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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From __________ to __________
Commission File Number 0-18974
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Jordan American Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Florida 65-0142815
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1875 Ski Time Square, Suite One, Steamboat Springs, CO 80487
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (800) 879-1189
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Name of Each Exchange on Which Registered
- -------------------------------------------------------------------------------
None None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to filing requirements
for the past 90 days. Yes X No
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As of June 30, 1996, 10,703,376 shares of the registrant's common stock were
issued and outstanding.
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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
(NASDAQ: JAHI)
<TABLE>
Table Of Contents
Part I. Financial Information:
<S> <C>
Item 1:
Consolidated Balance Sheets . . . . . . . . 3
Consolidated Statements of Operations . . . 4
Consolidated Statements of Cash Flows . . . 5
Notes to Consolidated Financial Statements 6
Item 2:
Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . 6
</TABLE>
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<TABLE>
<CAPTION>
PART I.
FINANCIAL INFORMATION
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited)
June 30, December 31,
1996 1995
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<S> <C> <C>
ASSETS
Cash and cash equivalents $2,412,942 $2,424,806
Marketable securities 428,640 355,238
Receivables, net 379,471 456,655
Deposit with clearing broker 25,000 25,000
Prepaid expenses and other current assets 29,888 18,193
Land and building held for sale - 557,832
Property and equipment, net 196,740 196,164
Note receivable 446,175 -
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Total assets $3,918,856 $4,033,888
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 341,503 $ 169,757
Deferred investment advisory fees 278,724 315,254
Preferred stock dividend payable 120,000 -
Note payable - 373,121
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Total liabilities 740,227 858,132
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Stockholders' equity:
8% cumulative, convertible, non-voting preferred stock,
$.01 par value; authorized 5,000,000 shares;
3,000,000 shares issued and outstanding 30,000 30,000
Common stock, $.001 par value; authorized 20,000,000
shares; 10,703,376 shares issued and outstanding
at June 30, 1996; 10,836,544 shares issued and
outstanding at December 31, 1995 10,703 10,836
Additional paid-in capital 5,020,389 5,197,632
Accumulated deficit (1,882,463) (2,062,712)
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Total stockholders' equity 3,178,629 3,175,756
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Total liabilities and stockholders' equity $3,918,856 $4,033,888
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</TABLE>
See accompanying notes to consolidated financial statements.
3
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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
REVENUE
Investment advisory fees $460,867 $205,137 $1,234,580 $388,342
Commission income 100,512 244,995 231,468 395,258
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Total revenues 561,379 450,132 1,466,048 783,600
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Selling, general and administrative expenses
582,535 424,420 1,204,002 778,720
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Operating income (loss) (21,156) 25,712 262,046 4,880
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OTHER INCOME (EXPENSES)
Interest and dividend income 41,893 9,988 71,791 33,686
Unrealized gain (loss) from investing and trading (24,858) 13,482 (45,636) (6,170)
Realized gain (loss) from investing and trading (33,682) 42,261 36,807 (1,721)
Loss on disposal of land and building - - (8,341) -
Other, net - (1,100) - (1,569)
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Total other income (expense), net
(16,647) 64,631 54,621 24,226
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Net income (loss) from continuing operations (37,803) 90,343 316,667 29,106
Operating (loss) from discontinued operations - (128,297) - (238,099)
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Net income (loss) (37,803) (37,954) 316,667 (208,993)
Dividends on preferred stock 60,000 60,000 120,000 120,000
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Net income (loss) attributable to common stock ($97,803) ($97,954) $196,667 ($328,993)
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Net income (loss) per common share and
share equivalent attributable to common stock
Continuing operations ($.01) $.00 $.02 ($.01)
Discontinued operations - (.01) - (.02)
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Net income (loss) per share and share equivalent ($.01) ($.01) $.02 ($.03)
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Weighted average number of share and
share equivalents outstanding 10,779,902 11,264,061 10,811,025 11,259,272
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</TABLE>
See accompanying notes to consolidated financial statements.
