SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
For Quarter Ended June 30, 1996
Commission File Number 0-25164
LUCOR, INC.
Florida 65-0195259
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
902 Clint Moore Road, Suite 100, Boca Raton, Florida 33487
(Address of principal executive offices) (Zip Code)
(407) 997-5601
Registrant's telephone number, including area code
(Former name, former address and former fiscal year,
if changed since last reported)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding twelve 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 ninety days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
Date: August 12, 1996 Class A Common Stock, par value $.02 per share
Shares Outstanding: 2,098,733
Class B Common Stock, par value $.02 per share
Shares Outstanding: 702,155
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LUCOR, INC.
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Comparative Balance Sheet
June 30, 1996 and December 31, 1995 1
Consolidated Statement of Income
Three Months Ended June 30, 1996
and June 30, 1995 and Six Months Ended
June 30, 1996 and June 30, 1995 2
Consolidated Statement of Cash Flows
Six Months Ended June 30, 1996 and
June 30, 1995 3
Notes to Consolidated Financial
Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operation 4
PART II - Other Information
Item 1. Legal Proceedings 6
Item 2. Changes in Securities 6
Item 3. Defaults Upon Senior Securities 6
Item 4. Submission of Matters to a Vote of
Security Holders 6
Item 5. Other Information 6
Item 6. Exhibits and Reports on Form 8-K 6
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LUCOR, INC AND SUBSIDIARIES
COMPARATIVE BALANCE SHEET
ASSETS 30-June-96 31-Dec-95
__________ ___________
Current assets:
Cash $5,375,907 $ 2,344,484
Accounts Receivable 576,551 462,510
Inventory 1,788,540 1,126,302
Prepaid charges 385,890 210,103
Income Tax Receivable 229,705 0
__________ ___________
Total Current assets 8,356,593 4,143,399
__________ ___________
Property, plant & equipment, net
of accumulated depreciation 19,970,891 14,246,603
__________ ___________
Other assets:
Goodwill, licenses, application,
area development and organization
costs, net of accumulated
amortization 4,485,462 3,087,759
Other assets 70,064 200,285
__________ ___________
Total other assets 4,555,526 3,288,044
__________ ___________
Total assets $32,883,010 $21,678,046
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion, long term debt $ 697,550 $ 328,121
Accounts payable 3,884,065 2,243,287
Accrued expenses 1,559,603 659,928
Preferred dividend payable 35,000 35,000
___________ ___________
Total current liabilities 6,176,218 3,266,336
___________ ___________
Long term debt, net of
current portion 15,138,391 12,068,721
Deferred Taxes 130,237 130,237
__________ ___________
Total Long Term Liabilities 15,268,628 12,198,958
__________ ___________
Redeemable preferred stock 2,000,000 2,000,000
__________ ___________
Stockholders' equity 9,438,164 4,212,752
__________ ___________
Total liabilities, equity $32,883,010 $21,678,046
=========== ===========
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<TABLE>
LUCOR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MOS THREE MOS SIX MOS SIX MOS
ENDED ENDED ENDED ENDED
30-JUN-96 30-JUN-95 30-JUN-96 30-JUN-95
__________ _________ __________ ___________
<S> <C> <C> <C> <C>
Full service cars 255,504 180,093 477,891 336,789
========== ========== ========== ==========
Net sales $9,413,850 $6,410,036 $17,310,453 $12,003,022
Cost of sales 2,231,139 1,552,731 4,116,960 2,914,517
__________ _________ __________ __________
Gross profit 7,182,711 4,857,305 13,193,493 9,088,505
__________ _________ __________ __________
Costs and expenses:
Direct 3,533,359 2,167,700 6,446,272 4,044,308
Operating 1,978,528 1,451,746 3,697,650 2,719,199
Depreciation 429,859 149,575 754,199 269,954
Selling, general, and
administrative 1,222,824 736,950 2,420,515 1,405,940
__________ _________ __________ __________
7,164,570 4,505,971 13,318,636 8,439,401
__________ _________ __________ __________
Income from operations 18,141 351,334 ( 125,143) 649,104
__________ _________ ___________ __________
Other income 29,967 12,777 97,729 27,697
