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, 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 7,578,819 on January 14, 1998.
<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, 1997. 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, 1997 and August 31, 1997
(Amounts in thousands)
<CAPTION>
November 30,
1997 August 31,
(Unaudited) 1997
----------- ----------
<S> <C> <C>
A S S E T S
Current assets:
Cash and short-term investments $ 875 $ 180
Restricted cash 473 842
Accounts receivable, prepaids
and accrued interest 483 431
Notes receivable 292 1,715
Advances and accounts receivable due
from affiliated partnerships for farming
and land management 7,629 8,064
Inventories 2,618 1,213
Other current assets 574 847
----------- ----------
Total current assets 12,944 13,292
Land held for future development 9,517 9,412
Property and equipment, net 14,158 10,795
Contractual advances due from affiliates
for construction in progress 4,225 3,793
Notes receivable, other 136 116
Customer lists and other intangibles 2,401 -
Investments 2,496 2,456
Other assets 883 871
----------- ----------
Total assets $ 46,760 $ 40,735
=========== ==========
<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, 1997 and August 31, 1997
(Amounts in thousands)
<CAPTION>
November 30,
1997 August 31,
(Unaudited) 1997
----------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 3,807 $ 4,850
Due to affiliates 395 620
Lines of credit - 1,129
Notes payable, affiliates 1,370 1,370
Notes payable, other 2,545 2,628
Accrued interest 439 377
Income taxes payable 704 1,037
Capitalized lease obligation 220 224
----------- ----------
Total current liabilities 9,480 12,235
Deferred income taxes 128 57
Notes and loans payable, net of current portion:
Affiliates 1 276 1,276
Other 9,547 8,847
Capitalized lease obligation, net of
current portion 481 539
Other liabilities 158 261
----------- ----------
Total liabilities 21,070 23,215
Shareholders' equity:
Preferred stock (1,250,000 shares
authorized, no shares outstanding) - -
Series A 9% Convertible Preferred Stock
($0.01 par value; 812,500 authorized,
747,500 shares issued and outstanding
at November 30, 1997) 7 -
Series B Convertible Preferred Stock
($.01 par value; 750,000 shares authorized,
404,414 shares issued and outstanding at
November 30 and August 31, 1997,
respectively) 4 4
Common stock ($.002 par value; 25,000,000 and
15,000,000 shares authorized; and 7,578,819
and 7,172,710 shares issued and outstanding
at November 30, and August 31, 1997) 15 14
Paid-in capital 22,420 14,242
Accumulated earnings 3,244 3,260
----------- ----------
Total shareholders' equity 25,690 17,520
----------- ----------
Total liabilities and
shareholders' equity $ 46,760 $ 40,735
=========== ==========
<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, 1997 and the
three months ended November 30, 1996
(Unaudited)
(Amounts in thousands, except per share data)
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Revenues:
Crop sales and other farm income $ 307 -
Management, lease income, and other
fees from affiliates 301 $1,001
Other income 32 6
----------- ----------
640 1,007
----------- ----------
Operating costs and expenses:
Farming costs and cost of crops sold 102 -
Other operating expenses 576 297
Wages and salaries 234 113
----------- ----------
912 410
----------- ----------
Income (loss) from operations (272) 597
Other income and expense:
Interest income 25 213
Interest expense (71) (272)
----------- ----------
(46) (59)
----------- ----------
Income before extraordinary item
and income taxes (318) 538
Provision for income taxes (134) 93
----------- ----------
Income (loss) before extraordinary item (184) 445
Extraordinary item - gain on reduction of
debt (net of income tax of $203) 280 -
----------- ----------
Net income $ 96 $445
=========== ==========
Earnings (loss) per common share,
share equivalent basic:
Loss before extraordinary item $(0.02) $ 0.07
Extraordinary item 0.03 -
----------- ----------
Net income $ 0.01 $ 0.07
=========== ==========
Earnings (loss) per common share,
share equivalent diluted:
Loss before extraordinary item $(0.02) $ 0.06
Extraordinary item 0.03 -
----------- ----------
Net income $ 0.01 $ 0.06
=========== ==========
<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, 1997 and the year
ended August 31, 1997
(Unaudited)
<CAPTION>
Series A Series B
Preferred Preferred Common
Shares Shares Shares
----------- ----------- ----------
<S> <C> <C> <C>
Balance, August 31, 1996 - 628,972 11,596,566
Net income - - -
Shares issued under consul-
ting agreement - - 400,000
One-for-two reverse stock
split (including effect of
fractional shares) - - (5,998,547)
Shares issued upon exercise
of options - - 30,000
Shares issued in acqui-
