Attached files
EXHIBIT 13
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH CONSOLIDATING INFORMATION
YEARS ENDED JUNE 30, 2011 AND 2010
TABLE OF CONTENTS
Page
Report of Independent Registered Public Accounting Firm
Consolidated Financial Statements:
Consolidated Balance Sheets 1
Consolidated Statements of Operations 2
Consolidated Statements of Stockholders' Equity 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Consolidating Information:
Report of Independent Registered Public Accounting Firm
on Consolidating Information 19
Consolidating Balance Sheets 20
Consolidating Statements of Operations 22
Moquist Thorvilson Kaufmann Kennedy & Pieper LLC
Certified Public Accountants & Consultants
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Oakridge Holdings, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Oakridge
Holdings, Inc. and Subsidiaries as of June 30, 2011 and 2010, and the related
consolidated statements of operations, stockholders' equity, and cash flows
for the years then ended. Oakridge Holdings, Inc. and Subsidiaries' management
is responsible for these financial statements. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakridge Holdings, Inc. and
Subsidiaries as of June 30, 2011 and 2010, and the results of its operations
and its cash flows for the year then ended, in conformity with U.S. generally
accepted accounting principles.
/s/ Moquist Thorvilson Kaufmann Kennedy & Pieper LLC
MOQUIST THORVILSON KAUFMANN KENNEDY & PIEPER LLC
Edina, Minnesota
October 12, 2011
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30,2011 June 30,2010
ASSETS
Current assets:
Cash and cash equivalents $416,997 $372,797
Restricted cash 89,857 89,320
Accounts receivable, less allowance for
doubtful accounts of $15,000 in 2011 and 2010 2,128,663 2,236,804
Inventories:
Production, net 7,535,252 6,647,308
Cemetery, mausoleum space, and markers 599,445 607,435
Deferred income tax assets 167,000 312,000
Other current assets 44,835 104,942
----------- -----------
Total current assets 10,982,049 10,370,606
----------- -----------
Property and equipment:
Property and equipment 6,822,008 6,506,136
Less accumulated depreciation (4,519,040) (4,312,179)
----------- -----------
Property and equipment, net 2,302,968 2,193,957
----------- -----------
Other assets:
Cemetery perpetual care trusts 5,345,922 4,962,756
Preneed trust investments 2,075,713 2,023,358
Debt issuance costs, less accumulated
amortization of $23,874 and $16,131
in 2011 and 2010 53,556 61,299
Deferred income tax assets 303,000 78,000
Other 4,238 11,033
----------- -----------
Total other assets 7,782,429 7,136,446
----------- -----------
Total Assets $21,067,446 $19,701,009
----------- -----------
June 30,2011 June 30,2010
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit - bank $1,710,845 $1,331,443
Trade accounts payable 1,456,555 1,249,716
Due to finance company 2,088,037 1,227,231
Accrued liabilities 785,566 979,818
Deferred revenue 1,697,935 1,886,908
Short term notes payable - others 330,000 380,000
Current maturities of long-term debt 244,800 696,321
----------- -----------
Total current liabilities 8,313,738 7,751,437
----------- -----------
Long-term liabilities:
Non-controlling interest in pre-need
trust investments 2,075,713 2,023,358
Long term debt, less current maturities 3,809,746 3,496,865
----------- -----------
Total long-term liabilities 5,885,459 5,520,223
----------- -----------
Total liabilities 14,199,197 13,271,660
----------- -----------
Non-controlling interest in perpetual
care trust investments 5,345,922 4,962,756
----------- -----------
Stockholders' equity:
Preferred stock, $.10 par value, 1,000,000
shares authorized; none issued - -
Common stock, $.10 par value, 5,000,000
shares authorized; shares issued and
outstanding 1,431,503 in 2011 and 2010 143,151 143,151
Additional paid-in capital 2,028,975 2,028,975
Accumulated deficit (649,799) (705,533)
----------- -----------
Total stockholders' equity 1,522,327 1,466,593
----------- -----------
Total Liabilities and Stockholders' Equity $21,067,446 $19,701,009
=========== ===========
See Notes to Consolidated Financial Statements
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended Year Ended
June 30, 2011 June 30, 2010
---------- ----------
Revenue $16,499,691 $14,134,028
Cost of goods sold 14,483,970 11,865,348
