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 May 31, 1997.
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)
(760) 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 6,028,019 on July 15, 1997.
<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
May 31, 1997 and August 31, 1996
(Amounts in thousands)
<CAPTION>
May 31,
1997 August 31,
(Unaudited) 1996
----------- ----------
<S> <C> <C>
A S S E T S
Current assets:
Cash $ 403 $ 1,087
Accounts receivable, prepaids
and accrued interest 4,370 655
Notes receivable 353 353
Advances and accounts receivable due
from affiliated partnerships for farming
and land management 5,960 5,338
Inventories 4,350 308
----------- ----------
Total current assets 15,436 7,741
Property and equipment, net 13,428 9,508
Contractual advances due from affiliated
partnerships for construction in progress 2,833 2,712
Notes receivable:
Affiliates and related parties 5,692 5,692
Other 1,596 1,963
Investments 2,456 2,490
Restricted cash 454 1,066
Other assets 1,036 831
----------- ----------
Total assets $ 42,931 $ 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
May 31, 1997 and August 31, 1996
(Amounts in thousands)
<CAPTION>
May 31,
1997 August 31,
(Unaudited) 1996
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 2,667 $ 854
Advances from affiliated partnerships 120 415
Notes and loans payable 6,712 965
Accrued interest 373 518
Income taxes payable 991 338
Capitalized lease obligation 153 55
----------- ----------
Total current liabilities 11,016 3,145
Deferred tax liability 19 125
Notes and loans payable, net of current portion:
Affiliates 3,033 3,673
Other 10,545 11,909
Capitalized lease obligation, net of
current portion 357 100
Other liabilities 1,052 417
----------- ----------
Total liabilities 26,022 19,369
Shareholders' equity:
Preferred stock (1,250,000 shares
authorized, no shares outstanding)
Series B Convertible Preferred Stock
($.01 par value; 750,000 shares authorized,
628,972 shares issued and outstanding at
May 31, 1997 and August 31, 1996) 6 6
Common stock ($.002 par value; 25,000,000 and
15,000,000 shares authorized; and 6,028,019 and
11,596,566 shares issued and outstanding at
May 31, 1997 and August 31, 1996) 12 23
Common Stock Subscribed 3,012 -
Paid-in capital 11,222 11,150
Accumulated earnings 2,657 1,454
----------- ----------
Total shareholders' equity 16,909 12,633
----------- ----------
Total liabilities and
shareholders' equity $ 42,931 $ 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 nine months ended May 31, 1997 and the
nine months ended May 31, 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Revenues:
Crop sales and other farm income $ 3,482 $ 1,482
Management, lease income, and other
fees from affiliates 1,845 851
Other income 225 39
----------- ----------
5,552 2,372
----------- ----------
Operating costs and expenses:
Farming costs and cost of crops sold 2,181 1,224
Other operating expenses 709 430
Other wages and salaries 504 506
----------- ----------
3,394 2,160
----------- ----------
Income from operations 2,158 212
Other income and expense:
Gain on sale of assets - 821
Interest income 591 204
Interest expense (720) (475)
----------- ----------
(129) 550
----------- ----------
Income before income taxes 2,029 762
Provision for income taxes 547 171
----------- ----------
Net income $ 1,482 $ 591
=========== ==========
Net income per common share, share
equivalent primary $ 0.21 $ 0.11
===== =====
Net income per common share, share
equivalent fully diluted $ 0.20 $ 0.11
===== =====
<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 May 31, 1997 and the
three months ended May 31, 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Revenues:
Crop sales and other farm income $ 3,332 $ 1,219
Management, lease income, and other
fees from affiliates 323 367
Other income 152 7
----------- ----------
3,807 1,593
----------- ----------
Operating costs and expenses:
Farming costs and cost of crops sold 2,181 1.016
Other operating expenses 215 180
Other wages and salaries 198 173
----------- ----------
2,594 1,369
----------- ----------
Income from operations 1,213 224
Other income and expense:
Gain on sale of assets - (7)
Interest income 159 60
Interest expense (376) (192)
----------- ----------
(217) (139)
----------- ----------
Income before income taxes 996 85
Provision for income taxes 191 29
----------- ----------
Net income $ 805 $ 56
=========== ==========
Net income per common share, share
equivalent primary $ 0.11 $ 0.01
===== =====
Net income per common share, share
equivalent fully diluted $ 0.11 $ 0.01
===== =====
<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 nine months ended May 31, 1997 and the year
ended August 31, 1996