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<TABLE>
<CAPTION>
JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30,
1996 1995
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<S> <C> <C>
Cash flows from (for) operating activities
Net income from continuing operations $ 316,667 $ 29,106
Adjustments to reconcile net income
to cash provided by (used in) operating activities:
Depreciation 11,268 43,039
Unrealized (gain) loss from investing and trading 45,636 6,170
Realized (gain) loss from investing and trading (36,807) 1,721
Loss on disposal of land, building and equipment 10,288 -
Changes in operating assets and liabilities:
Investment advisory fees receivable 128,514 (76,636)
Trading marketable securities (82,231) (288,141)
Prepaid expenses and other current assets (63,055) (173,860)
Accounts payable and accrued expenses 171,746 34,838
Deferred investment advisory fees (36,530) (52,878)
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Net cash provided by (used in) continuing operations 465,496 (476,641)
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Net cash (used in) discontinued operations - (177,463)
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Net cash provided by (used in) operating activities 465,496 (654,104)
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Cash flows for investing activities
Capital expenditures (10,182) (284)
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Net cash (used in) investing activities (10,182) (284)
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Cash flows from (for) financing activities
Repurchase of common stock (206,065) -
Net proceeds from issuance of common stock 12,300 -
Repayment of note payable (373,121) -
Proceeds from sale of land and building 99,708 -
Repayment of long-term indebtedness - (24,025)
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Net cash (used in) financing activities (467,178) (24,025)
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Net (decrease) in cash and cash equivalents (11,864) (678,413)
Cash and cash equivalents beginning of period 2,424,806 1,915,170
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Cash and cash equivalents end of period $2,412,942 $1,236,757
========== ==========
Supplemental disclosure:
Interest expense $ 163 $ 17,784
Dividends on preferred stock $ 120,000 $ 120,000
Note received upon sale of land and building $ 446,175 $ -
</TABLE>
See accompanying notes to consolidated financial statements.
5
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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES
(NASDAQ: JAHI)
Notes to Consolidated Financial Statements (Unaudited)
In the opinion of management, the accompanying consolidated financial
statements contain all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly the consolidated balance sheets of
Jordan American Holdings, Inc. and subsidiaries (the "Company") as of June 30,
1996, and December 31, 1995, and the results of its operations for the
three months and six months ended June 30, 1996, and 1995, and the results of
its cash flows for the six months ended June 30, 1996 and 1995, in accordance
with generally accepted accounting principles. The results for interim
periods are not necessarily indicative of results for a full year.
Investment advisory fees billed in advance are deferred and amortized
into income over the period in which services are performed. Investment
advisory fees based on a percentage of the annual increase (performance
billings) in the market value of a client's portfolio, including interest and
dividends, are fully recognized at the contract anniversary date. Management
fee compensation due sales representatives is accrued when such fees are earned.
Commission income is recognized on a settlement date basis, which does not
differ materially from the trade date basis of accounting. Marketable
securities consist primarily of corporate stocks held in Company investment
accounts. Realized and unrealized gains or losses result from the trading of
securities and stock index futures contracts.
Net income (loss) per share and share equivalent is based upon the
weighted average number of share and share equivalents outstanding during the
period. The calculations ignore common stock equivalent shares when their
inclusion in such calculations would have been anti-dilutive.
These interim period consolidated financial statements, including the
notes thereto, are condensed and do not include all disclosures required by
generally accepted accounting principles. Such interim period consolidated
financial statements should be read in conjunction with the Company's
consolidated financial statements which are included in the Company's 1995
Form 10-KSB which is contained in the Company's 1995 Annual Report to
shareholders and is available without charge upon request to Frederick A.
Whittlesey, 1875 Ski Time Square, Suite One, Steamboat Springs, Colorado,
80487, (800)879-1189; Fax: (970)879-1272.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Results of Operations
The Company had net income from continuing operations for the six months
ended June 30, 1996, of $196,667 or $.02 per common share and share equivalent
compared to a net loss from continuing operations of ($90,894) or ($.01) per
common share and share equivalent for the same period in 1995. The Company had
a net loss from continuing operations for the three months ended June 30, 1996,
of ($97,803) or ($.01) per common share and share equivalent
6
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compared to net income from continuing operations of $30,343 or $.00 per common
share and share equivalent for the same period in 1995.
