce its state tax expense.
Continued
F-21
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
12. Commitments and Contingencies
Commitments
The Company has operating leases for certain of its facilities and
office equipment. The Company has the option of extending their facility
lease for three additional five-year terms. Future minimum lease payments
at August 31, 1996, are as follows:
1997 $ 257,909
1998 255,341
1999 246,809
2000 218,462
2001 and thereafter 364,000
---------
Total future minimum lease payments $ 1,342,521
=========
Rental expense, resulting from operating lease agreements, was $377,801
and $232,696 during the years ended August 31, 1996 and 1995, respectively.
13. Acquisitions
On April 6, 1996, the Company purchased loans owed by an affiliated
partnership to Atlantic Holdings Limited Partnership in the amount of
$5,691,686 (including accrued interest), secured by certain real
property in Riverside County, California. The agreements securing these
loans were assigned to the Company. The purchase price is payable
pursuant to three secured promissory notes from the Company, which
are secured by that certain real property in Riverside County,
California, a mortgage on 1,400 acres of Texas real property owned by
affiliated partnerships, and is guaranteed by the two largest
shareholders of the Company, several affiliated partnerships of the
Company and a subsidiary of the Company (see Note 9). The Company
will be entitled to two discounts if management meets the following
requirements:
1. Pay Note A in full no later than June 30, 1997, and
2. Make all note payments on a timely basis.
If requirements 1 and 2 are met, the Company will receive a discount
of $891,685 from the original purchase price.
If requirement 2 only is met, the Company will receive a discount of
$91,685 from the original purchase price.
As of the date of this report, the Company was not in default on these
obligations.
Continued
F-22
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
13. Acquisitions, Continued
On September 30, 1995, the Company acquired notes receivable of
$1,306,290 and assumed notes payable secured by these notes of
$940,000, in exchange for a reduction in advances due the Company
by three affiliated partnerships of $189,362 and an increase in
advances due by the Company to the three affiliated partnerships of
$176,708. This transaction resulted in no gain or loss to the Company.
On November 30, 1995, the Company sold, in a non-monetary transaction,
its San Luis Obispo, California, vineyards and a related repurchase
option, referred to in Note 17, to an affiliated partnership for the
entity's 50% interest in PS III Farms, L.L.C., a farming operation
in Oregon. The asset received was recorded at fair market value as it
was not possible to determine the value of the vineyards and option
exchanged. The Oregon farming operation was valued at $2,426,000 in
the transaction. The transaction resulted in a gain of $830,786 and
reduced advances due from an affiliated partnership by $508,200.
14. Profit-Sharing Plan
Effective December 1, 1985, the Company established a noncontributory
profit-sharing retirement plan covering substantially all employees.
Annual employer contributions to the plan are made at the discretion of
management. No contributions were made to the plan during 1995.
The Company terminated the plan as of June 30, 1995.
15. Common Stock and Stock Options
During 1990, the Company granted options to purchase 2,169,201 shares of
its common stock to officers and directors of the Company. Of these
options, 1,260,935 are exercisable at $.33 per share and expire in
November, 1996. These options were granted in connection with the 1989
partnership restructuring of two of the affiliated partnerships in which
the officers of the Company were general partners. These stock options were
exercised at August 31, 1996.
The remaining 908,266 options are exercisable at $0.80 per share and expire
in July, 2000. These options were granted in connection with the repurchase
by the Company of shares from the officers and directors.
During 1995, the Company adopted a new non-qualified stock option plan for
Company employees and vendors and granted options to purchase 250,000
shares of its common stock to several employees at $0.65 per share. Under
the plan, the options terminate when an employee leaves the Company.
Options to purchase 175,000 shares and 250,000 shares were still outstanding
at August 31, 1996 and 1995, respectively.