---------- ----------
Gross margin 2,015,721 2,268,680
---------- ----------
Operating expenses:
Selling 451,719 493,602
General and administrative 1,135,542 1,087,910
---------- ----------
Total operating expenses 1,587,261 1,581,512
---------- ----------
Income from operations 428,460 687,168
---------- ----------
Other income (expense):
Interest income 13,342 23,397
Interest expense (467,767) (464,123)
Other 1,699 (375)
---------- ----------
Total other expense (452,726) (441,101)
---------- ----------
Net income (loss) before income taxes (24,266) 246,067
(Benefit) provision for income taxes (80,000) 111,100
---------- ----------
Net income $55,734 $134,967
========== ==========
Earnings per share:
Basic net income per share $.04 $.09
========== ==========
Diluted net income per share $.04 $.09
========== ==========
See Notes to Consolidated Financial Statements
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 30, 2011 AND 2010
Common Stock
Number of Amount Additional Total
Shares Paid-In Accumulated
Capital (Deficit)
BALANCE,
June 30, 2009 1,431,503 $143,151 $2,028,975 (840,500) $1,331,626
Net income - - - 134,967 134,967
--------- -------- ---------- -------- ----------
BALANCE,
June 30, 2010 1,431,503 $143,151 $2,028,975 $(705,533) $1,466,593
Net income - - - 55,734 55,734
--------- -------- ---------- -------- ----------
BALANCE,
June 30, 2011 1,431,503 $143,151 $2,028,975 $(649,799) $1,522,327
========= ======== ========== ========= ==========
See Notes to Consolidated Financial Statements
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended Year Ended
June 30,2011 June 30,2010
Cash flows from operating activities:
Net income $55,734 $134,967
Adjustments to reconcile net income to
net cash flows from operating activities:
Depreciation and amortization 223,651 226,797
Deferred income taxes (80,000) 107,000
Accounts receivables 108,141 58,430
Inventories (879,954) (308,980)
Other assets 66,902 15,320
Accounts payable and due to finance company 1,067,645 (522,544)
(Gains) losses on trust investments (90,461) 3,872
Deferred revenue (188,973) 270,972
Accrued liabilities (194,252) 104,422
---------- ----------
Net cash flows from operating activities 88,433 90,256
---------- ----------
Cash flows from investing activities:
Restricted cash (537) (89,320)
Purchases of property and equipment (324,919) (163,966)
Sales of non-controlling investments in trusts 7,252,494 172,266
Purchases of non-controlling investments
in trusts (7,162,033) (176,138)
---------- ----------
Net cash flows from investing activities (234,995) (257,158)
---------- ----------
Cash flows from financing activities:
Net borrowings (repayments) on lines of
credit - bank 379,402 (9,242)
Proceeds from issuance of long-term debt 105,000 410,845
Proceeds from issuance of short-term note payable - 50,000
Principal payments on short-term debt (50,000) -
Principal payments on long-term debt (243,640) (257,057)
---------- ----------
Net cash flows from financing activities 190,762 194,546
---------- ----------
Net change in cash and cash equivalents 44,200 27,644
Cash and cash equivalents, beginning of year 372,797 345,153
---------- ----------
Cash and cash equivalents, end of year $416,997 $372,797
========== ==========
Supplemental Disclosures of Cash Flow Information
Cash paid during the years for:
Interest $467,909 $448,114
========== ==========
Income taxes $2,000 $4,100
========== ==========
See Notes to Consolidated Financial Statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2011 AND 2010
1. THE COMPANY
NATURE OF BUSINESS
The Company is a Minnesota corporation organized on March 6, 1961. The
Company operates two cemeteries in Illinois and an aviation ground support
equipment business in Minnesota. The cemetery operations routinely grant
credit to pre-need customers, substantially all of who are in the Chicago
area. On June 29, 1998, the Company acquired the net assets of an aviation
ground support equipment business (Stinar). Stinar designs, engineers and
manufactures aviation ground support equipment serving the United States
Armed Services and businesses domestically and internationally.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its subsidiaries, each of which is wholly-owned. All significant
intercompany balances and transactions have been eliminated in the
consolidated financial statements.
