UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934, for the quarter ended November 30, 1996.
Commission File Number 0-17594
AMCOR CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 33-0329559
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
52300 ENTERPRISE WAY, COACHELLA, CALIFORNIA 92236
(Address of principal executive offices) (Zip Code)
(619) 398-9520
(Registrant's telephone number, including area code)
Check whether the registrant (1) has filed all reports required by Section
13 or 15(d) of the Securities 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 issuer's only class of Common
Stock, $.002 par value, was 11,996,566 on January 20, 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Introduction
The consolidated financial statements have been prepared by AMCOR Capital
Corporation ("Company"), without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. The Company believes that the disclo-
sures are adequate to make the information presented not misleading when read
in conjunction with the Company's consolidated financial statements for the year
ended August 31, 1996. The financial information presented reflects all adjust-
ments, consisting only of normal recurring adjustments, which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods presented.
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEET
November 30, 1996 and August 31, 1996
(Amounts in thousands)
<CAPTION>
November 30,
1996 August 31,
(Unaudited) 1996
----------- ----------
<S> <C> <C>
A S S E T S
Current assets:
Cash $ 516 $ 1,087
Accounts receivable, prepaids
and accrued interest 601 655
Notes receivable 353 353
Advances and accounts receivable due
from affiliated partnerships for farming
and land management 6,513 5,338
Inventories 1,036 308
----------- ----------
Total current assets 9,019 7,741
Property and equipment, net 9,366 9,508
Contractual advances due from affiliated
partnerships for construction in progress 3,862 2,712
Notes receivable:
Affiliates and related parties 5,692 5,692
Other 1,897 1,963
Investments 2,490 2,490
Restricted cash 454 1,066
Other assets 952 831
----------- ----------
Total assets $ 33,732 $ 32,002
=========== ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEET, CONTINUED
November 30, 1996 and August 31, 1996
(Amounts in thousands)
<CAPTION>
November 30,
1996 August 31,
(Unaudited) 1996
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,083 $ 854
Advances from affiliated partnerships 479 415
Notes and loans payable 1,663 965
Accrued interest 436 518
Income taxes payable 438 338
Capitalized lease obligation 55 55
----------- ----------
Total current liabilities 4,154 3,145
Deferred tax liability 118 125
Notes and loans payable, net of current portion:
Affiliates 3,673 3,673
Other 12,297 11,909
Capitalized lease obligation, net of
current portion 87 100
Other liabilities 417 417
----------- ----------
Total liabilities 20,746 19,369
Shareholders' equity:
Preferred stock (250,000 shares
authorized, no shares outstanding) - -
Series A Convertible Preferred Stock
($.01 par value; 750,000 shares authorized,
628,972 shares issued and outstanding at
both November 30 and August 31, 1996) 6 6
Common stock ($.002 par value; 15,000,000
shares authorized, 11,996,566 and 11,596,566
issued and outstanding at November 30, and
August 31, 1996, respectively) 24 23
Paid-in capital 11,150 11,150
Accumulated earnings 1,806 1,454
----------- ----------
Total shareholders' equity 12,986 12,633
----------- ----------
Total liabilities and
shareholders' equity $ 33,732 $ 32,002
=========== ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended November 30, 1996 and 1995
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Revenues:
Crop sales and other farm income - $ 37
Management and other fees $ 1,001 148
Other income 219 131
----------- ----------
1,220 316
----------- ----------
Operating costs and expenses:
Farming costs and cost of crops sold - 130
Other operating expenses 294 207
Wages and salaries 113 164
Depreciation 3 3
----------- ----------
410 504
----------- ----------
Income (loss) from operations 810 (188)
Other income and expense:
Gain on sale of assets - 833
Interest expense (272) (135)
----------- ----------
(272) 698
----------- ----------
Income before income taxes 538 510
Provision for income taxes 93 84
----------- ----------
Net income $ 445 $ 426
=========== ==========
Net income per common share, share
equivalent primary $ .04 $ .04
===== =====
Net income per common share, share
equivalent fully diluted $ .04 $ .04
===== =====
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
For the three months ended November 30, 1996 and the year
ended August 31, 1996
(Unaudited)
<CAPTION>
Common Preferred
Shares Shares
----------- ----------