(Unaudited)
<CAPTION>
Common
Shares Common Preferred
Subscribed Shares Shares
----------- ----------- ----------
<S> <C> <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 acquisi-
tion 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 stock
option plan - 30,000 -
Shares issued under consul-
ting agreement - 400,000 -
One-for-two reverse stock
split (including effect of
fractional shares) - (5,998,547) -
Shares subscribed in acqui-
sition of partnership assets 210,242 - -
Shares subscribed in exchange
for debt 452,893 - -
Preferred stock dividends,
accrued - -
-------- ----------- ----------
Balance, May 31, 1997 663,135 6,028,019 628,972
======== =========== ==========
<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 nine months ended May 31, 1997 and the year
ended August 31, 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
Common -------- Par Value ------
Stock Common Preferred
Subscribed Stock Stock
------- --------- ---------
<S> <C> <C> <C>
Balance, August 31, 1995 - $ 21 $ 6
Net Income - - -
Shares issued under stock
option plan - 2 -
Shares issued in acquisition
of partnership interests - - -
Preferred stock dividends,
accrued - - -
------- --------- ---------
Balance, August 31, 1996 - 23 6
Net income - - -
Shares issued under stock
option plan - - -
Shares issued under
consulting agreement - 1 -
One-for-two reverse stock
split (including effect
of fractional shares) - (12) -
Shares subscribed in acqui-
sition of partnership assets $1,143 - -
Shares subscribed in exchange
for debt 1,869 - -
Preferred stock dividends,
accrued - - -
---------- --------- ---------
Balance, May 31, 1997 $3,012 $12 $ 6
========== ========= =========
<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 nine months ended May 31, 1997 and the year
ended August 31, 1996
(Unaudited)
(Amounts in thousands)
<CAPTION>
Par Value
Paid in Accumulated Total
Capital Earnings Equity
--------- ----------- ----------
<S> <C> <C> <C>
Balance, August 31, 1995 $10,633 $ 48 $ 10,708
Net Income - 1,778 1,778
Shares issued under stock option
plan 414 - 416
Shares issued in acquisition
of partnership interests 103 - 103
Preferred stock dividends,
accrued - (372) (372)
-------- ----------- ----------
Balance, August 31, 1996 11,150 1,454 12,633
Net income - 1,482 1,482
Shares issued under stock option
plan 60 - 60
Shares issued under consulting
agreement - - 1
One-for-two reverse stock split
(including effect of fractional
shares) 12 - -
Shares issued in acquisition of
partnership assets - - 1,143
Shares issued in exchange for
debt - - 1,869
Preferred stock dividends,
accrued - (279) (279)
-------- ----------- ----------
Balance, May 31, 1997 $11,222 $ 2,657 $ 16,909
======== =========== ==========
<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 nine months ended May 31, 1997 and the
nine months ended May 31, 1997
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Amounts in thousands)
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Cash flows provided (used) in operating
activities $ (3,032) $ (4,557)
----------- ----------
Cash flows provided (used) in investing
activities:
Payments received on notes receivable - 3,568
Purchases of property and equipment (1,876) (441)
Sales of property and equipment - 19
Advances due from affiliated partnerships
for contractual construction in progress (121) (1,477)
Advances to affiliates (622) (2,388)
Restricted cash 612 -
----------- ----------
Net cash provided (used) for investing
activities (2,007) (719)
----------- ----------
Cash flows provided (used) in financing
activities:
Collection of notes receivable 367 -
Proceeds from notes, loans, leases and
advances payable 3,965 4,381
Repayments of notes and advances payable (38) (165)
Issuance of stock 61 -
----------- ----------
Net cash provided (used) in financing
activities 4,355 4,216
----------- ----------
Net increase/(decrease) in cash (684) (1,060)
Cash at beginning of period 1,087 1,809
----------- ----------
Cash at end of period $ 403 $ 749
=========== ==========
<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 nine months ended May 31, 1997 and the
nine months ended May 31, 1996
(Unaudited)
(Amounts in thousands)
Supplemental Disclosure of Cash Flow Information
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Cash paid during the period for:
Interest $389 $145
Supplemental Schedule of Non-Cash Investing and Financing Activities
1997 1996
----------- ----------
Satisfaction of debt through issuance of stock
Liabilities satisfied $1,869 $4
Stock issued - (4)
Stock subscribed (1,869) -
Accrual of dividends on preferred stock
Liabilities incurred 279 279
Reduction in retained earnings (279) (279)
