Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISISSION
Washington, D.C. 20549
FORM 10-K
{X}ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended June 30, 2011
{ }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 0-1937
OAKRIDGE HOLDINGS, INC.
(Name of small business issuer as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation or organization)
41-0843268
(I.R.S. Employer Identification No.)
400 West Ontario Street
Unit 1003
Chicago, IL 60654
(Address of principal executive offices)(Zip code)
(312) 505-9267
(Issuer's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Exchange Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, Par Value $.10 per share
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes { } No {X}
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes { } No {X}
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act 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 { }
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T
(section 232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post
such files.) { }Yes { }No
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-K contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to the Form 10-K. { }
Indicate by check mark, whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ___ Accelerated filer ___
Non-accelerated filer ___ Smaller reporting company _X_
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes{ } No{X}
The aggregate market value of the issuer's voting and non-voting common
equity held by non-affiliates as of the last business day of the
registrant's most recently completed second fiscal quarter was
approximately $787,327.
The number of shares outstanding of Registrant's common stock on
October 12, 2011, was 1,431,503.
Documents Incorporated by Reference: The information set forth in Part III
of this Report is incorporated by reference to the Registrant's definitive
proxy statement for the 2011 annual meeting of stockholders, which will be
filed no later than 120 days after June 30, 2011.
TABLE OF CONTENTS
Part I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. [Removed and Reserved]
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management Discussion and Analysis of Financial Condition and
Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director
Independence
Item 14. Principal Accountant Fees and Services
Item 15. Exhibits and Financial Statement Schedules
CAUTIONARY STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Form 10-K contains certain forward-looking statements. Forward-
looking statements do not relate strictly to historical or current facts,
but rather give our current expectations or forecasts of future events.
Forward-looking statements may be identified by their use of words such as
"plans," "expects," "may," "will," "anticipates," "believes" and other
words of similar meaning. Forward-looking statements may address, among
other things, the Company's strategy for growth, product development,
regulatory changes, the outcome of contingencies (such as legal
proceedings), market position, expenditures and financial results.
Forward-looking statements are based on current expectations of future
events. Forward-looking statements involve risks and uncertainties, and
actual results could differ materially from those discussed. Among the
factors that could cause actual results to differ materially from those
projected in any forward-looking statement are as follows: the effect
of business and economic conditions; the impact of competitive products
and continued pressure on prices realized by the Company for its
products; constraints on supplies of raw materials used in manufacturing
certain of the Company's products or services provided; capacity
constraints limiting the production of certain products; changes in
anticipated operating results, credit availability, equity market
conditions or the Company's debt levels may further enhance or inhibit
the Company's ability to maintain or raise appropriate levels of cash;
requirements for unseen maintenance, repairs or capital asset
acquisitions; difficulties or delays in the development, production,
testing and marketing of products; market acceptance issues, including
the failure of products to generate anticipated sales levels; difficulties
in manufacturing process and in realizing related cost savings and other
benefits; the effects of changes in trade, monetary and fiscal policies,
laws and regulations; foreign exchange rates and fluctuations in those
rates; the costs and effects of legal and administrative proceedings,
including environmental proceedings; and the risk factors reported from
time to time in the Company's SEC reports. The Company undertakes no
obligation to update any forward-looking statement as a result of future
events or developments.
PART I
ITEM 1. BUSINESS
GENERAL
Oakridge Holdings, inc. and its subsidiaries, collectively, are called the
"Company" or "Oakridge," and all references to "our," "us" and "we" refer
to Oakridge Holdings, Inc. and its subsidiaries, collectively, unless the
context otherwise requires. The Company has two business segments -
cemeteries and aviation ground support equipment.
The Company was incorporated as a Minnesota corporation in 1961 and began
operations on March 6, 1961, with two cemeteries in Cook County, Illinois,
selling cemetery property, merchandise and service. Cemetery property
includes lots, lawn crypts, and family and community mausoleums. Cemetery
merchandise includes vaults, monuments and markers. Cemetery services
include burial site openings and closings and inscriptions.
The Cemeteries that we operate are located outside of Chicago, Illinois.
We believe this area has a significant population over age 50, which
represents a principal target market for our pre-need sales program as
well as at-need sales.
We believe the sale of cemetery property to a family creates a relationship
that builds heritage over time, as family members are buried in a plot or
mausoleum and as other family members purchase additional cemetery property
in order to be buried in the same cemetery.
On June 29, 1998, the Company acquired substantially all of the assets of
Stinar Corporation, a Minnesota corporation. Stinar Corporation has been
in business for 64 years and is an established international manufacturer,
and its products are used by the airline support equipment industry.
Stinar is a global manufacturer of ground support equipment for the aviation
industry which is used for servicing, loading, and maintaining all types of
aircraft for both commercial and government aviation companies and airports.
These products are sold and marketed through our technically oriented sales
staff as well as through independent distributors and sales representatives.
Approximately 70% of Stinar's revenues in the year ended June 30, 2011 were
generated by contracts with the U.S. military, 11% were generated
internationally and 19% were generated in the United States from
non-governmental sales.
All references to years are to fiscal years ended June 30 unless otherwise
stated.
CEMETERY OPERATIONS OVERVIEW
Through two wholly owned subsidiaries, Oakridge Cemetery (Hillside), Inc. and
Glen Oak Cemetery, Inc., the Company operates two adjacent cemeteries in
Hillside, Illinois. The cemetery operations are discussed on a consolidated
basis, and the Company makes no functional distinction between the two
cemeteries, except where noted.
Together the cemeteries comprise 176.7 total acres of real estate, of which
12.8 acres are used for interior roads and other improvements. The remaining
163.9 acres contain 137,000 burial plots, of which 27,208 are in inventory,
with 975 niches and 3,190 crypts, of which 118 niches and 313 crypts were in
inventory. The Company estimates that it has an inventory of cemetery and
mausoleum spaces representing between a 35 and 40 year supply, based on the
maintenance of current sales and annual usage levels. This inventory is
considered adequate for the foreseeable future, and the Company is presently
developing a plan of adding more niches and crypts in the future. In addition
to providing interment services, burial plots and crypts, the Company sells
cremation services and has a chapel in the mausoleum.