Interest expense (212,287) ( 84,544) ( 420,953) ( 119,580)
__________ _________ ___________ __________
Income before provision
for income taxes ( 164,179) 279,567 ( 448,367) 557,221
Provision for income taxes ( 41,591) 104,802 ( 153,469) 217,271
__________ ________ __________ __________
Net income ( 122,588) 174,765 ( 294,898) 339,950
Preferred dividend accrued ( 35,000) 0 ( 70,000) 0
__________ _________ ___________ _________
Net income available to
common shareholders ($ 157,588) $ 174,765 ($ 364,898) $ 339,950
========== ========= =========== =========
Weighted average number of
shares outstanding 2,545,729 1,944,291 2,245,570 1,944,291
========== ========= =========== =========
Net income per common
share outstanding ($ 0.062) $ 0.090 ($ 0.162) $ 0.175
========== ========= =========== =========
</TABLE>
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LUCOR, INC AND SUBSIDIARIES
CASH FLOW STATEMENT
Three months ended
30-Jun-96 30-Jun-95
__________ __________
Net cash provided by (used in)
operating activities $1,943,730 ($ 237,948)
__________ __________
Cash flow from investing activities:
Purchase of property and equipment (3,012,335) ( 563,912)
Increase in construction in progress (3,112,780) (1,914,486)
Acquisition of additional service
centers (1,798,191) 0
Franchise fees, goodwill, etc. 51,587 ( 42,779)
__________ __________
Net cash provided used in investing
activities (7,871,719) (2,521,177)
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayments of debt ( 169,290) ( 202,411)
Proceeds from borrowings 3,608,389 2,000,000
Pennzoil preferred share dividend ( 70,000) 0
Proceeds from issuance of common stock 5,590,313 0
___________ ___________
Cash provided by (used in)
financing activities 8,959,412 1,797,589
___________ ___________
Increase (decrease) in cash 3,031,423 ( 961,536)
Cash at beginning of period 2,344,484 2,012,915
___________ ___________
Cash at end of period $5,375,907 $ 1,051,379
=========== ===========
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LUCOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company
Lucor, Inc. and its subsidiaries have license agreements with Jiffy
Lube International, Inc. ("JLI") to operate Jiffy Lube service centers in
the Raleigh-Durham Area of Dominant Influence (ADI), and the ADI's of
Cincinnati, Ohio (including northern Kentucky) Pittsburgh, Pennsylvania,
Dayton, Ohio, Toledo, Ohio, Lansing, Michigan, and Nashville, Tennessee.
These service centers provide rapid lubrication, oil changes and related
services for automobiles, light duty trucks and other vehicles. As of June
30, 1996 the Company had 76 centers in operation; as of December 31, 1995,
60 centers were in operation; and as of June 30, 1995 had 45 centers in
operation.
The financial information as of June 30, 1995 and June 30, 1996
included herein is unaudited. However, such information reflects all
adjustments, consisting of only normal recurring adjustments, which are, in
the opinion of Management, necessary for a fair presentation of the results
for the interim periods. Financial statement information as of December
31, 1995 has been extracted from audited financial statements. All of the
above financial information should be read in conjunction with the
Company's annual audited financial statements (and notes thereto) included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1995.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six months ended June 30, 1996 compared with June 30, 1995.
The Company increased its number of stores in operation from 45 stores
to 76 stores. Accordingly, consolidated net sales for the first six months
rose 44%. During the first half of 1996, 477,891 full service sales were
performed versus 336,789 in the same period of 1995. Cars serviced per day
per service center averaged 41 cars versus 47 cars during 1995. This is
due the impact of the 31 new stores, which traditionally have lower car
counts in the early stages of operation, opening since June 1995. Net
revenue per car serviced increased from $35.68 to $36.22. Increases in the
net revenue per store have occurred in all of our ADI's except Cincinnati.