SEGMENT REPORTING
The Company operates and manages the business under two reporting segments,
cemeteries and aviation ground support equipment.
COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) includes net income (loss) and items defined
as other comprehensive income (loss). Items defined as other comprehensive
income (loss) include items such as foreign currency translation
adjustments and unrealized gains and losses on certain marketable
securities. For the years ended June 30, 2011 and 2010, there were no
adjustments to net income (loss) to arrive at comprehensive income (loss).
FAIR VALUES OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments at
June 30, 2011, and the methods and assumptions used to estimate such fair
values, were as follows:
Cash and cash equivalents - Fair value approximates the carrying amount because
of the short maturity of those financial instruments.
Long term debt and other notes payable - Fair value is estimated using
discounted cash flow analysis, based on the interest rates that are currently
available to the Company for issuance of debt with similar terms and remaining
maturities as of June 30, 2011 and 2010, the fair value approximated the
carrying value.
Cemetery perpetual care trusts - Fair market value is the amount on the trust
reports reported by the trustee.
Pre-need trust investments - Fair market value is the amount on the trust
reports reported by the trustee.
ESTIMATES AND ASSUMPTIONS
The preparation of consolidated financial statements in accordance with
United States generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the consolidated financial statements, and the reported
amounts of revenue and expenses during the reporting period. As a result,
actual amounts could differ from those estimates.
CONCENTRATIONS
Credit Risk
The Company's cash deposits from time to time exceed federally insured limits.
The Company has not experienced any losses on its cash deposits in the past.
Financial instruments which potentially subject the Company to a concentration
of credit risk consist principally of accounts receivable. The Company
generally does not require collateral for its trade accounts receivable.
Two United States customers accounted for 66% of Stinar's accounts receivable
at June 30, 2011, and one international customer accounted for 10% at
June 30, 2010. Additionally, the U.S. Government accounted for approximately
25% and 69% of Stinar's accounts receivable at June 30, 2011 and 2010,
respectively.
Customers
A significant portion of the Company's customers are concentrated in the
airline industry. A downturn in the airline industry related to the world
recession, September 11, 2001, acts of terrorism, decrease in government
sales and increases in fuel costs have had a negative impact on the
Company's continuing operations.
Stinar's net sales were concentrated as follows in 2011; international
customers (11%), U.S. Government (70%) and North American are (19%).
Stinar's net sales were concentrated as follows in 2010; international
customers (16%), U.S. Government (68%) and North American (16%)
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows and balance
sheets, the Company considers all highly liquid investments purchased with
a maturity of three months or less to be cash equivalents.
RESTRICTED CASH
Restricted cash represents amounts required to be held in escrow by certain
customers until completion of certain projects.
ACCOUNTS RECEIVABLES
The Company provides an allowance for doubtful accounts equal to the
estimated uncollectible amounts. The Company's estimate is based on
historical collection experience and a review of the current status of
accounts receivable. It is reasonably possible that the Company's
estimate of the allowance for doubtful accounts will change.
INVENTORIES
Finished goods, component parts and work in process inventories are stated
at the lower of cost (first in, first out [FIFO]) or market. The cemetery
and mausoleum space available for sale is stated at the lower of cost
(determined by an allocation of the total purchase and development costs
of each of the properties to the number of spaces available) or market.
The Company reviews inventory on an annual basis and provides an inventory
reserve for slow-moving, obsolete or unusable inventory.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is computed using
the straight line method over the estimated useful lives of the related
assets and are generally depreciated over a 3 to 15 year period. When
assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and any resulting
gain or loss is recognized in income for the period. The cost of
maintenance and repairs is charged to operations as incurred and
significant renewals and betterments are capitalized.
DEBT ISSUANCE COSTS
Debt issuance costs are carried at cost and amortized using the
straight-line method over the term of the related debt.