CEMETERY INDUSTRY
Cemetery companies provide products and services to families in two principal
areas: (i) disposition of remains, either through burial or cremation; and
(ii) memorialization, generally through monuments, markers or inscriptions. The
cemetery industry in the United States is characterized by the following
fundamental attributes:
OVERVIEW: The United States death care industry is estimated to have
generated approximately $12 billion of revenue according to the Senate Special
Committee on Aging hearing in 2000. During most of the 1990's, there was a
trend of family-owned businesses consolidating with larger organizations.
However, this trend slowed in the late 1990's and the industry continues to be
characterized by a larger number of locally-owned, independent operations.
There are approximately 115,000 cemeteries, 1,155 crematories and 300 casket
stores (neither funeral homes or cemeteries in the United States. The market
share of a single cemetery in any community is a function of the name,
reputation, and location of the cemetery, although competitive pricing,
professional service and attention, and well-maintained grounds are important.
It is estimated that there are approximately 1,000 combination funeral
home/cemetery operations in the death care industry. The projected increase in
national death rates, although slowed by better health care and increased life
expectancies, has been a factor in an increased interest in the death care
industry by investors, large chains, and third-party sellers.
HERITAGE AND TRADITION. Cemetery businesses have traditionally been
transferred to successive generations within a family and in most cases have
developed a local heritage and tradition that afford an established cemetery a
local franchise and provide the opportunity for repeat business. In addition,
an established firm's backlog of pre-need cemetery and mausoleum spaces
provides a base of future revenue. In many cases, personnel who have left
public companies start these new independent businesses or family-owned
businesses. Often, such businesses are attempting to build market share by
competing on price rather than heritage and tradition.
NEED FOR PRODUCTS AND SERVICES; INCREASING NUMBER OF DEATHS. There is an
inevitable need for our products and services. Although the number of deaths in
the United States will reflect short-term fluctuations, deaths in the United
States are expected to increase at a steady pace over the long term as the baby
boom generation becomes older. According to the United States Bureau of the
Census, the number of deaths in the United States is expected to increase from
approximately 2.4 million in 2004 to 3.2 million in 2025. Moreover, the average
age of the population in the United States is increasing. According to the
United States Bureau of the Census, the United States population 50 years of
age or older is expected to increase from 76.1 million in 2000 to 97.1 million
in 2010. The Company believes that the aging of the population is particularly
important because it expands the Company's target market for pre-need services
and merchandise as older persons, especially those over 50 years of age, are
most likely to make pre-need cemetery arrangements.
PRE-NEED MARKETING. In addition to sales at the time of death, or on an
"at-need" basis, death care products and services are being sold prior to the
time of death, or on a "pre-need" basis. We are actively marketing pre-need
products and services, which provide a backlog of future services.
DEMAND FOR CREMATION. In recent years, there has been a steady growth in the
number of families in the United States that have chosen cremation as an
alternative to traditional methods of burial. According to industry studies,
cremations represent approximately 6% in 1975, 9% in 1980, 14.90% in 1985,
19.20 in 1995, 26.24% in 2000, 39.84 was projected in 2010 and 48.75% is
projected in 2025 according to the National Funeral Directors and Cremation
Association of North America. The trend toward cremations has been a
significant concern because cremations have typically included few, if any,
additional products and services other than cremation itself. In addition,
almost all funeral homes in the Chicago area now provide basic cremation
services and they provide a full range of merchandise and services to families
choosing cremation.
IMPORTANCE OF TRADITION; BARRIERS TO ENTRY. We believe it is difficult for new
competitors to enter existing markets successfully by opening new cemeteries.
Entry into the cemetery market can be difficult due to several factors. Because
families tend to return to the same cemetery for multiple generations to bury
family members, it is difficult for new cemeteries to attract families. In
addition, mature markets, including the metropolitan area where our cemeteries
are located, are served by an adequate number of existing cemeteries with
sufficient land for additional plots, whereas land for new cemetery development
is often scarce and expensive. Regulatory complexities and zoning restrictions
also make entry into the cemetery market difficult. Also, development of a new
cemetery usually requires a significant capital investment that takes several
years to produce a return.
RISKS RELATED TO THE CEMETERY BUSINESS. To compete successfully, the Company
must maintain a good reputation and high professional standards in the industry
as well as offer attractive products and services at competitive prices. In
addition, the Company must market itself in such a manner as to distinguish
itself from its competitors. Cemeteries have historically experienced price
competition from independent and large public company cemeteries, monument
dealers, and other non-traditional companies providing death care services and
products. The intense competition the Company faces may, at some time in the
future, require the Company to reduce prices (and thereby its profit margins)
to retain or recapture market share. If the Company is unable to successfully
compete, its financial condition, results of operations and cash flows could be
materially and adversely affected.
The Company's investments held in trust are invested in securities, which could
be affected by financial market conditions that are beyond its control.
The Company's revenue is impacted by the land trusts' net realized interest
income, which the Company recognizes to the extent of allowed reimbursement
received monthly, which is used to perform cemetery maintenance services. The
level of trust income is largely dependent on yields on trust investments made
with trust funds, which are subject to financial market conditions and other
factors that are beyond the Company's control. Trust earnings are also affected
by the mix of fixed income and equity securities the trustee chooses to
maintain in the trust funds, and the trustee may not choose the optimal mix for
any particular market condition. If earnings from the trust decline, the
Company would likely experience a decline in future revenue and cash flow. In
addition, if the trust funds experienced significant investment losses, there
would likely be insufficient funds in the trusts to cover costs of delivering
services and merchandise or maintain the grounds of the cemeteries in the
future. The Company would have to cover any such shortfalls with cash flow from
operations, which could adversely affect its ability to service debt.
The level of pre-need sales is dependent upon the size and experience of the
Company's sales force. The Company cannot assure that it will continue to be
successful in recruiting and retaining qualified sales personnel. In addition,
depending on the terms of the contract, pre-need sales have the potential to
have an initial negative impact on cash flows because of commissions paid on
the sales and the portion of the sales proceeds required to be placed into the
trust. A weakening economy that causes customer families to have less
discretionary income could cause a decline in pre-need sales.
Declines in the number of deaths in the Chicago market can cause a decrease in
revenues. Changes in the number of deaths are not predictable from one month to
the next or over a short term.
