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, 2000
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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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 (I.R.S. Employer
of incorporation or organization) Identification No.)
5342 Old Floyd Road, P.O. ox 635, Mableton, Georgia 30126
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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,
2000: 18,364 shares of Common Stock, no par value.
Transitional Small Business Disclosure Format (check one)
Yes / / No /X/
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
Efficiency Lodge, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS
March 31, 2000 December 31, 1999
------------------ -----------------
(Unaudited)
<S> <C> <C>
Property and Equipment, net $25,418,412 $25,658,617
Cash 413,842 237,091
Other Assets 1,515,010 1,567,053
----------------- ----------------
$27,347,264 $27,462,761
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Mortgage Notes Payable $27,560,952 $27,703,427
Other Liabilities 572,733 722,950
----------------- ----------------
Total Liabilities 28,133,685 28,426,377
STOCKHOLDERS' EQUITY
Common Stock - no par, 250,000 shares
authorized; 34,790 shares issued;
18,364 outstanding 159,613 159,613
Accumulated Earnings 974,301 797,105
Other Comprehensive Earnings (52,427) (52,427)
----------------- ----------------
1,081,487 904,291
Less 16,426 shares of common stock
in treasury at cost (1,867,907) (1,867,907)
----------------- ----------------
(786,421) (963,616)
----------------- ----------------
$27,347,264 $27,462,761
================= ================
</TABLE>
<PAGE>
Efficiency Lodge, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
Three Months Ended March 31, 2000
<TABLE>
<CAPTION>
Accumulated
Common Stock Other
--------------------------- Retained Comprehensive Treasury
Shares Dollars Earnings Loss Stock Total
----------- ------------- ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 18,364 $159,613 $797,105 ($52,427) ($1,867,907) ($963,616)
Net Income for the Three Months - - 177,196 - - 177,196
------------
Comprehensive earnings 177,196
----------- ------------- ------------ --------------- ------------- ------------
Balance at March 31, 2000 18,364 $159,613 $974,301 ($52,427) ($1,867,907) ($786,421)
=========== ============= ============ =============== ============= ============
</TABLE>
<PAGE>
Efficiency Lodge, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
For the Three Months Ended March 31, 2000 and 1999
Three Months Ended
March 31,
2000 1999
------------- -------------
Revenues $2,022,090 $1,555,758
Operating expenses 1,134,726 755,971
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Operating profit 887,364 799,787
Other Expense, net 600,168 229,325
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Net earnings before income taxes 287,196 570,462
Provision for income taxes 110,000 201,411
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Net earnings $177,196 $369,051
============= =============
Earnings per common share - basic $9.65 $19.33
============= =============
Weighted average number of common
shares outstanding 18,364 19,097
============= =============
<PAGE>
Efficiency Lodge, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Increase (Decrease) in Cash
Cash flows from operating activities:
Net earnings $177,196 $369,051
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 285,406 186,364
Changes in assets and liabilities:
Other assets 37,046 (398,674)
Other liabilities (113,328) 418,566
----------- ------------
Net cash provided by operating activities 386,320 575,307
Cash flows from investing activities:
Purchase of property and equiptment (30,300) (992,594)
----------- ------------
Net cash used by investing activities (30,300) (992,594)
Cash flows from financing activities:
Payments for repurchase of common stock (36,794) -
Payments made on notes payable (142,475) (56,395)
Proceeds from notes payable - 500,000
----------- ------------
Net cash (used in) provided by financing activities (179,269) 443,605
----------- ------------
Net increase in cash 176,751 26,318
Cash at beginning of period 237,091 921,220
----------- ------------
Cash at end of period $413,842 $947,538
=========== ============
Supplemental cash flow information
Cash paid during the period for interest $608,565 $254,850
=========== ============
</TABLE>
<PAGE>
Efficiency Lodge, Inc. and Subsidiaries
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Three Months Ended March 31, 2000 and 1999
NOTE A -- BASIS OF PREPARATION
The accompanying unaudited interim consolidated financial statements of
Efficiency Lodge, Inc. and Subsidiaries (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, 2000 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 1999 consolidated financial statements
and related notes.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
Total assets decreased during the first quarter from $27,462,761 on
December 31, 1999 to $27,347,264 on March 31, 2000. This decrease is primarily
due to depreciation expense for the period. Total liabilities decreased during
the first quarter from $28,426,377 on December 31, 1999 to $28,133,685 on March
31, 2000 due to income taxes, which were paid in the first quarter of 2000 and
due to mortgage principal payments.
Revenue increased during the first quarter from $1,555,758 in the first
quarter of 1999 to $2,022,090 in 2000. This increase is due to the revenue
generated by the new properties acquired since March of 1999. Since the first
quarter of 1999, the Company has acquired two lodges, 53 single-family
residences, four duplex residential properties and one commercial property,
which is occupied by a convenience store and an automobile repair shop.
Operating expenses increased in the first quarter from $755,971 in 1999
to $1,134,726 in 2000. An increase in depreciation expense and personnel cost
account for the majority of the increase. These expenses increased due to the
new properties acquired since the first quarter 1999. Other expenses net of
other income also increased from $229,325 in 1999 to $600,168 in 2000. This
increase is primarily due to the increase in interest expense in the first
quarter 2000. Interest expense increased in 2000 because of the debt on the
properties acquired since first quarter of 1999.
<PAGE>
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
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27 Financial Data Schedule - (for SEC use only)
(b) Reports on Form 8-K
None.
<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 8, 2000 By: /s/ W. Ray Barnes
----------------------------------------
W. Ray Barnes
President and Chief Executive Officer
DATE: May 8, 2000 By: /s/ Bonnie J. Byers
----------------------------------------
Bonnie Byers
Secretary/Treasurer
<PAGE>
EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule (for SEC use only)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 413,842
<SECURITIES> 0
<RECEIVABLES> 547,072
<ALLOWANCES> 0
<INVENTORY> 55,862
<CURRENT-ASSETS> 0
<PP&E> 29,973,035
<DEPRECIATION> 4,554,623
<TOTAL-ASSETS> 27,347,264
<CURRENT-LIABILITIES> 0
<BONDS> 27,560,952
0
0
<COMMON> 159,613
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 27,347,264
<SALES> 0
<TOTAL-REVENUES> 2,022,090
<CGS> 0
<TOTAL-COSTS> 1,134,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 608,565
<INCOME-PRETAX> 287,196
<INCOME-TAX> 110,000
<INCOME-CONTINUING> 177,196
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 177,196
<EPS-BASIC> 9.65
<EPS-DILUTED> 9.65
</TABLE>