<S> <C> <C>
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
Net income - -
Shares issued under consulting agreement 400,000 -
Preferred stock dividends, accrued - -
----------- ----------
Balance, November 30, 1996 11,996,566 628,972
=========== ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY, Contined
For the three months ended November 30, 1996 and the year
ended August 31, 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
-------------- Par Value -----------------
Common Preferred Paid in
Stock Stock Capital
--------- --------- ----------
<S> <C> <C> <C>
Balance, August 31, 1995 $ 21 $ 6 $ 10,633
Net Income - - -
Shares issued under stock option
plan 2 - 414
Shares issued in acquisition
of partnership interests - - 103
Preferred stock dividends,
accrued - - -
--------- --------- --------
Balance, August 31, 1996 23 6 11,150
Net income - - -
Shares issued under consulting
agreement 1 - -
Preferred stock dividends,
accrued - - -
--------- --------- --------
Balance, November 30, 1996 $ 24 $ 6 $ 11,150
========= ========= ========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY, Continued
For the three months ended November 30, 1996 and the year
ended August 31, 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
Accumulated Total
Earnings Equity
----------- ----------
<S> <C> <C>
Balance, August 31, 1995 $ 48 $ 10,708
Net Income 1,778 1,778
Shares issued under stock option plan - 416
Shares issued in acquisition
of partnership interests - 103
Preferred stock dividends,
accrued (372) (372)
----------- ----------
Balance, August 31, 1996 1,454 12,633
Net income 445 445
Shares issued under consulting agreement - 1
Preferred stock dividends, accrued (93) (93)
----------- ----------
Balance, November 30, 1996 $ 1,806 $ 12,986
=========== ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended November 30, 1996 and 1995
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Amounts in thousands)
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Cash flows provided (used) in operating
activities $ (1,184) $ (1,549)
----------- ----------
Cash flows provided (used) in investing
activities:
Payments received on notes receivable 66 750
Purchases of property and equipment - (107)
Sales of property and equipment - 5
Advances due from affiliated partnerships
for contractual construction in progress (1,150) -
Restricted cash 612 -
----------- ----------
Net cash provided (used) for investing
activities (472) 648
----------- ----------
Cash flows provided (used) in financing
activities:
Proceeds from notes, loans and
advances payable 1,165 3,002
Repayments of notes and advances payable (80) (3,213)
----------- ----------
Net cash provided (used) in financing
activities 1,085 (211)
----------- ----------
Net increase/(decrease) in cash (571) (1,112)
Cash at beginning of period 1,087 1,809
----------- ----------
Cash at end of period $ 516 $ 697
=========== ==========
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
AMCOR CAPITAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the three months ended November 30, 1996 and 1995
(Unaudited)
(Amounts in thousands)
Supplemental Disclosure of Cash Flow Information
<CAPTION>
1996 1995
----------- ----------
<S> <C> <C>
Cash paid during the period for:
Interest $ 179 $ 87
Supplemental Schedule of Non-Cash Investing and Financing Activities
1996 1995
----------- ----------
Satisfaction of debt through issuance of stock
Liabilities satisfied - $ 4
Stock issued - (4)
Accrual of dividends on preferred stock
Liabilities incurred $ 93 93
Reduction in retained earnings (93) (93)
Satisfaction of debt through offset of related
receivables
Receivables satisfied - 6,666
Liabilities satisfied - (6,666)
Acquisition of notes receivable
Notes and accrued interest received - 1,306
Reduction of receivables - (189)
Liabilities incurred - (1,117)
Sale of vineyard and repurchase option
Vineyard property - (2,365)
Acquisition of investment interest - 2,426
Reduction of deposit liability - 1,278
Reduction of receivable - (508)
Gain on sale - (831)
Acquisition of vineyards
Vineyard property - 1,940
Reduction of receivables - (1,895)
Assumption of debt - (162)
Increase in crop inventories - 117
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
November 30, 1996
1. Income (loss) Per Common Share
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 period. 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 appli-
cable, outstanding during the three months ended November 30, 1996 and 1995
was 12,119,417 and 10,961,755, respectively. The fully diluted average
common and common equivalent shares, as applicable, outstanding during the
three months ended November 30, 1996 and 1995 was 12,542,000 and 11,037,512,
respectively.