The costs of operating and maintaining the Company's facilities, land and
equipment, regardless of the number of interments performed, are fixed. Because
the Company cannot necessarily decrease the costs when it experiences lower
sales volumes, a decline in sales may cause gross margins, profits and cash
flows to decline at a greater rate than a decline in revenue.
STINAR OPERATIONS OVERVIEW
Stinar provides products and services to the aviation industry in three
principal areas: (i) sales of new equipment manufactured for maintaining,
servicing and loading of airplanes; (ii) sales of parts for equipment sold in
the past; and (iii) repair of equipment.
Principal products of Stinar include the following:
Truck-mounted stairways and push stairs for loading aircraft; lavatory trucks
and carts, water trucks, bobtails, and catering trucks for servicing aircraft;
cabin cleaning trucks, maintenance hi-lifts, and turbo oilers for maintaining
aircraft; and other custom built aviation ground support equipment used by
airports, airlines and the military. Stinar also provides service and repairs
on other vendors' equipment and equipment it has sold.
Stinar sells its products to airports, airlines, and government and military
customers in the United States. In 2011, non-governmental domestic sales
comprise approximately 19%, government and military sales approximately 70%,
and international sales approximately 11% of Stinar's annual revenues.
The Company purchases carbon steel, stainless steel, aluminum and chassis
domestically. We do not use single-source suppliers for the majority of our
raw material purchases and believe supplies of raw material available in the
market are adequate to meet our needs.
We historically have engaged in research and development activities directed
primarily toward the improvement of existing products, the design of
specialized products to meet specific customer needs, and the development of
new products and processes. A large part of our product development spending
in the past has focused on the new product lines in the stairs department.
AVIATION GROUND SUPPORT INDUSTRY
GOVERNMENT CONTRACTS
Contracts with the U.S. government are subject to special laws and
regulations, noncompliance with which could result in various sanctions.
The aviation ground support industry internationally is characterized by
the following fundamental attributes:
HIGHLY FRAGMENTED OWNERSHIP. A significant majority of aviation ground support
equipment manufacturers consist of family-owned businesses. Management
estimates that there are approximately 20 companies in the world that
manufacture one or two products for the industry. Also, as a support industry,
ground support equipment has few market drivers of its own. That is, the major
determinants of ground support equipment market activity are to be found in the
commercial aviation industry. Under these conditions, many suppliers have
in-depth knowledge only of their own market niches, and end-users may have
difficulty finding a supplier with the right mix of products and services to
fit their needs.
SIZE AND GROWTH TRENDS. The aviation ground support industry appears to be
taking on the characteristics of a shrinking and declining industry over the
next couple of years. Given the weakness of the four main indicators (aircraft
movements, aircraft delivery rates, price of fuel and airport
construction/capacity improvement) of the industry's health, as well as the
continuing decline in markets for import and export, the world market for
purchases of new aviation ground support equipment is expected to decline
drastically due to most airlines downsizing operations and many large domestic
carriers having filed for bankruptcy protection.
BARRIERS TO ENTRY. It is relatively difficult for new competitors to enter the
field due to (i) high start-up costs, which effectively protect against small
competitors entering the field, (ii) substantial expertise required with regard
to manufacturing and engineering difficulties, which makes it difficult to have
the knowledge to compete, and (iii) market saturation, which reduces the
possibility of competitors gaining a meaningful foothold and network of
manufacturing representatives. Moreover, airline companies are becoming
increasingly selective about which companies they will allow to provide ground
support equipment. Most airlines only purchase from vendors who have a history
in the industry.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The following table summarizes the assets, revenues and operating profit or
loss attributable to the Company's two industry segments for the date and
periods indicated. The term "operating profit (loss)" represents revenues less
all operating expenses. Management evaluates the performance of the Company's
business segments and allocates resources to them based on operating profit or
loss. Operating expenses of a business segment do not include corporate
interest expense, corporate income or expense, or taxes on income.
For the fiscal years ended June 30, 2011 2010
Revenues:
(1) Aviation $13,246,884 $10,728,752
(2) Cemetery $3,252,807 $3,405,276
Operating profit:
(1) Aviation $351,112 $449,785
(2) Cemetery $377,914 $517,987
Identifiable assets:
(1) Aviation $11,373,908 $10,527,945
(2) Cemetery $13,794,977 $13,229,128
REGULATION
CEMETERY OPERATIONS
The Company is regulated primarily on a state level, with the state requiring
licensing for cremations. The states regulate the sale of pre-need services and
the administration of any resulting trusts. The laws are complex, are subject
to interpretations by regulators, and are subject to change from time to time.
Non-compliance with these regulations can result in fines or suspension of
licenses required to sell pre-need services and merchandise.
The Company's operation must comply with federal legislation, including the
laws administrated by the Occupational Safety and Health Administration, the
Americans with Disabilities Act and the Federal Trade Commission ("FTC")
regulations.
The Company's operations are subject to numerous environmental laws,
regulations and guidelines adopted by various governmental authorities.
The Company believes that it complies in all material respects with the
provisions of the laws and regulations under which it operates. There are no
material regulatory actions pending.
STINAR OPERATIONS
Stinar is required to comply with competitive bidding and other requirements in
cases where it sells to local, state, or federal governmental customers. The
costs and effects of complying with these requirements do not have a material
impact on the financial results of the Company.
BOTH COMPANIES
The Company holds all governmental licenses necessary to carry on its business,
and all such licenses are current. Both segments are subject to the
requirements of the federal Occupational Safety and Health Act ("OSHA") and
comparable state statutes. The OSHA hazard communication standard, the Unites
States Environmental Protection Agency community right-to-know regulations
under Title III of the federal Superfund Amendment and Reauthorization Act, and
similar state statutes require us to organize information about hazardous
materials used or produced in our operations. Certain portions of this
information must be provided to employees, state and local governmental
authorities, and local citizens.
COMPLIANCE WITH ENVIRONMENTAL LAWS
CEMETERY OPERATIONS. The Company's operations are subject to numerous
environmental laws, regulations and guidelines adopted by various governmental
authorities in the state of Illinois and Cook County. On a continuing basis,
management business practices are designed to assess and evaluate
environmental risks and, when necessary, conduct appropriate corrective
measures. Liabilities are recorded when known or considered probable and
reasonably estimable.