sition of partnership assets - - 271,017
Shares issued in payment
for debt - - 912,622
Preferred stock retired as
payment of receivable - (171,983) -
Common stock retired as
payment of receivable - - (200,000)
Exchange of preferred stock
for common stock - (52,575) 161,052
Preferred stock dividends,
accrued - - -
-------- ----------- ----------
Balance, August 31, 1997 - 404,414 7,172,710
Net income - - -
Preferred stock issuance 747,500 - -
Shares issued to acquire
TransPacific Environmental,
Inc. - - 406,109
Preferred stock dividends,
accrued - - -
-------- ----------- ----------
Balance, November 30, 1997 747,500 404,414 7,578,819
======== =========== ==========
<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, 1997 and the year
ended August 31, 1997
(Unaudited)
(Amounts in thousands)
<CAPTION>
----------- Par Value ----------
Series A Series B
Preferred Preferred Common
Stock Stock Stock
----------- ----------- ----------
<S> <C> <C> <C>
Balance, August 31, 1996 - $ 6 $ 24
Net income - - -
Shares issued under consul-
ting agreement - - 1
One-for-two reverse stock
split (including effect of
fractional shares) - - (12)
Shares issued upon exercise
of options - - -
Shares issued in acqui-
sition of partnership assets - - -
Shares issued in payment
for debt - - 2
Preferred stock retired as
payment of receivable - (2) -
Common stock retired as
payment of receivable - - (1)
Exchange of preferred stock
for common stock - - -
Preferred stock dividends,
accrued - - -
--------- ----------- ----------
Balance, August 31, 1997 - 4 14
Net income - - -
Preferred stock issuance $ 7 - -
Shares issued to acquire
TransPacific Environmental,
Inc. - - 1
Preferred stock dividends,
accrued - - -
--------- ----------- ----------
Balance, November 30, 1997 $ 7 $ 4 $ 15
========= =========== ==========
<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, 1997 and the year
ended August 31, 1997
(Unaudited)
(Amounts in thousands)
<CAPTION>
Par Value
Paid in Accumulated Total
Capital Earnings Equity
--------- ----------- ----------
<S> <C> <C> <C>
Balance, August 31, 1996 $11,150 $1,454 $12,634
Net income - 2,176 2,175
Shares issued under consul-
ting agreement 360 - 360
One-for-two reverse stock
split (including effect of
fractional shares) 12 - -
Shares issued upon exercise
of options 60 - 60
Shares issued in acqui-
sition of partnership assets 1,437 - 1,438
Shares issued in payment
for debt 3,791 - 3,793
Preferred stock retired as
payment of receivable (1,718) - (1,720)
Common stock retired as
payment of receivable (850) - (850)
Exchange of preferred stock
for common stock - (370) (370)
Preferred stock dividends,
accrued - - -
--------- ----------- ----------
Balance, August 31, 1997 14,242 3,260 17,520
Net income - 96 96
Preferred stock issuance 6,148 - 6,155
Shares issued to acquire
TransPacific Environmental,
Inc. 2,030 - 2,031
Preferred stock dividends,
accrued - (112) (112)
--------- ----------- ----------
Balance, November 30, 1997 $22,420 $3,244 $25,690
========= =========== ==========
<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, 1997 and the
three months ended November 30, 1996
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
(Amounts in thousands)
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Cash flows provided (used) in operating
activities $ (4,821) $ (1,184)
----------- ----------
Cash flows provided (used) in investing
activities:
Payments received on notes receivable 1,403 66
Purchases of property and equipment (105) -
Advances due from affiliated partnerships
for contractual construction in progress (432) (1,150)
Restricted cash 369 612
----------- ----------
Net cash provided (used) for investing
activities 1,235 (472)
----------- ----------
Cash flows provided (used) in financing
activities:
Proceeds from notes, loans, leases and
advances payable 467 1,165
Repayments of notes and advances payable (2,341) (80)
Issuance of stock 6,155 -
----------- ----------
Net cash provided (used) in financing
activities 4,281 1,085
----------- ----------
Net increase/(decrease) in cash 695 (571)
Cash at beginning of period 180 1,087
----------- ----------
Cash at end of period $ 875 $ 516
=========== ==========
<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, 1997 and the
three months ended November 30, 1996
(Unaudited)
(Amounts in thousands)
Supplemental Disclosure of Cash Flow Information
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
Cash paid during the period for:
Interest $62 $179
Supplemental Schedule of Non-Cash Investing and Financing Activities
1997 1996
----------- ----------
Accrual of dividends on preferred stock
Liabilities incurred $112 $93
Reduction in retained earnings (112) (93)
Acquisition of TransPacific Environmental, Inc.