LONG-LIVED ASSETS
The Company periodically evaluates the carrying value of long-lived assets to
be held and used, including but not limited to, capital assets, when events and
circumstances warrant such a review. The carrying value of a long-lived asset
is considered impaired when the anticipated undiscounted cash flow from such
asset is less than its carrying value. In that event, a loss is recognized
based on the amount by which the carrying value exceeds the fair value of the
long-lived asset. Fair value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. Losses on
long-lived assets to be disposed of are determined in a similar manner,
except that fair values are reduced for the cost to dispose.
PRODUCT WARRANTY LIABILITY
The Company's aviation ground equipment segment warrants its products against
certain defects based on contract terms. Generally, warranty periods are five
years for workmanship and manufacturing defects and seven years for painting
defects. The Company has recourse provisions for certain items that would
enable recovery from third parties for amounts paid under the warranties.
At June 30, 2011 and 2010, the Company's estimated product warranty liability
based on historical activity was $15,000.
REVENUE RECOGNITION
Cemetery and Mausoleum Space Revenue
Sales of cemetery merchandise and services and at-need cemetery interment
rights are recorded as revenue when the merchandise is delivered or service is
performed.
Sales of pre-need cemetery grave plots rights are recognized in accordance
with the retail land sales provisions of Financial Accounting Standards Board
(FASB) Accounting Standard Codification (ASC) 976-10 "Accounting for Sales of
Real Estate". Accordingly, provided certain collectible criteria are met,
pre-need cemetery interment right sales are deferred until a specified minimum
percentage of the sales price has been collected. A portion of the proceeds
from cemetery sales for interment rights is generally required by law to be
paid into perpetual care trusts. Earnings of perpetual care trusts are
recognized in current cemetery revenue and are used to defray the maintenance
costs of cemeteries, which are expensed as incurred.
Pursuant to various state and provincial laws, a portion of the proceeds from
the sale of pre-need merchandise and services are required to be paid into
trusts, which are included in pre-need trust investments in the Company's
consolidated financial statements. The un-trusted proceeds are included in
deferred revenue. Sales of pre-need merchandise including grave boxes and
interment are recorded as revenue when products and services have been
delivered and collection of the resulting receivable is reasonably assured.
Selling costs related to the sale of pre-need cemetery contract revenues are
expensed in the period incurred.
Aviation Ground Support Equipment
Revenue is recognized when all significant contractual obligations have been
satisfied and collection of the resulting receivable is reasonably assured.
SHIPPING AND HANDLING COSTS
All shipping and handling revenue is included in revenue. All direct costs
to ship the products to customers are classified as cost of goods sold.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in the
consolidated financial statements and consist of taxes currently due plus
deferred income taxes. Deferred income taxes relate to differences between the
financial and tax bases of certain assets and liabilities. The significant
temporary differences relate to operating loss carry forwards, depreciation,
inventories and certain accruals. Deferred income tax assets and liabilities
represent the future tax return consequences of those differences, which will
either be taxable or deductible when the assets and liabilities are recovered
or settled.
The Company has adopted the provisions of FASB ASC 740-10-25 which clarifies
the accounting for uncertainty in income taxes recognized in an enterprise's
financial statements, and prescribes a recognition threshold and measurement
process for financial statement recognition and measurement of a tax position
taken or expected to be taken in a tax return. FASB ASC 740-10-25 also provides
guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition.
The Company files consolidated income tax returns in the U.S. federal
jurisdiction and various state jurisdictions. Based on the Company's
evaluation, the Company has concluded that there are no significant
unrecognized tax implications. The Company's evaluation was performed for the
tax years ended June 30, 2005 through June 30, 2011, the tax years that remain
subject to examination by major tax jurisdictions as of June 30, 2011. The
Company does not believe there will be any material changes in unrecognized tax
positions over the next twelve months.
The Company may from time to time be assessed interest or penalties by major
tax jurisdictions, although any such assessments historically have been minimal
and immaterial to financial results. In accordance with FASB ASC 740-10-25, the
Company has decided to classify interest and penalties as a component of income
tax expense.