The Company provides for environmental liabilities using its best estimates,
but actual environmental liabilities could differ significantly from these
estimates.
STINAR CORPORATION. Stinar owns a 43,271 square foot manufacturing facility
located on approximately 7.875 acres of land (the "Stinar Facility") in an
industrial park in Eagan, Minnesota, a suburb of St. Paul, Minnesota. Prior to
the acquisition of the Stinar Facility, Stinar and the Company obtained a
Phase I environmental assessment of the Stinar Facility. This Phase I
environmental assessment suggested the need for additional study of the Stinar
Facility. In addition, the Phase I assessment suggested that certain structural
improvements be made to the Stinar Facility. Accordingly, two additional Phase
II environmental assessments were performed and revealed the presence of
certain contaminants in the soil around and under the building located on the
Stinar facility.
Subsequent to the completion of the Phase II environmental assessments and
completion of the structural improvements to the building, the Company and
Stinar requested and obtained a "no association" letter from the Minnesota
Pollution Control Agency ("MPCA") stating that, provided that certain
conditions set forth in the no association letter are met, the Company and
Stinar will not be deemed responsible for contamination that occurred at the
Stinar Facility prior to the purchase of the assets of Stinar by the Company.
The structural improvements recommended by the Company's environmental
consulting firm have been completed, and the contaminated soil has been removed
and transferred from the property. As a result, MPCA issued the no association
letter.
CEMETERY OPERATIONS - TRUST FUNDS
GENERAL. We have established a variety of trusts in connection with our
cemetery operations as required under applicable state law. Such trusts include
(i) pre-need cemetery merchandise and service trusts; and (ii) perpetual care
trusts. We also use independent financial advisors to consult with us on
investment policies and evaluate investment results.
PRE-NEED CEMETERY MERCHANDISE AND SERVICE TRUSTS. We are generally required
under Illinois law to deposit a specified amount (generally 50% to 85% of
selling price) into a merchandise and service trust fund for cemetery
merchandise and services sold in pre-need sales. The related trust fund income
earned is recognized when the related merchandise and services are delivered.
We are permitted to withdraw the trust principal and the accrued income when
the merchandise is purchased, when the service is provided by us, or when the
contract is cancelled.
PERPETUAL CARE FUNDS. Under Illinois law, the Company is required to place a
portion of all sales proceeds from cemetery lots, niches and crypts in a trust
fund for perpetual care of the cemeteries. Pursuant to these laws, the Company
deposits 15% of the revenues from the sale of grave spaces and 10% of revenues
from the sale of mausoleum space into a perpetual care fund. The income from
these perpetual care trusts provides the funds necessary to maintain cemetery
property and memorials in perpetuity. The trust fund income is recognized, as
earned, in the cemetery revenues. While we are entitled to withdraw the income
earned from our perpetual care trust to provide for the maintenance of the
cemetery property and memorials, we are not entitled to withdraw any of the
principal balance of the trust fund and, therefore, the principal balance is
reflected on the Company's balance sheet as an asset and liability.
COMPETITION
Factors determining competitive success in Oakridge's business segments
include price, service, location, quality and technological innovation.
Competition is strong in all markets served.
CEMETERY OPERATIONS. Our cemetery operations face competition with other
cemeteries in Cook and DuPage Counties in Illinois. Competitive factors in the
cemetery business are primarily predicated on location, convenience, service,
and heritage. We believe decisions made by most customers are only minimally
influenced, if at all, by pricing. But we believe most funeral directors are
greatly influenced by pricing, due to the limited resources of some customers,
and funeral directors may direct families to lower cost cemeteries. There are
virtually no new entrants in the markets served by the Company as the cost of
acquiring sufficient undeveloped land and establishing a market presence
necessary to commence operations is prohibitive.
There has been increasing competition from providers specializing in specific
services, such as cremations, who offer minimal services and low-end pricing.
We also face competition from companies that market products and related
information over the internet and funeral homes selling markers. However, we
have felt relatively limited impact in our market from those competitors to
date.
STINAR CORPORATION. The aviation ground support equipment business is
extremely fragmented and diverse. The purchasers of the types of equipment
manufactured by Stinar tend to be long-standing, repeat customers of the same
manufacturers, with quality, reliability, pricing, warranties, after market
service and delivery being the key factors cited by customers in selecting an
aviation ground support equipment supplier. Accordingly, while the market for
Stinar equipment is competitive, the Company believes that Stinar's reputation
for quality and reliable equipment and the industry's familiarity with Stinar
puts it on equal footing with its competitors. Major domestic competitors
include Global Ground Support, LLC in catering equipment; Lift-A-Loft
Corporation and NMC-Wollard in passenger stairs; Lift-A-Loft Corporation,
NMC-Wollard and Phoenix Metal Products in lavatory and water carts; and Tesco
Equipment Corporation, Lift-A-Loft corporation and NMC-Wollard in hi-lift
equipment. International competitors include Mullaghan Engineering in catering
equipment, and Accessair Systems, Inc. and Vestergaard Company, Inc. in water
and lavatory carts.
MARKETING
CEMETERY OPERATIONS. Sales are made to customers utilizing the facilities
primarily on an at-need basis; that is, on the occurrence of a death in the
family when the products and services and interment space are sold to the
relatives of the decedent. Cemeteries have started to actively market their
products, but most customers typically learn of the cemeteries they choose from
satisfied customers and funeral directors who recommend the cemeteries based on
superior location and services rendered.
STINAR CORPORATION. The chief method of marketing Stinar's equipment is
through one-on-one customer contact made by sales employees of Stinar and
manufacturers' representatives under contract with Stinar. Stinar's customers
report that Stinar has a reputation in the commercial aviation industry for
manufacturing high-quality, reliable equipment. Stinar intends to capitalize on
this reputation in the domestic airline industry by making frequent sales calls
on customers and potential customers and by reducing the amount of time needed
to complete customer orders. Stinar has also engaged manufacturers'
representatives to assist it in increasing sales to overseas markets.
CREDIT POLICIES
Neither of the Company's business segments generally extends long-term credit
to customers.