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.
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Property and Equipment
November 30, August 31,
1996 1996
----------- ----------
(Amounts in thousands)
Property and equipment consists
of the following:
Vineyard development costs $ 5,145 $ 5,145
Vehicles and farm equipment 1,506 1,506
Office furniture and equipment 51 52
Leasehold improvements 61 61
Buildings 302 302
Golf course construction in progress 1,394 1,394
------ ------
8,459 8,459
Less: accumulated depreciation (1,840) (1,698)
------ ------
6,619 6,761
Land 2,747 2,747
------ ------
$ 9,366 $ 9,508
===== =====
Vehicles reported under capital lease at November 30, 1996, was $189,884
with accumulated depreciation of $31,555.38. Depreciation expense related
to the capital leases was $9,044 for the three months ended November 30,
1996.
5. Investments
November 30, August 31,
1996 1996
---------- ----------
(Amounts in thousands)
Investments consists of the
following:
Investment in P.S. III Farms,
L.L.C. utilizing the equity
method of accounting $ 2,490 $ 2,490
====== ======
The Company is a general partner in a number of the affiliated partner-
ships, for which its investment and equity in operations is not
material.
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
6. Deferred Income Taxes
The components of the provision for income taxes are as
follows:
November 30, August 31,
1996 1996
---------- ----------
(Amounts in thousands)
Current expense:
Federal $ 98 -
State 2 $ 2
Deferred:
Federal ( 7) 82
State - -
-------- --------
Total provision $ 93 $ 84
======== ========
7. Commitments And Contingencies
The Company has operating leases for certain of its facilities and
office equipment. Future minimum lease payments at November 30, 1996
are as follows:
(Amounts in thousands)
1997 $ 258
1998 255
1999 247
2000 218
2001 and thereafter 364
--------
Total future minimum
lease payments $ 1,342
========
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
8. Common Stock, Stock Options, and Warrants
In 1990, the Company granted options to purchase 908,266 shares of its
common stock to officers and directors of the Company. The options are
exercisable at $.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 were still outstanding at November 30, 1996.
In 1996, the Company adopted the 1996 Consultant's Stock Plan and issued
warrants for the purchase of 200,000 shares of the Company's common stock.
The warrants are exercisable for a period of 3 years and the purchase price
per share under the terms of the warrants is $2.00. At November 30, 1996,
the 200,000 warrants are outstanding.
9. Restricted Cash
These funds are held on deposit-in-trust to fund the payment of a related
party's liability. Continued negotiations have resulted in the
determination of the maximum liability. Therefore, the balance of funds held
as restricted has been reduced at November 30, 1996, to reflect this
calculated liability.
10. Subsequent Events
On December 18, 1996, the Company received a $520,000 funding from an
insurance company. The note payable is collateralized by real and personal
property. The obligation has an initial interest rate of 8.46%, subject to
adjustment on October 1, 2006, and matures October 1, 2011.
On January 13, 1997, the Company received a $2,500,000 line of credit from
a California bank. The credit agreement is secured by the Company's
Coachella Valley table grape crop. The credit agreement has an initial
interest rate of 9%, and will vary based on an index of bank prime interest
rates. The credit agreement matures in August, 1997. The proceeds of the
line of credit are intended to provide financing for the growing and harvest
costs of the Company's 1997 table grape crop.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
OVERVIEW
As outlined below, the Company's overall financial condition as compared
to August 31, 1996, has not changed significantly.
The Company's current ratio decreased to 2.17 at November 30, 1996 from
2.46 at August 31, 1996, primarily due to the advances to affiliates to fund
real estate development costs.
RESULTS OF OPERATIONS
Revenues
The Company's revenues are derived principally from the following two
sources: (i) farming operations (including packing and cold storage
services), (ii) management/development fees for real estate development-land
partnerships. For the three-months ended November 30, 1996, the Company's
gross revenues were significantly higher than the comparable three-months
ended November 30, 1995 due primarily to increased management and
development fees related to the Los Palomas subdivision located southeast
of San Antonio, Texas.