Acquisition of notes receivable
Notes and accrued interest received - 6,998
Reduction of receivables - (189)
Liabilities incurred - (1,117)
Notes payable assumed (5,600)
Deferred revenue (92)
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 partnership assets
Land and date gardens 1,143 -
Stock subscribed (1,143) -
Acquisition of land and vineyards
Land and vineyards 440 -
Reduction of amount due from affiliate (440) -
<FN>
The accompanying notes are an integral part of the consolidated
financial statements.
</TABLE>
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
May 31, 1997
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 and nine months ended May 31, 1997
and May 31, 1996, was 7,012,754 and 7,019,513, respectively. The fully
diluted average common and common equivalent shares, as applicable,
outstanding during the three and nine months ended May 31, 1997 and
May 31, 1996, was 7,157,702 and 7,164,462, 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, and
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, lot sales, and the disposal
of other assets, and
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:
1. 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.
2. Merchandise held for sale related to the Company's golf course
operation.
3. Costs association with construction-in-progress of certain
residential structures at the Company's Texas development.
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Property and Equipment
May 31, August 31,
1997 1996
----------- ----------
(Amounts in thousands)
Property and equipment consists
of the following:
Vineyard and date development costs $ 7,606 $ 5,145
Vehicles and equipment 2,431 1,506
Office furniture and equipment 65 52
Leasehold improvements 61 61
Buildings 302 302
Golf course construction 2,210 1,394
------- ------
12,675 8,459
Less: accumulated depreciation (2,142) (1,698)
------- ------
10,533 6,761
Land 2,895 2,747
------ ------
$13,428 $ 9,508
====== ======
Vehicles and equipment reported under capital lease at May 31, 1997, was
$645,661 with accumulated depreciation of $66,154. Depreciation expense
related to the capital leases was $43,643 for the nine months ended May 31,
1997.
5. Investments
May 31, August 31,
1997 1996
---------- ----------
(Amounts in thousands)
Investments consists of the
following:
Investment in P.S. III Farms,
L.L.C. utilizing the equity
method of accounting $ 2,456 $ 2,490
====== ======
The Company is a general partner in a number of the affiliated partnerships,
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:
May 31, August 31,
1997 1996
---------- ----------
(Amounts in thousands)
Current expense:
Federal $650 -
State 2 $ 2
Deferred:
Federal 20 82
State (125) -
-------- --------
Total provision $547 $ 84
======== ========
7. Commitments And Contingencies
The Company has operating leases for certain of its facilities and
office equipment. Future minimum lease payments at May 31, 1997
are as follows:
(Amounts in thousands)
1997 $ 289
1998 305
1999 277
2000 248
2001 and thereafter 394
--------
Total future minimum
lease payments $ 1,513
========
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
8. Common Stock and Stock Options
The table below summarized stock option activity under current and prior
plans:
Nine Months Ended
May 31, 1997 1996
-------------------- --------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
------- -------- ------- ---------
Options outstanding,
beginning of period 541,633 $1.50 1,209,601 $1.06
Options exercised (30,000) 2.00 (630,468) 0.66
Options granted 150,000 2.53 - -
Options forfeited - - (37,500) 1.30
--------- ---------
Options outstanding,
end of period 661,633 1.71 541,633 1.50
Option price range,
end of period $0.75 to $4.00 $0.75 to $1.60
Option price range
for exercised shares $2.00 $0.66
Options available for grant
at end of year 12,500 162,500
Weighted-average fair
value of options granted $2.86 None
The following table summarizes information about fixed-price stock options
outstanding at May 31, 1997:
Weighted
Average
Number of Remaining Number
Outstanding at Contractual Exercisable at
Exercise Price May 31, 1997 Life May 31, 1997
-------------- --------------- ----------- --------------
$0.75 31,250 4 years 31,250
$1.60 422,883 4 years 422,883
$1.30 87,500 7 years 65,625
$2.00 80,000 10 years 16,250
$4.00 40,000 10 years 10,000
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
8. Common Stock and Stock Options, Continued
Fair Value Disclosures
----------------------
Stock option grants are set based upon the plan. Therefore, under the
principles of APB Opinion No. 25, the Company does not recognize
compensation expense associated with the grant of stock options.