INTERNATIONAL
Stinar's sales to customers outside the United States represented approximately
11% and 16% of Stinar's net sales in 2011 and 2010, respectively. Products are
manufactured and marketed through the Company's sales department and sales
representatives around the world.
OTHER BUSINESS INFLUENCES
CEMETERY OPERATIONS. The cemetery operations do not experience seasonal
fluctuations, nor are they dependent upon any identifiable group of customers,
the loss of which would have a material adverse effect on its business, and
discussion of backlog is not material to understanding the Company's business.
STINAR CORPORATION. The Company believes that its business is highly dependent
upon the profitability of its customers in the airline and air cargo markets,
and therefore, the Company's profitability is affected by fluctuations in
passenger and freight traffic and volatility of operating expenses, including
the impact of costs related to labor, fuel and airline security. Sales to the
United States government also expose Stinar to government spending cuts and/or
temporary shutdown of the government due to debt limits. The United States Air
Force, which historically has been a major purchaser of the Company's
equipment, is dependent upon governmental funding approvals. Significant
changes in raw material prices, such as steel and chassis, will also continue
to impact our results. As of October 5, 2011, the Company had approximately a
$28,000,000 backlog. The backlog is due to two five-year contracts with United
States Air Force, GSA contract with the United States Air Force, and commercial
sales in the United States. The backlog is comparable to fiscal year 2010, and
will take approximately two to three years to complete, unless the Company
increases its production capacity.
The diversity of Stinar's customer base and equipment lines helps mitigate the
risks of Stinar's business, as does the growing importance of marketing
internationally, which provides Stinar with an additional customer base not
influenced as greatly by U.S. economic conditions or U.S. politics. We will
also focus on key risk factors when determining our overall strategy and making
decisions for allocating capital. These factors include risks associated with
the global economic outlook, product obsolescence, and the competitive
environment.
The Company does not believe that the present overall rate of inflation will
have a significant impact on the business segments in which it operates.
EMPLOYEES
As of June 30, 2011, the Company had 66 full-time and 9 part-time or seasonal
employees. Of these, the Company employed 46 full-time employees in the
aviation segment and 20 full-time and 9 part-time or seasonal employees in the
cemeteries segment.
The cemetery segment employees are represented by Local #1 of the Services
Employees International Union, AFL-CIO, whose contract expires
February 28, 2013.
A union does not represent the aviation segment employees, and the Company
considers its labor relations to be good.
ITEM 1A: RISK FACTORS.
Not applicable.
ITEM 1B: UNRESOLVED STAFF COMMENTS.
Not applicable.
ITEM 2: PROPERTIES.
The Company's executive office for Oakridge Holdings, Inc. is leased at 400
West Ontario St., Unit 1003, Chicago, Illinois, 60654.
The cemetery segment principal properties are located at Roosevelt Road and
Oakridge Ave., Hillside, Illinois. The two cemeteries comprise 176.7 acres of
real estate, of which 12.8 acres are used for interior roads and other
improvements, and 163.9 acres for burial plots. The cemeteries have two
mausoleums, an office building, and three maintenance buildings. The Oakridge
Cemetery (Hillside), Inc. mausoleum is in fair shape with major work being
required on all outside walls of the mausoleum to prevent water from leaking
into the mausoleum crypts. The Company expects the walls will require
approximately $200,000 to $300,000 of repairs starting in 2010 and finishing in
2014. The Company expects to finance these repairs with cash flow from its
cemetery business segment. All other buildings are in fair shape and will
require minimum repairs.
Stinar operates out of a single 43,271 square foot manufacturing facility in
Eagan, Minnesota, located on 7.875 acres of land. The land consists of two
contiguous parcels of real estate. The facility was refinanced in May 2008 for
$2,100,000 with monthly payments of principal and interest totaling $17,060 and
a final balloon payment of $1,826,000 due in May 2013, assuming no
pre-payments. The condition of the manufacturing facility and office space is
fair and will require minimum improvements in the foreseeable future at an
estimated cost of $200,000 that the Company expects to finance with cash flow
from its two business segments. Management reviews insurance policies annually
and believes that all of its properties are adequately insured.
ITEM 3: LEGAL PROCEEDINGS
The Company is a party to a number of legal proceedings that arise from time to
time in the ordinary course of business. While the outcome of these proceedings
cannot be predicted with certainty, we do not expect these matters to have a
material adverse effect on the Company. As of June 30, 2011, there were no
legal proceedings in either business.
We carry insurance with coverages and coverage limits consistent with our
assessment of risks in our businesses and of an acceptable level of financial
exposure. Although there can be no assurance that such insurance will be
sufficient to mitigate all damages, claims or contingencies, we believe that
our insurance provides reasonable coverage for known asserted or unasserted
claims. In the event the Company sustained a loss from a claim and the
insurance carrier disputed coverage or coverage limits, the Company may record
a charge in a different period than the recovery, if any, from the insurance
carrier.
ITEM 4: [REMOVED AND RESERVED]
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Trading in the Company's common stock is in the over the counter market,
primarily through listings in the National Quotation Bureau "pink sheets,"
although the market in the stock is not well established. The Company's trading
symbol is (OKRG.OB). The table below sets forth the range of high and low bid
prices for our common stock for each quarter within the two most recent fiscal
years. Prices used in the table were reported to the Company by National
Quotation Bureau, Inc. These quotations represent inter-dealer prices, without
retail markup or commission, and may not necessarily represent actual
transactions.
FISCAL YEAR
2011 2010
Low High Low High
----- ----- ----- -----
First Quarter $.36 $.40 $.33 $.35
Second Quarter $.36 $.40 $.33 $.36
Third Quarter $.40 $.65 $.32 $.36
Fourth Quarter $.40 $.58 $.32 $.50
As of October 12, 2011, there were 1,431,503 shares of Oakridge Holdings, Inc.
common stock outstanding. The common stock shares outstanding are held by
approximately 1,500 stockholders of record. Each share is entitled to one vote
on matters requiring the vote of shareholders. We believe there are
approximately 1,500 beneficial owners of the common stock.