Crop Sales and Other Farm Income
The Company generates fees and profits from its table grape and date
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 million.
Over the next several years, the Company expects its crop sales to
continue to increase as additional properties are acquired and developed
by the Company.
Crop sales and other farm income is nominal for the three-month periods
ended November 30, 1996, as 100% of table grape sales occur in the third
and fourth quarters.
Management and Other Fees
The Company has earned in the past, and will continue to earn, management
and accounting fees from its managed affiliated partnerships, although
this source will continue to decrease as additional partnership
terminations and restructuring are completed. In the past, a portion of
the management fees were 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.
<PAGE>
Management and other fee income increased substantially from the comparable
three-month period ended November 30, 1995 due to a development contract
related to the 1,000-lot subdivision, owned by an affiliate, located 30
miles southeast of San Antonio, Texas.
Other Income
Other income consists primarily of interest and other income The Company
generates interest income from note receivables from certain related
partnerships, affiliates, and third parties. Other income increased 67% to
$219,000 for the three months ended November 30, 1996 due to the 1996
acquisition of a $5.6 million secured note receivable due from an affiliate.
Operating Costs and Expenses
The Company's total operating costs and expenses were $410,000 and $504,000
for the three months ended November 30, 1996 and 1995, respectively. These
costs and expenses include, among others, corporate overhead expenses,
farming costs and cost of crops sold and depreciation expenses.
Farming Costs and Cost of Crops Sold
Farming costs and costs of crops sold were zero in the three-month period
ended November 30, 1996 as compared to the comparable three-month period
ended November 30, 1995 as all costs were deferred, as such pertained to
the fiscal 1997 table grape crop.
Other Operating Expenses
Other operating expenses increased $87,000 (42%) to $294,000 for the three
months ended November 30, 1996 as compared to the three months ended
November 30, 1995 due to increased legal, accounting and other
administrative expenses.
Income from Operations
The Company posted operating income of $810,000 for the three months ended
November 30, 1996 as compared to an operating loss of $188,000 for the
comparable period ended November 30, 1995 primarily due to increased
management and development fee income related to the Las Palomas project.
Gain on Asset Sales
A gain on asset sales of $833,000 was realized for the three months ended
November 30, 1995 due to the sale of the San Luis Obispo vineyards and
repurchase option which resulted in a gain of $830,000. There were no
sales in the current three month period.
<PAGE>
Interest Expense
Interest expense increased by $137,000 (101%) to $272,000 primarily due to
the acquisition in 1996 of $5.6 million of notes payable acquired in
connection with a corresponding note receivable due from an affiliate, and
from a $3.8 million note from an insurance company acquired during 1996,
collateralized by real and personal property.
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 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.
Moreover, long and short term liquidity are expected to continue to improve
due to: (i) the Company having entered into financing arrangements which
will provide for substantially all agricultural and farming costs related
to the 1997 harvest, and (ii) the generation of new revenues from the Las
Palomas development project and golf course, and from its AMCOR Biomass
Farms, LLC organic recycling/processing business, which commenced
commercial operations in the second fiscal quarter.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Note applicable
(b) Reports on Form 8-K:
Not applicable
Pursuant to the requirement 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.
Date: January 20, 1996 AMCOR CAPITAL CORPORATION
/S/FRED H. BEHRENS
Fred H. Behrens, Chairman and
Principal Executive and
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FORM
10-QSB FOR THE QUARTER ENDED NOVEMBER 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 516
<SECURITIES> 0
<RECEIVABLES> 7467
<ALLOWANCES> 0
<INVENTORY> 1036
<CURRENT-ASSETS> 9019
<PP&E> 11206
<DEPRECIATION> 1840
<TOTAL-ASSETS> 33732
<CURRENT-LIABILITIES> 4154
<BONDS> 0
<COMMON> 24
0
6
<OTHER-SE> 12956
<TOTAL-LIABILITY-AND-EQUITY> 33732
<SALES> 0
<TOTAL-REVENUES> 1220
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 410
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 272
<INCOME-PRETAX> 538
<INCOME-TAX> 93
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 445
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>