Increase in accounts receivable 196 -
Reduction in prepaid expenses (350) -
Property, plant and equipment acquired 500 -
Customer lists and other intangibles
acquired 2,401 -
Increase in other assets 1 -
Liabilities incurred (612) -
Notes payable assumed (105) -
Common stock issued (2,031) -
Acquisition of land and vineyards
Reduction in affiliate receivable (1,245) -
Land and vineyards acquired 3,028 -
Notes payable assumed (1,783) -
<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, 1997
1. Income (loss) Per Common Share
Basic and 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. The basic weighted average common and common equivalent shares, as
applicable, outstanding during the three months ended November 30, 1997 and
1996, was 7,578,819 and 6,059,709, respectively. The diluted average common
and common equivalent shares, as applicable, outstanding during the three
months ended November 30, 1997 and 1996, was 7,578,819 and 6,271,000,
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
3. Development costs advanced by the Company on behalf of various
partnerships for a residential development in Texas.
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. Costs associated with construction-in-progress of certain
residential structures at the Company's Texas development
property.
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Property and Equipment
<TABLE>
<CAPTION>
November 30, August 31,
1997 1997
----------- ----------
<S> <C> <C>
(Amounts in thousands)
Property and equipment consists
of the following:
Vineyard and date development costs $ 7,902 $ 5,294
Vehicles and equipment 5,667 3,406
Office furniture and equipment 74 51
Leasehold improvements 61 61
Buildings 302 302
------- ------
14,006 9,114
Less: accumulated depreciation (3,807) (2,088)
------- ------
10,199 7,026
Land 3,959 3,769
------ ------
$14,158 $10,795
====== ======
<FN>
Vehicles and equipment reported under capital lease at November 30, 1997,
was $924,640 with accumulated depreciation of $67,731. Depreciation expense
related to the capital leases was $12,231 for the three months ended
November 30, 1997.
</TABLE>
5. Investments
November 30, August 31,
1997 1997
---------- ----------
(Amounts in thousands)
Investments consists of the
following:
Investment in P.S. III Farms,
L.L.C. utilizing the equity
method of accounting $ 2,509 $ 2,456
====== ======
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:
<TABLE>
<CAPTION> November 30, August 31,
1997 1997
---------- ----------
<S> <C> <C>
(Amounts in thousands)
Current expense:
Federal $ 58 $682
State 2 $ 3
Deferred:
Federal (5) 128
State 14 (184)
-------- --------
Total provision $ 69 $629
======== ========
</TABLE>
7. Commitments And Contingencies
The Company has operating leases for certain of its facilities and
office equipment. Future minimum lease payments at November 30, 1997
are as follows:
(Amounts in thousands)
1998 $ 283
1999 272
2000 215
2001 188
2002 and thereafter 231
--------
Total future minimum
lease payments $ 1,189
========
<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:
Three Months Ended Year Ended
November 30, 1997 August 31, 1997
-------------------- --------------------
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
------- -------- ------- ---------
Options outstanding,
beginning of period 671,639 $1.72 541,633 $1.06
Options exercised - - (30,000) 2.00
Options granted - - 160,000 2.50
Options forfeited - - - -
--------- ---------
Options outstanding,
end of period 671,639 1.72 671,633 1.72
Option price range,
end of period $0.75 to $4.00 $0.75 to $4.00
Option price range
for exercised shares - $2.00
Options available for grant
at end of year 2,500 2,500
Weighted-average fair
value of options granted - $2.39
The following table summarizes information about fixed-price stock options
outstanding at November 30, 1997:
Weighted
Average
Number of Remaining Number
Outstanding at Contractual Exercisable at
Exercise Price November 30, 1997 Life November 30, 1997
-------------- --------------- ----------- --------------
$0.75 31,250 3 years 31,250
$1.60 422,883 3 years 422,883
$1.30 87,500 7 years 87,500
$2.00 90,000 10 years 41,250
$4.00 40,000 10 years -
<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 three months ended November 30,
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 the three months ended November 30, 1997.
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 three months ended November 30, 1997 and year
ended August 31, 1997 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:
Three Months Ended Year Ended
November 30, 1997 August 31, 1997
---------------- ----------
Net earnings, as reported $96,000 $2,176,366
Net earnings, pro forma $89,880 $2,171,566
Earnings per share, as reported $0.01 $0.33
Earnings per share, pro forma $0.01 $0.33
<PAGE>
AMCOR CAPITAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
9. Sale of Preferred Stock
During the first quarter of fiscal year 1998, the Company sold 747,500
shares of its Series A 9% Convertible Preferred Stock at $10 per share.
The net proceeds of $6,802,250 (before expenses related to the offering)
were used principally to finance expansion of the agriculture and biomass
segments of the Company's business, which resulted in a significant reduction
in the Company's current liabilities in repayment of funds previously advanced
for expansion purposes. In conjunction with the creation, issuance, and sale
of the new preferred stock, the Company and the original Series A stockholders
approved changing the designation of the prior Series A Convertible Preferred
Stock to Series B Convertible Preferred Stock and making it subordinate to the
new Series A 9% Convertible Preferred Stock.