The Company has never paid a cash dividend on its common stock. The Company
currently intends to retain earnings to finance the growth and development of
its business and does not anticipate paying any dividends on its common stock
in the foreseeable future. We are currently prohibited from paying dividends
under the terms of our credit agreements. Any future change in our dividend
policy will be made at the discretion of our Board of Directors in light of
the financial condition, capital requirements, earnings and prospects of the
Company and any restrictions under credit arrangements, as well as other
factors the Board of Directors may deem relevant. We are also prohibited from
repurchasing any of our outstanding common stock under the terms of our credit
agreement.
ITEM 6: SELECTED FINANCIAL DATA
Not applicable.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FISCAL 2011
LIQUIDITY AND CAPITAL RESOURCES
The Company relies on cash flow from its two business segments to meet
operating needs, fund debt service, and fund capital requirements. The
cemetery and Stinar operations did provide sufficient cash during fiscal year
2011 to support day-to-day operations, current debt service, and capital
expenditures. The Company expects that cemetery and Stinar operations will
provide sufficient cash during the next five years to cover all debt
requirements and operational needs.
Stinar has a $1,000,000 line of credit to finance accounts receivable, expiring
in October 2011. Additionally, Stinar has a $2,000,000 term loan to finance
inventories that matures in May 2018. During 2008 and 2010, the Company issued
convertible subordinated debentures in the aggregate principal amount of
$555,000 to certain individuals who are officers or directors of the Company.
During 2010, $20,000 of the debentures were satisfied. On July 1, 2010,
$485,000 of the debentures initially due July 1, 2010, were modified, whereby
the conversion rate of the debentures was revised from $.90 to $.50 per share
(fair value of the Company's common stock at that date was $0.38 per share) and
the maturity date was extended from July 1, 2010 to July 1, 2012, at which time
the Company expects to be able to pay all amounts due under the debentures or
to be able to extend the debentures' maturity date. On November 12, 2010, an
outside investor purchased $30,000 of a debenture and during February 2011
another $75,000 debenture was purchased by an officer and a director of the
Company.
The cemetery operations expect to hire one full-time sales employee during
2012, and the Company expects no changes in part-time or seasonal employees.
The Company's five year business plan calls for approximately $900,000 in
capital expenditures starting in 2012.
The cemetery operations' capital expenditures are expected to be approximately
$400,000 under the five-year plan. The funds are planned to be used for
building improvements for the Oakridge cemetery mausoleum, increasing inventory
of niches and crypts in mausoleums and outdoors, computer software and hardware
equipment, and ground equipment. Repairs for the mausoleum, originally
estimated at $300,000 to $400,000, will continue in the spring of 2012. The
Company expects to spend approximately $200,000 in 2012 on its cemetery
operations for repairs on the front building of mausoleum, lawn mowers and
gator utility vehicles for the grounds. The cemeteries' capital expenditures
for 2011 were $84,081 and were used for the following: $9,751 for gas pump,
grass trimmers, lawn mower engine, sump pump and lowering device for grounds
equipment, and $10,815 for repairs on the elevator and pump for boiler in the
mausoleum and $49,800 for tuck point, stairs and wall repairs to the two
mausoleums, $11,189 for computer equipment and $2,526 for miscellaneous office
equipment.
Stinar's capital expenditures are expected to be approximately $500,000 under
the five-year plan. The funds are planned to be used for improvements of the
manufacturing plant and office, technical manuals and drawings packages for the
building of new first time equipment, plant and office equipment, and computer
software and hardware. These expenditures are expected to take place evenly
over the five-year plan. Stinar's capital expenditures for 2011 were $232,229,
with, $194,659 for in-house technical drawings and electrical schematics to
build new and existing equipment, and $10,407 for software and hardware
equipment, $19,589 for machinery and shop equipment, $7,531 for building
improvements and $43 for office equipment. The Company expects to spend
approximately $50,000 in 2012 for Stinar's capital expenditures.
RESULTS OF OPERATIONS - 2011
CEMETERY OPERATIONS
In 2011, cemetery revenues decreased $142,469, or 4%, compared to 2010. The
decrease in sales were mostly sales that are discretionary, headstones
decreased $110,785, and foundations for headstones decreased $23,180. All other
sales changes are immaterial.
Cost of goods sold in 2011 was $1,999,847, a decrease of $64,333, or 3%,
compared to 2010. In 2011, cost of goods sold was 61% of revenue, or the same
when compared to 2010.
Selling expenses increased $38,163, or 14%, compared to 2010. The increase was
primarily attributable to having one more full time sales counselor and related
benefits. One more full time employee was needed due to the law instituted by
the State of Illinois that now requires all families to come out to the
cemetery to arrange the funeral, whereby in the past the funeral director made
all arrangements by telephone.
General and administrative expenses increased $13,774, or 2%, compared to
2010. The increase was primarily due to the law instituted by the State of
Illinois that required letters be sent out to all pre-need accounts at
December 31, 2010. This required supplying the trustee addresses for over
approximately 5,000 accounts and required the Company to hire an outside
contractor to perform the work.
Interest income from the perpetual care fund land trust decreased $42,926 or
39%, compared to 2010. The decrease was attributable to decreased interest
rates and timing of payments.
STINAR OPERATIONS
In 2011, revenue increased $2,518,132, or 23%, compared to 2010. The increase
was primarily due to increases in government contracts arising from the
Company's status in 2010 as a vendor with the U.S. government in a multiple
award schedule and three contracts with the United States Air Force for
maintenance lifts, stairs and lavatory trucks. However, sales for the last
quarter of the year were extremely low due to the United States government
stopping the shipment of all equipment due to the 2011 Ford chassis not being
able to run on jet fuel. This problem now has been settled and production is
expected to start again in November 2011.
Cost of goods sold in 2011 was $12,484,123, or 95% of sales, compared to 92%
in 2010. Accordingly, gross profit percentage dropped to 5% in 2011, compared
to 8% in year 2010. Cost of sales increased 3% in relation to sales, primarily
due to the price increase of steel, paint and related supplies for the paint
booth and an increase of payroll taxes due to the increase in state
unemployment rate. All other changes were immaterial.
Selling expenses decreased $80,046, or 33%, compared to 2010. The decrease was
primarily due to almost no commissions being paid to internal agents, because
most sales were being made to a sales representative for a company who does not
receive a sales commission but resells Stinar equipment.