Continued
F-23
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
16. Affiliated Partnerships
The Company through 1989 syndicated more than 150 Limited Partnerships,
many of which have now been liquidated. The Company managed twenty-four
of these partnerships in 1996 and 1995. These partnerships are involved
in farming, real estate, and related agribusiness activities. Certain
partnerships have purchased land from the Company at the Company's basis.
In certain cases, partnerships have not recorded their title to the land.
The Company and/or certain officers of the Company are general partners in
the partnerships. The accounting policies used by the partnerships are the
same as those used by the Company. The aggregate financial data of the
partnerships is:
Balance Sheets - Unaudited
August 31, August 31,
1996 1995
---------- ----------
Cash $ 67,982 $ 485
Accounts and advances receivable 1,535,464 980,840
Notes receivable 5,303,649 3,903,581
Property and equipment, net 3,310,948 2,963,060
Investments 23,500,276 28,993,192
Other assets 551,728 469,117
---------- ----------
Total assets $34,270,047 $37,310,275
========== ===========
Accrued liabilities $8,674,452 $5,710,584
Notes payable 5,008,170 7,107,568
Other liabilities - -
---------- ----------
Total liabilities 13,682,622 12,818,152
Partnership capital 20,587,425 24,492,123
---------- ----------
Total liabilities and partnership capital $34,270,047 $37,310,275
========== ===========
Income Statements- Unaudited
for the Years Ended August 31, 1996 and 1995
1996 1995
---------- ----------
Farm revenue $ 747,544 $1,643,587
Land sales 675,000 15,000
Interest income 468,029 455,383
Other income - -
---------- ----------
Total revenue 1,890,573 2,113,970
---------- ----------
Continued
F-24
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
16. Affiliated Partnerships, Continued
Income Statements- Unaudited, Continued
for the Years Ended August 31, 1996 and 1995
1996 1995
---------- ----------
Crop costs $1,224,548 $1,924,544
Cost of land sold 652,449 2,102
Interest expense 172,569 580,436
Management fees 517,065 652,488
Depreciation expense 130,000 130,000
Other operating expense 332,780 923,799
(Gain) Loss on sale of assets - (87,742)
Bad debts - 716,861
---------- ----------
Total expense 3,029,411 4,842,488
---------- ----------
Net loss ($1,138,838) ($2,728,518)
========= =========
17. Financing Transaction
In 1993 the Company entered into a transaction with the lessee of a
667-acre San Luis Obispo County, California, wine grape vineyard owned
by the Company and an affiliated partnership. The transaction provided for
the lessee to purchase the 667 acres for $3.5 million, which was
approximately 65% of the fair market value of the vineyard. The transaction
has been treated as a financing transaction under the deposit method. By
December 1995, the Company was required to exercise a repurchase option to
regain title to the vineyard. The option price was $3.5 million plus the
costs of any capital improvements made to the property by the lessee.
During the year ended August 31, 1996, the Company sold this vineyard and
repurchase option to an affiliated partnership (See Note 13).
18. Divestiture of Partnership Interest
On May 31, 1995 the Company sold its 50 percent general partnership
interest in Desert Valley Date, which is the largest date processor in
the Coachella Valley. It processes and markets dates to retail and
industrial users across the country. The sale resulted in a gain of
$199,400. The sales price consisted of the following:
Cash $ 50,000
Note receivable 1,477,605
Building 165,000
Land 500,000
---------
$2,192,605
=========
Continued
F-25
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
18. Divestiture of Partnership Interest, Continued
The partnership sold the land at its cost of $500,000 and valued the
building at an agreed upon value of $165,000.
19. Disclosures about Fair Values of Financial Instruments
SFAS No. 107, Disclosures about Fair Value of Financial Instruments requires
disclosure of the fair value of all financial instruments both on and off
the Company's balance sheet. The estimated fair value amounts have been
determined by the Company, using available market information and
appropriate valuation methodologies. However, considerable judgment is
necessarily required in interpreting market data to develop the estimates
of fair value.
Accordingly, the estimates presented herein are not necessarily indicative
of the amounts that the Company could realize in a current market exchange.