10. Acquisition of TransPacific Environmental, Inc.
On November 25, 1997, the Company completed the purchase of the assets of
TransPacific Environmental, Inc. ("TransPacific"). TransPacific is a Santa Fe
Springs, California company engaged in clean green waste processing and contract
tree trimming services for municipalities. The assets of TransPacific were
acquired for cash, 406,109 shares of the Company's common stock, and the
assumption of certain liabilities of TransPacific.
<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, 1997, has improved considerably. Total assets have increased 15%
to $46.8 million, due primarily to the funding in September of 747,500 shares
of Series A Convertible Preferred Stock, which netted $6.2 million (after all
expenses related to the offering) proceeds, and the $2.5 million purchase in
November of TransPacific Environmental, Inc. This resulted in shareholders'
equity increasing 47% to $25.7 million.
The Company's current ratio increased to 1.37 at November 30, 1997, from 1.09
at August 31, 1997, primarily due to the reduction of debt from the proceeds
of the preferred stock offering.
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 three-months ended November 30, 1997, revenues were down from the
comparable 1996 quarter, mainly due to decreased management and development
fees related to the Las Palomas subdivision located southeast of San Antonio,
Texas, as this project's initial development phase is nearing completion.
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 and/or developed by the Company.
Crop sales and other farm income was $307,000 for the three-months ended
November 30, 1997, as compared to no revenues for the comparable three-months
ended November 30, 1996, due to revenues received from date properties acquired
earlier in the year from affiliates. Substantially all of the Company's crop
sales occur in the third and fourth quarters of the fiscal year.
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 decreased by $700,000, or 70%, from the
comparable three- month period ended November 30, 1996, due to the completion
of a development contract related to the Las Palomas subdivision, owned by an
affiliate, located 30 miles southeast of San Antonio, Texas. Subsequent fee
income from this project will be contingent on development of future phases of
Las Palomas.
<PAGE>
California development activity as the real estate market continues its
expected recovery.
Operating Costs and Expenses
The Company's total operating costs and expenses increased 122% to $912,000
from $410,000 for the three-months ended November 30, 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 were $102,000 as compared to no revenues
for the three-month period ended November 30, 1996, due to costs related to
date operations acquired during the year.
Other Operating Expenses
Other operating expenses increased $279,000 (94%) to $576,000 for the
three-months ended November 30, 1997, as compared to the prior comparable
three-months, due to increased legal, accounting, and other administrative
expenses related primarily to the Company's preferred stock offering, and for
biomass and transition costs related to the acquisition of TransPacific
Environmental, Inc.
Income from Operations
The Company posted an operating loss of $272,000 for the three-months ended
November 30, 1997, as compared to operating income of $597,000 for the
comparable prior period, primarily from the $1 million decreased management
and development fee income related to the completion of the initial development
phase of the Las Palomas project.
Interest Income
The Company generates interest income from notes receivables from certain
related partnerships, affiliates and third parties. This income decreased 88%
for the three-months ended November 30, 1997, due primarily to the acquisition
in the fourth quarter of fiscal 1997 of a 600-acre development parcel from an
affiliate in exchange for a $5.7 million note receivable due the Company and
assumed debt.
Interest Expense
Interest expense decreased 73% in the three-months ended November 30, 1997,
due primarily from debt retired from proceeds of the preferred stock offering,
and from the capitalization of interest cost related to the development of a
600-acre parcel in Southern California.
Extraordinary Item
The Company realized a $483,000 discount ($280,000 net of tax benefit) on a
note in consideration for agreeing to prepay a $3.9 million note, prior to its
maturity date.
<PAGE>
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, (iv) the
proceeds from its preferred stock offering, and (v) disposal of marginal or
non-producing assets. The Company anticipates that with the Company's
December 1997 listing on the Nasdaq Stock Market this should provide access to
additional capital markets. All of 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
1996 harvest, and (ii) the generation of new revenues from the acquisition of
TransPacific Environmental, Inc., and from real estate sales, particularly
should the California market continue its recovery. and (ii) the generation of
new revenues from the acquisition of TransPacific Environmental, Inc., and from
real estate sales, particularly should the California market continue its
recovery.
<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 October 21, 1997, as filed with the
Commission on October 27, 1997, reporting on Item 5
(Other Events) in connection with the Company's
offering and sale of its Series A 9% Convertible
Preferred Stock.
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 14, 1998 AMCOR CAPITAL CORPORATION
/S/FRED H. BEHRENS
Fred H. Behrens, Chairman and
Principal Executive and
Financial Officer
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FORM
10-QSB FOR THE QUARTER ENDED November 30, 1997 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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