General and administrative expenses increased $13,896, or 5%, compared to 2010.
The increase was attributable to an increase in real estate taxes of $6,967 and
bad debts of $6,225. All other changes were immaterial.
Interest expense increased $3,844, or 1%, compared to 2010. The increase was
attributable to chassis purchases resulting from an increase in sales.
HOLDINGS OPERATIONS
Loss from operations increased $19,962, or 7%, compared to 2010. The increase
was primarily attributable due to increases in professional fees paid to
accountants and attorneys of $19,924. The increase was due to increased audit
fees and legal fees paid during the year.
RESULTS OF OPERATIONS - 2010
CEMETERY OPERATIONS
In 2010, cemetery revenue increased $652,303, or 24%, compared to 2009. The
increase was due to an increase in marker sales of $108,343, cemetery sales of
$79,059, foundations of $96,651, grave boxes of $101,759 and interment fees of
$205,640. All other sales account changes were immaterial. The increase in
sales were primarily driven by a new cemetery law instituted by the State of
Illinois that now requires all families to come out to the cemetery to arrange
the funeral, whereby in the past the funeral director made all arrangements. In
having the families present at the cemetery, the cemeteries are getting more
up-selling opportunities.
Cost of goods sold in 2010 was $2,064,180, an increase of $269,053, or 15%,
compared to 2009. In 2010, cost of goods sold was 61% of revenue, down from 65%
in 2009. The increases in cost of sales related to an increase in markers of
$72,893, foundations of $29,464, grave liners of $31,194, health insurance of
$43,848, operating supplies of $42,180 and dirt hauling fess of $47,513. All
other cost account changes were immaterial. The decrease in the percentage of
cost of goods sold to revenue in 2010 was primarily due to the fixed nature of
salaries.
Selling expenses increased $18,179, or 7.6%, compared to 2009. The increase was
due to greater sales revenue and commissions paid.
General and administrative expenses increased $66,095, or 13%, compared to
2009. The increase was primarily attributable to increases in office salaries
of $22,018, health insurance of $9,986 and professional fees of $35,534. The
increases were due to having one more full time employee for the year,
increased costs of health insurance for the staff and professional fees related
to a comment letter from the Securities and Exchange Commission related to the
accounting treatment of the non-controllable interest in the trusts.
Interest income from the perpetual care fund land trust was relatively flat at
$23,022 for 2010 compared to $20,580 in 2009.
STINAR OPERATIONS
In 2010, revenue increased $1,437,193, or 16%, compared to 2009. The increase
was primarily due to increases in government contracts arising from the
Company's status in 2010 as a vendor with the U.S. government in a multiple
award schedule.
Cost of goods sold in 2010 was $9,801,168, or 91% of sales, compared to 89% in
2009. Accordingly, gross profit percentage dropped to 9% in 2010 compared to
11% in 2009. Cost of raw materials decreased 2% in relation to sales, whereas
truck chassis costs increased 20%, or $446,524, direct and indirect labor
increased $702,546, and shop supplies increased $248,168, in each case for
2010 compared to 2009. All other changes were immaterial. The increase in cost
of goods sold was directly related to increases in truck chassis costs.
Selling expenses increased $70,594, or 43%, compared to 2009. The increase was
primarily due to increased commissions being paid to international agents for
sales commissions.
General and administrative expenses decreased $139,881, or 37%, compared to
2009. The decrease was attributable to a decrease in bad debts of $86,725, and
decrease in officers' pay of $53,258. The decrease was in officers' pay is
attributable to having no Chief Financial Officer of Stinar and Robert C.
Harvey, the Chief Executive Officer, taking over those additional duties.
Research and development decreased $551,698, when compared to 2009. The
decrease was due to having no research and development expenses in 2010.
Interest expense increased $54,232, or 17%, compared to 2009. The increase was
attributable to chassis purchases resulting from an increase in sales.
Interest income decreased $6,855 compared to 2009 due to a lease agreement we
had with the United States Air Force expiring in 2009.
HOLDINGS OPERATIONS
Operating expenses increased $11,852, or 3%, compared to 2009. The increase was
primarily attributable to increased interest expense.
OBLIGATIONS AND COMMITMENTS
The following table summarizes our obligations and commitments to make
future payments under contracts, such as debt and lease agreements, as well
as other financial commitments.
Payments By Period
After
Five
Total 2012 2013 2014 2015 2016 Years
Long-term Debt $3,414,546 $244,800 $2,071,344 $204,136 $217,266 $231,241 $445,759
Subordinate
Debentures (1) $640,000 - 640,000 - - - -
---------- -------- ---------- -------- -------- -------- --------
Total Contractual
Cash Obligations $4,054,546 $244,800 2,711,344 $204,136 $217,266 $231,241 $445,759
========== ======== ========== ======== ======== ======== ========
(1) We expect to be able to pay the debentures of $640,000 due in 2012 using
cash flow from operations or by extending the related party debentures.
OFF-BALANCE SHEET ARRANGEMENTS
None.
ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements of the Company for the fiscal years ended June
30, 2011 and 2010, located at Exhibit 13, F-1, are incorporated herein.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 9A: CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
An evaluation was carried out under the supervision and with the participation
of the Company's management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures (as defined in Rule 13a-15(e)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as
of the end of the period covered by this annual report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Company's disclosure controls and procedures are not
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is (a) recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms and (b) accumulated and communicated to the Chief Executive
Officer and Chief Financial Officer to allow timely decisions regarding
disclosure. Notwithstanding the material weakness that existed as of
June 30, 2011, our Chief Executive Officer and Chief Financial Officer have
concluded that the consolidated financial statements included in this Annual
Report on Form 10-K present fairly, in all material respects, the financial
position, results of operations and cash flows of the Company and its
subsidiaries in conformity with accounting principles generally accepted in the
United States of America ("GAAP"). We continue to evaluate the potential steps
to remediate such material weakness, as described below.
MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a and 15d - 15f
under the Exchange Act. Our internal control system is designed to provide
reasonable assurance to our management and board of directors regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those
policies and procedures that:
- Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets
of the Company;
- Provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and
directors of the Company; and
- Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company's assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate. Management assessed
the effectiveness of our internal control over financial reporting as of
June 30, 2011. In making this assessment, management used the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control - Integrated Framework. Based on management's
assessment and those criteria, management believes that, as of June 30, 2011,
as a result of the material weakness described below, the Company has not
maintained effective internal control over financial reporting.