SFAS No. 123, "Accounting for Stock-Based Compensation," requires the
use of option valuation models to provide supplemental information
regarding options granted after 1994. Pro forma information regarding
net income and earnings per share shown below was determined as if the
Company had accounted for its employee stock options and shares sold
under its stock purchase plan under the fair value method of that
statement.
The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model with the following weighted
average assumptions used for grants in the nine months ended May 31, 1997:
dividend yield of zero; expected volatility of .6542; risk-free interest
rate of 6.04%; and expected life of 10 years. There were no options
granted in 1996, therefore there would be no effect on the net earnings and
earnings per share.
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options. The Company's employee stock options have
characteristics significantly different from those of traded options such as
vesting restrictions and extremely limited transferability. In addition,
the assumptions used in option valuation models are highly subjective,
particularly the expected stock price volatility of the underlying stock.
Because changes in these subjective input assumptions can materially affect
the fair value estimate, in management's opinion, the existing models do not
provide a reliable single measure of the fair value of its employee stock
options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized over the options' vesting periods. The pro forma
effect on net income for the nine months ended May 31, 1997 and year
ended August 31, 1996 is not representative of the pro forma effect on net
income in future years because it does not take into consideration pro forma
compensation expense related to grants made prior to 1995. Pro forma
information in future years will reflect the amortization of a larger number
of stock options granted in several succeeding years. The Company's pro forma
information is as follows:
Nine Months Ended Year Ended
May 31, 1997 August 31, 1996
---------------- ----------
Net earnings, as reported $1,482,000 $1,777,941
Net earnings, pro forma 1$340,971 $1,777,941
Earnings per share, as reported $0.21 $0.17
Earnings per share, pro forma $0.19 $0.17
<PAGE>
9. Subsequent Event
A. Acquisition
On July 10, 1997, the Company acquired the customer contracts, lists,
and certain assets of TransPacific Environmental, Inc., a privately held
California corporation conducting a green waste processing, storage and
transfer business in Sante Fe Springs, California. The purchase price
included a promissory note of $150,000 and the issuance of 47,619 shares
of the Company's common stock. The Company also entered into a consulting
relationship with a principal of TransPacific Environmental, Inc.
B. Preferred Stock Registration Statement
On June 3, 1997, the Company filed a Registration Statement on Form S-2
with the Securities and Exchange Commission for the registration of 632,500
shares of $10.00 Series A 9% Convertible Preferred Stock. The Offering is
expected to be effective by July 31, and fund in August pursuant to an
underwriting agreement with Torrey Pines Securities, Inc.
<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 improved considerably. Total assets have increased
over 34% to $42.9 million, due primarily to the acquisition of a 160-acre
table grape vineyard and 130 acres of date properties from affiliates, and
higher inventories pertaining to a large 1997 table grape crop.
The Company's current ratio decreased to 1.46 at May 31, 1997, from 2.46 at
August 31, 1996, primarily due to the advances to affiliates to fund real
estate development costs, and for borrowings related to the 1997 table grape
crop. In addition, $2,8 million of 5% notes became current, due December 31,
1997.