ENVIRONMENTAL COSTS
Environmental expenditures that pertain to current operations or relate to
future revenue are expensed or capitalized consistent with the Company's
capitalization policy. Expenditures that result from the remediation of an
existing condition caused by past operations that do not contribute to current
or future revenue are expensed. Liabilities are recognized for remedial
activities when the clean up is probable and the cost can be reasonably
estimated.
ADVERTISING COSTS
Advertising costs are expensed as incurred.
SHARE-BASED PAYMENTS
The Company records as an expense in its consolidated statement of operations
the cost of employee services received in exchange for an award of equity
instruments based on the grant-date fair market value of the award. The
Company uses the Black-Sholes-Merton ("Black Sholes") option-pricing model as
a method for determining the estimated fair market value for employee stock
awards. Compensation expense for employee stock awards is recognized on a
straight-line basis over the vesting period of the award.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs in the product development process are expensed
as incurred. Assets that are acquired for research and development
activities and have alternative future uses in addition to a current use are
included in equipment and depreciated over the assets' estimated useful lives.
Research and development costs consist primarily of contract engineering costs
for outsourced design or development and equipment and material costs relating
to all design and prototype development activities.
BASIC AND DILUTED NET EARNINGS PER SHARE
Basic net earnings (loss) per common share is computed by dividing net earnings
(loss) applicable to common stockholders by the weighted average number of
common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon exercise of common
stock options and conversion of subordinated debenture and adjusting the net
earnings (loss) applicable to common stockholders resulting from the assumed
conversions. In periods where losses are reported, the weighted average number
of common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
RECENT ACCOUNTING PRONOUNCEMENTS
In January 2010, the FASB issued ASC 820 "Fair Value Measurements and
Disclosures - Improving Disclosures about Fair Value Measurements." This
update requires additional disclosure within the roll forward of activity for
assets and liabilities measured at fair value on a recurring basis, including
transfers of assets and liabilities between Level 1 and Level 2 of the fair
value hierarchy and the separate presentation of purchase, sales, issuances
and settlements of assets and liabilities within Level 3 of the fair value
hierarchy. In addition, the update requires enhanced disclosures of the
valuation techniques and inputs used in the fair value measurements within
Levels 2 and 3. The new disclosure requirements are effective for interim
and annual periods beginning after December 15, 2009 except for the disclosure
of purchases, sales, issuances and settlements of Level 3 measurements. Those
disclosures are effective for fiscal years beginning after December 15, 2010.
As ASC 820 only requires enhanced disclosures, the Company does not expect
that the adoption of this update will have a material effect on its financial
statements.
3. CONSOLIDATION OF VARIABLE INTEREST ENTITY
The Company identifies variable interest entities (VIEs) and determines when
they should include the assets, liabilities, non-controlling interests and
results of activities of a VIE in its consolidated financial statements.
In general, a VIE is a corporation, partnership, limited liability company,
trust, or any other legal structure used to conduct activities or hold assets
that either (1) has an insufficient amount of equity to carry out its principal
activities without additional subordinated financial support, (2) has a group
of equity owners that are unable to make significant decisions about its
activities, or (3) has a group of equity owners that do not have the obligation
to absorb losses or the right to receive returns generated by its operations.
The Company has determined they are required to consolidate the preneed
cemetery merchandise and service trusts and the cemetery perpetual care trust
(the trusts) as variable interest entities in its consolidated statement of
operations due to the equity investors not having the characteristics of a
controlling financial interest or do not have a insufficient amount of equity
to carry out its principal activities without additional subordinated financial
support. The consolidation affected certain line items in the consolidated
balance sheet, but had no impact on net earnings. Also, the consolidation does
not result in any net changes to the Company's consolidated statement of cash
flows, but does require disclosure of certain financing and investing
activities.
See further discussion of the trusts in Notes 4 and 5.
4. PRENEED TRUST INVESTMENTS
The Company sells price-guaranteed preneed cemetery contracts providing for
merchandise or services to be delivered in the future at prices prevailing when
the agreements are signed. Some or all of the funds received under these
contracts for merchandise or services are required to be placed into trust
accounts, pursuant to Illinois state laws. When a trust-funded preneed cemetery
contract is entered into, the Company records an asset (included in cemetery
receivables and trust investments) and a corresponding liability (included in
deferred cemetery revenues) for the contract price. As the customer makes
payments on the contract prior to performance by the Company, the Company
deposits into the related trust the required portion of the payment and
reclassifies the corresponding amount from deferred cemetery revenue into
non-controlling interest in cemetery trusts.
