EFFICIENCY LODGE, INC. FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission File Number 000-02290
EFFICIENCY LODGE, INC.
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(Exact name of small business issuer as specified in its charter)
Georgia 58-0898219
- --------------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5342 Old Floyd Road, P.O. Box 635, Mableton, Georgia 30059
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(Address of principal executive offices)
(770) 819-0039
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past
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 / /
Shares outstanding of each of the issuer's classes of common equity at
March 31, 1999: 572,918 shares of Common Stock, $0.64 per value share.
Transitional Small Business Disclosure Format (check one)
Yes / / No /X/
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EFFICIENCY LODGE, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998
(Unaudited)
--------------- -----------------
<S> <C> <C>
Property and Equipment, net $ 15,596,423 $ 15,121,958
Cash 947,539 921,220
Other Assets 2,215,553 1,485,114
----------- -----------
$ 18,759,515 $ 17,528,292
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage Notes Payable $ 19,027,057 $ 18,584,016
Other Liabilities 674,836 255,705
----------- -----------
Total Liabilities 19,701,893 18,839,721
Stockholders' Equity
Common Stock 104,368 104,368
Additional Paid-In Capital 52,674 52,674
Accumulated Earnings 548,257 179,206
Treasury Stock (1,647,677) (1,647,677)
----------- -----------
Total Stockholders' Equity (942,378) (1,311,429)
----------- -----------
$ 18,759,515 $ 17,528,292
=========== ===========
</TABLE>
See accompaning notes to interim consolidated financial statements.<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Efficiency Lodge, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended March 31, 1999 and 1998
Three Months Ended
March 31,
----------------------------------
1999 1998
---------- -----------
<S> <C> <C>
Revenues $ 1,555,758 $ 1,194,198
Operating Expenses 755,971 653,259
----------- -----------
Operating Income 799,787 540,939
Other (Income) Expense, net 229,325 299,144
----------- -----------
Earnings (Loss) before Income Taxes 570,462 241,795
Provision for Income Taxes 201,411 52,117
----------- -----------
Net Earnings (Loss) $ 369,051 $ 189,678
=========== ===========
Net Earnings (Loss) per common share $ 0.64 $ 0.18
=========== ===========
Weighted Average Number of Common
Shares Outstanding 572,918 1,043,683
=========== ===========
</TABLE>
See accompaning notes to interim consolidated financial statements.<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Efficiency Lodge, Inc.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Three Months Ended March 31, 1999
Additional
Common Paid-In Accumulated Treasury
Stock Capital Earnings Stock Total
-------- ------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $104,368 $52,674 $179,206 ($1,647,677) ($1,311,429)
Net Income for the Three Months 369,051 369,051
-------- ------- -------- ----------- -----------
Balance at March 31, 1999 $104,368 $52,674 $548,257 ($1,647,677) ($942,378)
======== ======= ======== =========== ===========
</TABLE>
See accompaning notes to interim consolidated financial statements.<PAGE>
<PAGE>
EFFICIENCY LODGE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
1999 1998
------------- ---------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings (Loss) $ 369,051 $ 605,553
Adjustments to Reconcile Net Earnings (Loss)
to Net Cash Provided by Operating
Activities:
Depreciation and Amortization 186,364 381,886
Changes in Assets and Liabilities:
Other Assets (398,674) (160,008)
Other Liabilities 418,566 330,284
---------- -----------
Net Cash Provided by Operating Activities 575,307 1,157,715
---------- -----------
Cash Flows from Investing Activities:
Capital Expenditures (992,594) (5,963,056)
---------- -----------
Net Cash Used by Investing Activities (992,594) (5,963,056)
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Cash Flows from Financing Activities:
Principal Payments on Long-Term Debt (56,395) (5,064,880)
Proceeds from Issuance of Debt 500,000 10,460,000
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Net Cash Provided (Used) by Financing Activities 443,605 5,395,120
---------- -----------
Increase (Decrease) in Cash and Cash Equivalents 26,318 589,779
Cash and Cash Equivalents, beginning of period 921,220 169,246
---------- -----------
Cash and Cash Equivalents, end of period $ 947,539 $ 759,025
========== ===========
Cash Paid during the Period for Interest $ 254,850 $ 931,180
========== ===========
</TABLE>
See accompaning notes to interim consolidated financial statements.<PAGE>
<PAGE>
Efficiency Lodge, Inc.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Three Months Ended March 31, 1999
NOTE A - BASIS OF PREPARATION
The accompanying unaudited interim consolidated financial statements
of Efficiency Lodge, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial statements and with the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
The results of operations for the quarter ended March 31, 1999 are not
necessarily indicative of the results that may be expected for the full
year. The interim consolidated financial statements should be read in
conjunction with the Company's 1998 consolidated financial statements
and related notes.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
Total assets increased during the first quarter from $17,528,292 on
December 31, 1998 to $18,759,515 on March 31, 1999. This increase is
primarily the result of the purchase of a lodge in March 1999.
Revenue increased during the first quarter from $1,194,198 in 1998 to
$1,555,758 in 1999. This increase can be attributed to the addition of
three lodges. Two lodges began operation during the third quarter of 1998.
One lodge is located in Kennesaw, Georgia (Town Center Lodge) and the other
is located in Columbus, Georgia. The third lodge located in Louisville,
Georgia had operations for the last half of March 1999.
Operating expenses increased in the first quarter from $653,259 in 1998
to $755,971 in 1999. This increase is primarily attributable to the one
time start up expenses of the three new lodges. Operating income increased
from $540,939 in 1998 to $799,787 for the same period in 1999. Other
expenses decreased from $299,144 in the first quarter of 1998 to $229,325 in
1999 wihch was primarily attributable to the refinancing of five lodges.
Earnings before taxes were $570,462 for the first quarter of 1999 compared
to $241,795 during the same period in 1998. Net earnings were $369,051 for
the first quarter of 1999 compared to $189,678 in the first quarter of 1998.
The Company continued a favorable trend in occupancy and revenue for the
quarter.
The Company purchased an existing motel in Louisville, Georgia on March
11, 1999 for a total purchase price of nine hundred seventy-five thousand
dollars ($975,000). The Company paid $475,000 in cash and obtained a
$500,000 loan from Georgia State Bank.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following Exhibits are filed as part of this report:
Exhibit
Number Description
------- -----------
27 Financial Data Schedule - (for SEC use only)
(b) Reports on Form 8-K
None.
<PAGE>
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
EFFICIENCY LODGE, INC.
DATE: May 12, 1999 By: /s/ W. Ray Barnes
-------------------------------------
W. Ray Barnes
President and Chief Executive Officer
DATE: May 12, 1999 By: /s/ Bonnie Byers
-------------------------------------
Bonnie Byers
Secretary/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000092066
<NAME> EFFICIENCY LODGE INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 947,539
<SECURITIES> 0
<RECEIVABLES> 620,604
<ALLOWANCES> 0
<INVENTORY> 60,021
<CURRENT-ASSETS> 0
<PP&E> 19,234,287
<DEPRECIATION> 3,637,864
<TOTAL-ASSETS> 18,759,515
<CURRENT-LIABILITIES> 0
<BONDS> 19,027,057
0
0
<COMMON> 104,368
<OTHER-SE> 52,674
<TOTAL-LIABILITY-AND-EQUITY> 18,759,515
<SALES> 0
<TOTAL-REVENUES> 1,555,758
<CGS> 0
<TOTAL-COSTS> 755,971
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 229,325
<INCOME-PRETAX> 570,462
<INCOME-TAX> 201,411
<INCOME-CONTINUING> 369,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 369,051
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
</TABLE>