The use of different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value amounts.
The following methods and assumptions were used by the Company in estimating
fair value disclosures for financial statements:
Cash and equivalents, accounts receivable, advances, certain other current
assets, accounts payable, current maturities of long term debt, and
certain other current liability amounts are reported in the balance sheet at
approximate fair value due to the short term maturities of these instruments.
Long term receivables:
The fair value is estimated by determining the net present value of antici-
pated future cash flows. The carrying amount on the balance sheet is less
than the fair value due to the change in interest rates since the debt
originated.
Long term debt:
The fair value is estimated by determining the net present value of future
payments. The carrying amount on the balance sheet exceeds the fair value
of the debt due to the change in interest rates from the time the debt was
incurred to the current period.
Continued
F-26
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
19. Disclosures about Fair Values of Financial Instruments, Continued
(Amounts in thousands)
---- 1996 --- ---- 1995 ---
Carrying Fair Carrying Fair
Value Value Value Value
Current assets: -------- ------ -------- -----
Cash and equivalents $1,087 $1,087 $1,809 $1,809
Accounts receivable 289 289 160 160
Advances and accounts receivable due
from affiliated partnerships 5,338 5,338 3,249 3,249
Notes receivable, other 353 353 3,700 3,700
Other current assets 367 367 167 167
Other assets:
Notes receivable
Affiliated partnerships and related
parties 5,692 5,692 262 262
Other 1,963 1,527 1,145 1,042
Restricted cash 1,066 1,066 - -
Other assets 831 831 314 314
Current liabilities:
Accounts payable 854 854 2,683 2,683
Advances and accounts payable due to
affiliated partnerships 415 415 957 957
Notes payable, other 965 965 345 345
Capitalized lease obligation 55 55 - -
Income taxes payable 338 338 12 12
Accrued interest 518 518 179 179
Deposit on financing transaction - - 1,278 1,278
Other liabilities:
Notes payable, net of current portion
Affiliated partnerships 3,673 3,074 2,218 2,061
Other 11,909 9,784 3,327 3,006
Capitalized lease obligation 100 100 - -
Other liabilities 417 417 - -
20. Earnings per Common Share
The computation of both primary and fully diluted earnings per
common and common equivalent share are computed based on the weighted
average number of shares of common stock and common stock equivalents
outstanding during each year. The computation takes into effect common
shares issuable under stock option plans. No effect has been given to
convertible preferred stock as the market price did not exceed
the liquidation value of $10 per share. The primary weighted average
common and common equivalent shares, as applicable, outstanding during
the years ended August 31, 1996 and 1995, was 10,357,878 and 11,593,949,
respectively. The fully diluted average common and common equivalent
shares, as applicable, outstanding during the years ended August 31, 1996
and 1995 were 10,480,729 and 11,901,517, respectively.
Continued
F-27
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
21. Stock transactions
Common stock retired
In 1995 the restriction on certain shares of common stock issued to
affiliated partnerships terminated and the shares were issued to the
partners in the affiliated partnerships. The general partners
assigned their 703,682 shares of the distribution to the Company, which
retired the shares at no gain or loss to the Company.
In 1995 the Company received 288,000 shares of common stock from an
individual in payment of a receivable and retired the stock.
During 1995, an affiliated partnership acquired 287,500 shares of
the Company's common stock. Subsequently, they sold the stock to the
Company at their acquisition price in exchange for reduction in an
amount due from them to the Company, and the stock was retired.
Exchange Debt for Stock
During 1995, the Company converted 500,000 shares of common stock held by
an individual to debt and retired the stock.
Exchange Stock for Vineyard
In 1995, the Company issued 60,081 shares of preferred stock to an
affiliated partnership valued at $600,813 and assumed $1,344,187 in
debt in acquiring 220 acres of table grape vineyards located in
Coachella Valley, California.
Exchange Stock for Debt
In 1995, the Company issued 362,001 shares of stock as payment for debt
of the Company.