The Cincinnati ADI was expected to see a slight decrease due to the loss of
revenue associated with the state inspection which was taken over by the
state of Ohio as of the first of the year. Management attributes the
increase in net revenue per store to the maturation of the stores within
the markets and to the additional services provided to our customers. The
Company has added a complete automatic transmission fluid replacement
service and tire rotations at all of its locations. These services, when
purchased in conjunction with a full service oil change, increase the net
revenue per car. Cost of sales decreased slightly as a percent of sales
from 24.3% to 23.8% for the first six months ended June 30, 1995 versus
June 30, 1996. Direct costs increased faster than net sales for the six
months due to higher labor costs in the Raleigh-Durham ADI (an area of low
unemployment) and a change in the sales mix for services such as tire
rotations and automatic transmission services which have a lower cost of
sales but are more labor intensive. Operating costs increased less rapidly
than sales during the period due to the effect of relatively fixed rental
and similar costs in this category. Depreciation charges increased for the
period reflecting the Company's increased capital investment for store
improvements and new store development.
Selling, general and administrative expenses increased 72% over the
comparable six month period of 1995. This increase was due for the most
part to an overall increase in the number of management personnel hired by
the Company to handle its expansion. In addition, at the end of April the
Company moved its accounting operations from Boca Raton, Florida to
Raleigh, North Carolina. During the transition, duplicate payroll and
associated costs were incurred to facilitate the training of the new
personnel. The cost of running the Raleigh operation through April was
$64,000. The duplicate cost were reflected in the financial statements.
Other income increased primarily due to a $47,942 gain on the sale of the
Company's former office and added interest income from invested cash.
Interest expense increased reflecting the higher level of borrowing to
support the Company's capital expenditure program. Provision for income
taxes was negative reflecting the negative taxable income. A $70,000
dividend on the Company's redeemable preferred stock was recorded.
Common stock shareholder equity increased by $5,590,313 reflecting the
issuance of unregistered Class A Common Stock as follows:
1. As part of the acquisition of the assets of Quick Lube, Inc., 39,000
shares were issued at a value of $250,000.
2. A private placement of 55,000 shares to Jerry B. Conway and D. Fredrico
Fazio (directors of the Company) resulted in an increase of $343,750 in
common stock shareholder equity.
3. In May, 1996, the Company issued 759,477 shares to Pennzoil Products
Company, Inc. for cash totaling $5,000,000.
4. The remaining small difference is due to the repurchase of a small
number of shares from employees displaced by the accounting department
transfer.
Liquidity and capital resources:
Working capital has increased by $3,080,251 since the end of 1995.
This increase was due primarily to the investment in the Company as
outlined above offset by expenditures associated with the opening of 16
stores since the beginning of the year and 30 new stores under development
or in the planning stages. In conjunction with this expansion, new long
term debt of $3,608,389 was added under the existing credit facility with
Citicorp Leasing, Inc.
The investment by Pennzoil Products Company, Inc. combined with the
remaining line of credit under the existing credit facility with Citicorp
Leasing, Inc. is expected to provide the capital required to sustain our
current development schedule. It is management's belief that opportunities
for additional expansion are available and the Company has plans to place
additional long term debt and equity to fund such growth and to increase
working capital, however, no assurance can be given that the Company will
be able to obtain such financing.
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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
The annual meeting of Lucor, Inc. was held on May 14, 1996. At that
meeting the following directors were re-elected with the indicated number
of shares voted in favor:
Stephen P. Conway 1,767,515
Jerry B. Conway 1,767,525
Anthony J. Beisler III 1,767,525
D. Fredrico Fazio 1,767,525
Item 5. Other Information: None
Item 6. Exhibits and Reports on Form 8-K: None
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities indicated on the 14th day of August 1996.
LUCOR, INC.
________________________
Stephen P. Conway
Chairman, Chief Executive Officer,
and Director
________________________
Kendall A. Carr
Chief Financial Officer