The Company recognizes realized earnings of these trusts with investment and
other income, net (with a corresponding debit to receivables and trust
investments). The corresponding expense is recognized within investment and
other income, net, equal to the realized earnings of the trusts attributable to
the non-controlling interest holders (with a corresponding credit to
non-controlling interest in cemetery trusts), or attributable to the Company
(with a corresponding credit to deferred cemetery revenue) when such earnings
have not been earned by the Company through the performance of services or
delivery of merchandise. The net effect is an increase by the amount of the
unrealized earnings in both (1) the trust asset and (2) the related
non-controlling interest or deferred cemetery revenue items; there is no
effect on net earnings. The cumulative undistributed net trust investment
earnings of the cemetery merchandise and services trusts are included in
non-controlling interest in cemetery trusts. Upon performance of services or
delivery of merchandise, the Company recognizes as revenues amounts attributed
to the non-controlling interest holders, including realized trust earnings.
Trust Investments:
Trust investments represent trust assets for contracts sold in advance of when
the merchandise or services are needed. The trust investments in the
consolidated balance sheet were $2,075,713 and $2,023,358 at June 30, 2011 and
2010, respectively.
The market value associated with the preneed cemetery merchandise and service
trust assets as of June 30, 2010 and 2009 are detailed below.
Year Beginning Interest Distributions Contributions Ending
Market Income Market
Value Value
2011 $2,023,358 $18,581 $(65,105) $98,876 $2,075,713
2010 $2,059,056 $88,826 $(224,280) $99,756 $2,023,358
All funds are invested in fixed equities.
Deferred Cemetery Revenue:
As of June 30, 2011 and 2010, deferred cemetery revenue represents future
preneed cemetery revenues to be recognized upon delivery of merchandise or
performance of services. It includes amounts not required to be trusted, this
includes distributed and distributable trust investment earnings associated
with unperformed preneed cemetery services or undelivered preneed cemetery
merchandise where the related cash or investments are not held in trust
accounts (generally because the Company was not required to deposit the cash in
the trust). Future contract revenues and non-distributable net trust
investment earnings where the related cash or investments are held in trust
accounts are included in non-controlling interest in cemetery trusts.
5. CEMETERY PERPETUAL CARE TRUSTS
The Company sells price-guaranteed preneed cemetery contracts providing for
property interment rights. For preneed sales of interment rights (cemetery
property), the associated revenue and all costs to acquire the sale are
recognized in accordance with FASB ASC 976-10, "Accounting For Sales of Real
Estate." Under FASB ASC 976-10, recognition of revenue and costs must be
deferred until 10 percent of the property sale price has been collected. The
Company is required by state law to pay into the cemetery perpetual care trusts
a portion of the proceeds from the sale of cemetery property interment rights.
The Company has consolidated the cemetery perpetual care trusts, including
investments accounted for under SFAS No. 115, resulting in such funds being
reflected in cemetery perpetual care trust investments within total assets,
with a corresponding amount reflected as non-controlling interest in perpetual
care trusts.
The Company recognizes realized earnings of these trusts within investment and
other income, net (with a corresponding debit to cemetery perpetual care trust
investments). The Company recognizes a corresponding expense within investment
and other income, net for the amount of realized earnings of the trusts
attributable to the non-controlling interest holders (with a corresponding
credit to non-controlling interest in perpetual care trusts). The net effect
is an increase by the amount of the realized earnings of the trusts in both
the trust asset and the related non-controlling interest.
Earnings from these cemetery perpetual care trust investments that the Company
is legally permitted to withdraw are recognized in current cemetery revenues
and are used to defray cemetery maintenance costs which are expensed as
incurred.