Shares Issued Under Stock Option
On August 31, 1996, two officers of the Company exercised options to
purchase 1,260,935 shares at $0.33 per share.
Shares Issued for Partnership Interests
During 1996, the Company issued 4,343 shares of common stock and 10,000
shares of preferred stock to two entities to obtain partnership interests
which were then sold to a related party at no gain or loss to the
Company.
22. Business Segments
At August 31, 1996, the Company operates principally in two areas:
agribusiness and the managing and developing of real property for
affiliated partnerships.
Continued
F-28
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
22. Business Segments, Continued
The Company's agribusiness operations involve the farming of table
grape vineyards and date gardens for the Company and affiliated
partnership owned properties in the Coachella Valley, California.
The Company's principal development activity currently involves a
1,300 lot, golf course oriented residential community known as
Las Palomas Country Club Estates located southeast of San Antonio, Texas.
The Company also earns interest income and miscellaneous income. The
Company generates interest income from receivables from certain of its
related partnerships, affiliates and third party notes. Other income
decreased from fiscal 1995 by $183,000 (19%) to $786,000 primarily due
to reduced interest income resulting from the payment to the Company of
a $3 million secured note receivable in December, 1995.
Income from operations consists of the excess of operating revenues over
operating expenses including corporate expenses, which are allocated to
the operating segments. In computing income from operations by segment,
the effects of interest income, interest expense, and income taxes are
not included.
Identifiable assets by segment are those assets used in the Company's
operations in each business segment.
1996
-------------------------------------
Property
Management Combined
Agribusiness & Development Other Operations
----------- ------------- ------ ----------
Net sales $8,355,172 $1,767,300 $745,880 $10,868,352
Income from operations 882,161 1,042,630 390,344 2,315,135
Assets employed at
year end 14,842,165 4,230,826 10,776,484 29,849,475
Corporate assets 2,152,785
----------
32,002,260
==========
Depreciation and
amortization 470,714 13,596 - 484,310
Capital expenditures 527,953 1,518,428 - 2,046,381
Continued
F-29
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
22. Business Segments, Continued
1995
-------------------------------------
Property
Management Combined
Agribusiness & Development Other Operations
----------- ------------- ------ ----------
Net sales $9,477,397 $ 923,103 $1,185,390 $11,585,890
Income from operations 1,026,424 7,013 727,339 1,760,776
Assets employed at
year end 14,476,730 - 5,421,434 19,898,164
Corporate assets 1,809,262
----------
21,707,426
==========
Depreciation and
amortization 378,778 - - 378,778
Capital expenditures 2,178,677 - - 2,178,677
F-30
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: November 27, 1996 AMCOR CAPITAL CORPORATION
By: /S/FRED H. BEHRENS
Fred H. Behrens, Chairman of
the Board and Chief Executive Officer
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Name Title Date
/S/FRED H. BEHRENS Chairman, Chief Executive Office November 27, 1996
Fred H. Behrens (Principal Executive Officer), Chief
Financial Officer (Principal Financial
and Accounting Officer) and Director
/S/ROBERT A. WRIGHT President, Chief Operating Officer
Robert A. Wright and Director November 27, 1996
/S/ROBIN E. SWANSON Secretary November 27, 1996
Robin Swanson
F - 31
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FORM 10-KSB
FOR THE YEAR ENDED AUGUST 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> AUG-31-1996
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<RECEIVABLES> 6260
<ALLOWANCES> 0
<INVENTORY> 308
<CURRENT-ASSETS> 7741
<PP&E> 11207
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<TOTAL-ASSETS> 32002
<CURRENT-LIABILITIES> 3145
<BONDS> 0
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<OTHER-SE> 12604
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<TOTAL-REVENUES> 11698
<CGS> 7002
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<OTHER-EXPENSES> 1551
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<INTEREST-EXPENSE> 930
<INCOME-PRETAX> 2215
<INCOME-TAX> 437
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