RESULTS OF OPERATIONS
Revenues
The Company's revenues are derived principally from the following three
sources: (i) farming operations (including packing and cold storage services),
(ii) management/development fees for real estate development-land
partnerships, and (iii) the processing and recycling of "clean green" biomass.
For the nine-months ended May 31, 1997, the Company's gross revenues were
significantly higher than the comparable nine-months ended May 31, 1996, due
primarily to significantly higher table grape revenues than the previous
period and from increased management and development fees related to the Las
Palomas subdivision located southeast of San Antonio, Texas, and income
related to its California biomass operations.
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 processing 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 approximates $2 million.
The Company expects its crop sales to continue to increase as additional
properties are acquired through further partnership terminations and more
acreage is farmed by the Company. In addition, it has recently entered into a
letter of intent to plant 160 acres of the patented Superior Seedless table
grape under a licensing agreement with Sun World International, Inc.
Crop sales and other farm income of $3.5 million were up 135% for the
nine-months ended May 31, 1997, as compared to the comparable nine-months ended
May 31, 1996, due to a much larger and earlier maturing crop. Substantially
all of the Company's crop sales occur in the third and fourth quarters of the
fiscal year.
<PAGE>
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. This source will
continue to decrease as additional partnership terminations are completed.
The accounting fees generally range from $5,000 to $10,000 per year per
partnership.
Management and other fee income increased substantially from the comparable
nine-month period ended May 31, 1997, due to a development contract related to
the 1,000-lot subdivision, owned by an affiliate, located 30 miles southeast
of San Antonio, Texas, and from pre-development fee income related to
California real estate. Other income consists primarily of income related to
the Company's start-up golf course and biomass operations. Other income
increased from $39,000 to $225,000 for the nine-months ended May 31, 1997, due
to increasing golf course and biomass revenues. The golf course, which is
owned by the Company, is leased to an affiliate for a rental of $137,500
for the 1997 calender year and $275,000 per year thereafter.
Operating Costs and Expenses
The Company's total operating costs and expenses were $3.4 million and $2.2
million for the nine-months ended May 31, 1997, and 1996, respectively. These
costs and expenses include, among others, corporate overhead expenses, biomass
processing costs, farming costs and cost of crops sold and depreciation
expenses.
Farming Costs and Cost of Crops Sold
Farming costs and costs of crops sold increased $957,000 (78%) for the
nine-month period ended May 31, 1997, as compared to the comparable nine-month
period ended May 31, 1996, due to the much larger and earlier maturing crop
than the prior year.
Other Operating Expenses
Other operating expenses increased $279,000 (65%) to $709,000 for the
nine-months ended May 31, 1997, as compared to the prior nine-months, due to
increased legal, accounting, and other administrative expenses related
primarily to the Company's start-up biomass operations.
<PAGE>
Income from Operations
The Company posted operating income of $2,158,000 for the nine-months ended
May 31, 1997, as compared to operating income of $212,000 for the comparable
prior period, primarily from the increased profit margin from a substantially
larger 1997 table grape crop, but also due to increased management and
development fee income related to the Las Palomas project, biomass operations,
and from predevelopment fee income related to California real estate.
Gain on Asset Sales
A gain on asset sales of $821,000 was realized for the nine-months ended May
31, 1996, due to the sale of the San Luis Obispo vineyards and repurchase
option which resulted in a gain of $830,000. There were no such sales in the
current nine-month period.
Interest Income
The Company generates interest income from notes receivables from certain
related partnerships, affiliates and third parties. This income increased
190% due primarily from a $5.6 million secured note receivable acquired in
1996 due from an affiliate.
Interest Expense
Interest expense increased by $245,000 (52%) to $720,000 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 (see Interest
Income above), and from a $4.3 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) profitable agricultural operations plus
potential new revenues from real estate and biomass activities, 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 that have
provided 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
<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
27 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-k, dated February 21, 1997, as filed with the
Commission on March 4, 1997, reporting on Item 5
(Other Events) in connection with the Company's annual
meeting of shareholders.
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: July 15, 1997 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 FEBRUARY 28, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<PERIOD-END> MAY-31-1997
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