During the six months ended June 30, 1996, revenues from investment
advisory fees totaled $1,234,580 compared to revenues from investment
advisory fees of $388,342 for the same period in 1995, an increase of
approximately 218% due primarily to strong performance billings in managed
accounts during the first two quarters of fiscal 1996. For the three
months ended June 30, 1996, revenues from investment advisory fees totaled
$460,867 compared to revenues from investment advisory fees of $205,137 for
the same period in 1995, an increase of approximately 125% due primarily to
strong performance billings in managed accounts during the second quarter.
Total other income (expense) was $54,621 for the six months ended June
30, 1996 compared to $24,226 for the six months ended June 30, 1995, an
increase of approximately 125%. This increase is primarily due to increased
interest and dividend income and to profits from trading stock index futures
contracts. Total other income (expense) for the three months ended June 30,
1996 was a loss of ($16,647) versus a gain of $64,631 for the same period in
1995. The loss of ($16,647) is due primarily to realized and unrealized
losses from investing and trading activity.
Selling, general, and administrative ("SG&A") expenses of $1,204,002
were incurred during the six month period ended June 30, 1996, compared to
SG&A expenses of $778,720 for the same period in 1995, an increase of
approximately 55%. This increase in SG&A expenses resulted from the cost
of an arbitration settlement, selling expenses related to increased
performance in clients' accounts, and increased general operating costs.
For the three months ended June 30, 1996, SG&A expenses of $582,535 decreased
approximately 6% from SG&A expenses of $621,467 for the three months ended
March 31, 1996.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock Based Compensation"
(SFAS 123), which is effective for fiscal years beginning after December
15, 1995. SFAS recommends, but does not require, measuring compensation cost
of stock options at the grant date and recognizing the expense over the
service period. If the Company does not change its accounting method, SFAS 123
requires, at a minimum, disclosure of the pro forma impact on net income and net
earnings per share. The Company has determined that it will not change from its
current method of accounting, but will make the disclosures required by
SFAS 123.
Liquidity and Capital Resources
At June 30, 1996, the Company had cash and cash equivalents of $2,412,942
versus $2,424,806 at December 31, 1995. The Company had marketable securities
of $428,640 at June 30, 1996 versus marketable securities of $355,238 at
December 31, 1995.
Accounts payable and accrued expenses were $341,503 at June 30, 1996
compared to $169,757 at December 31, 1995, an increase of approximately 101%.
This increase is primarily due to accruals during the second quarter of fiscal
1996 for marketing expenses and various professional fees.
7
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Preferred stock dividends are normally paid semi-annually as of June 30
and December 31 of each year. At the request of the holder of the preferred
stock, the Company agreed to pay the first semi-annual dividend of $120,000 on
July 31 of each year and the second semi-annual dividend of $120,000 on November
30. This arrangement was agreed to by both parties to assist the holder of the
preferred stock in its cash flow needs related to its charitable giving as a
private foundation. This arrangement has no material impact on the annual
operations and/or earnings of the Company.
8
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SIGNATURES
Pursuant to the requirements 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.
JORDAN AMERICAN HOLDINGS, INC.
Dated: August 5, 1996 By: /s/ Wallace Neal Jordan
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Wallace Neal Jordan
President (Chief Executive Officer)
Dated: August 5, 1996 By: /s/ Frederick A. Whittlesey
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Frederick A. Whittlesey
Chief Financial Officer
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF JORDAN AMERICAN HOLDINGS, INC. FOR THE SECOND QUARTER
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,412,942
<SECURITIES> 428,640
<RECEIVABLES> 379,471
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,847,301
<PP&E> 196,740
<DEPRECIATION> 11,268
<TOTAL-ASSETS> 3,918,856
<CURRENT-LIABILITIES> 740,227
<BONDS> 0
0
0
<COMMON> 10,703
<OTHER-SE> 30,000
<TOTAL-LIABILITY-AND-EQUITY> 3,918,856
<SALES> 0
<TOTAL-REVENUES> 561,379
<CGS> 0
<TOTAL-COSTS> 582,535
<OTHER-EXPENSES> 16,647
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (97,803)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (97,803)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