Material Weakness in Internal Control over Financial Reporting
A material weakness is a control deficiency, or combination of control
deficiencies, that results in more than a remote likelihood that a material
misstatement of annual or interim financial statements will not be prevented or
detected. In connection with its assessment, management identified the
following control deficiency that represents a material weakness at
June 30, 2011:
- Due to the limited number of Company personnel, a lack of segregation of
duties exists. An essential part of internal control is for certain procedures
to be properly segregated and the results of their performance be adequately
reviewed. This is normally accomplished by assigning duties so that no one
person handles a transaction from beginning to end and incompatible duties
between functions are not handled by the same person. Management plans to
explore implementing cost effective measures to establish a more formal review
process in an effort to reduce the risk of fraud and financial misstatements.
This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Our management's report of the effectiveness of the design and
operation of our disclosure controls and procedures was not subject to
attestation by the Company's registered public accounting firm in accordance
with the rules of the Securities and Exchange Commission that permit the
Company to provide only management's report in this annual report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
No change in the Company's internal control over financial reporting was
identified in connection with the evaluation required by Rule 13a 15(d) of the
Exchange Act that occurred during the fourth quarter ended June 30, 2011 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
ITEM 9B: OTHER INFORMATION
None.
PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item 10 relating to our directors and
executive officers is incorporated herein by reference to the section titled
"Proposal 1 - Election of Directors" in our proxy statement. The information
required by this Item 10 under Item 405 of Regulation S-K is incorporated
herein by reference to the section titled "Section 16(a) Beneficial Ownership
Reporting Compliance" in our proxy statement. The information required by this
Item 10 under Item 407(c)(3), (d)(4) and (d)(5) of Regulation S-K is
incorporated herein by reference to the section titled "Information About the
Board and Its Committees" in our proxy statement. Our proxy statement will be
filed no later than 120 days after June 30, 2011.
The Company has not adopted a code of ethics that applies to the Company's
Chief Executive Officer, Chief Financial Officer, Controller and other
employees performing similar functions. The Company has not adopted such a code
as all of these roles are performed or closely supervised by the Company's
Chief Executive Officer, who operates under the direct supervision of the Board
of Directors and Audit Committee.
ITEM 11: EXECUTIVE COMPENSATION
The information required by this Item 11 is incorporated herein by
reference to the section titled "Executive Compensation" in our proxy
statement, which will be filed no later than 120 days after June 30, 2011.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The information required by this Item 12 is incorporated herein by
reference to the section titled "Principal Shareholders and Beneficial
Ownership of Management" in our proxy statement, which will be filed no
later than 120 days after June 30, 2011.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE.
The information required by this Item 13 is incorporated herein by
reference to the sections titled "Certain Relationships and Related
Transactions" and "Proposal 1 - Election of Directors" in our proxy
statement, which will be filed no later than 120 days after June 30 2010.
ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The information required by this Item 14 is incorporated herein by
reference to the sections titled "Audit Fees" and "Preapproval Policies
and Procedures" in our proxy statement, which will be filed no later than
120 days after June 30, 2011.
ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENTS
The following consolidated financial statements of Oakridge Holdings, Inc. and
subsidiaries, together with the Report of Independent Registered Public
Accounting Firm, are filed in this report at Exhibit 13, F-1
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of June 30, 2011 and 2010
Consolidated Statements of Operations for the Years Ended June 30, 2011
and 2010
Consolidated Statements of Stockholders' Equity for the Years Ended
June 30, 2011 and 2010
Consolidated Statements of Cash Flows for the Years Ended June 30, 2011
and 2010
Notes to Consolidated Financial Statements
The following documents are filed or incorporated by reference as part of
this Form 10-K.
3(i) Amended and Restated Articles of Incorporation as amended (1)
3(ii) Amended and Superseding By-Laws as amended (1)
10(a) 1999 Stock Incentive Award Plan (2)
10(b) Loan Documents for Line of Credit (3)
10(c) Loan Documents for Term Loan (3)
10(e) Loan documents for Mortgage Note Payable (3)
10(f) Loan agreements with officers (4)
10(g) Form of Subordinated Convertible Debentures (5)
10(h) Form of Subordinated Convertible Debentures (6)
13 Financial Statements
21 Subsidiaries of Registrant (2)
23(a) Consent of Independent Registered Public Accounting Firm
23(b) Consent of Independent Registered Public Accounting Firm
31 Rule 13a-14(a)/15d-14(a) Certifications
32 Section 1350 Certifications
(1) Filed as exhibit to Form 10-KSB for fiscal year ended June 30, 1996.
(2) Filed as exhibit to Form 10-KSB for fiscal year ended June 30, 1999.
(3) Filed as exhibit to Form 10-KSB for fiscal year ended June 30, 2009.
(4) Material terms are described in Form 8-K filed September 26, 2009 and
incorporated herein by reference.
(5) Filed as exhibit to Form 8-K filed November 22, 2010.
(6) Filed as exhibit to Form 8-K filed February 2, 2011.
Signatures
In accordance with Section 13 or 15 (d) of the Exchange Act, the Company
has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
OAKRIDGE HOLDINGS, INC.
Dated: October 13, 2011 By /s/ Robert C. Harvey
Robert C. Harvey
Chairman Of the Board of Directors
In accordance with the Exchange Act, this report has also been signed below
by the following persons on behalf of the Company and in the capacities and
on the dates indicated.
Dated: October 13, 2011 By /s/ Robert C. Harvey
Robert C. Harvey
Chief Executive Officer
Chief Financial Officer
(principal accounting officer)
Director
Dated: October 13, 2011 By /s/ Robert B. Gregor
Robert B. Gregor
Secretary
Director
Dated: October 13, 2011 By /s/ Hugh H. McDaniel
Hugh H. McDaniel
Director
Dated: October 13, 2011 By /s/ Robert Lindman
Robert Lindman
Director
Dated: October 13, 2011 By /s/ Pamela Whitney
Pamela Whitney
Director