Year Beginning Realized Unrealized Distributions Contributions Change Ending
Market Gain Gain (loss) in Market
Value Cash Value
2011 $4,962,756 $339,428 $20,719 $(89,273) $108,405 $3,887 $5,345,922
2010 $4,687,816 $132,606 $(69,829) $(104,166) $98,974 ($217,355) $4,962,756
The cost of the trust investments held by the cemetery are $5,339,652 and
$5,201,797 as of June 30, 2011 and 2010, respectively.
6. INVENTORIES
Production inventories consisted of the following at June 30:
2011 2010
Finished goods $ - $6,574
Work-in-process 3,693,658 3,686,827
Raw materials and trucks 3,841,594 2,983,907
Reserve for obsolescence - (30,000)
---------- ----------
$7,535,252 $6,647,308
========== ==========
Inventories of cemetery and mausoleum space available for sale
consisted of the following at June 30:
2011 2010
Cemetery space $408,705 $420,992
Mausoleum space and other 190,740 186,443
-------- --------
$599,445 $607,435
======== =========
7. PROPERTY AND EQUIPMENT
Property and equipment, at cost consisted of the following at June 30:
2011 2010
Land and improvements $1,366,000 $1,366,000
Building and improvements 2,426,005 2,376,374
Vehicles 581,890 581,710
Equipment 2,448,113 2,182,052
---------- ----------
$6,822,008 $6,506,136
========== ==========
Depreciation charged to operations was $215,908 in 2011 and $219,054 in 2010.
8. ACCRUED LIABILITIES
Accrued liabilities consisted of the following at June 30:
2011 2010
Compensation and payroll taxes $594,317 $677,009
Due to trust funds 77,000 188,413
Interest 45,964 46,106
Other 68,285 68,290
-------- --------
$785,566 $979,818
======== ========
9. DEBT
Due to Finance Company
A finance company finances a subsidiary's inventory chassis purchases, which
are used in the production of aviation ground support equipment. At
June 30, 2011 and 2010, $2,088,037 and $1,227,231 was outstanding with
interest ranging from 5.88% to 8.25%, beginning 90 days after purchase.
Principal payments on chassis purchases are due in full, six months after
purchase. The financing is secured by chassis inventory and personally
guaranteed by the assets of the chief executive officer/key stockholder.
Lines of Credit - Bank
The Company has a line of credit agreement with a bank allowing borrowings up
to $1,000,000, subject to certain borrowing base limitations with interest at
2% over the reference rate with a floor of 7% (7% at June 30, 2011), maturing
October 31, 2011. The reference rate is the rate announced by U.S. Bank
National Association. As of June 30, 2011 and 2010, the outstanding borrowings
under this line of credit were $1,000,000 and $970,598, respectively. The line
of credit is secured by the assets of the Company's wholly owned subsidiary,
Stinar HG, Inc., continuing commercial guarantees from both the Company and
the chief executive officer and VP of marketing and sales, and by the
assignment of a life insurance policy on the chief executive officer/key
stockholder. See loan covenants below.
The Company has a second line of credit agreement with the same bank allowing
borrowings up to $750,000, subject to certain borrowing base limitations, with
interest at 2% over the reference rate with a floor of 7% (7% at J
une 30, 2011), maturing July, 2011 . The reference rate is the rate announced
by U.S. Bank National Association referred to as the "U.S. Bancorp Prime
Lending Rate". As of June 30, 2011 and 2010, the outstanding borrowings under
this line of credit were $710,845 and $360,845, respectively. The proceeds can
only be used to finance inventory destined for export outside the United States
and to support performance bonds associated with related contract down
payments. The note is secured by the assets of the Company's wholly-owned
subsidiary, Stinar HG, Inc., continuing commercial guarantees from the Company,
the Chief Executive Officer and VP of Marketing and Sales and the assignment
of a life insurance policy on the Chief Executive Officer. Subsequent to
June 30, 2011, the Company extended this line of credit with similar terms,
except that the allowed borrowings were increased to $1,000,000. The extended
agreement matures August 2012.
Short Term Notes Payable - Others
The Company had $330,000 and $380,000 in unsecured notes payable at
June 30, 2011 and 2010, respectively, including $300,000 due to key
officers/shareholders at June 30, 2011 and 2010. These notes are due on demand
and bear interest at 9%.
Long Term Debt
Long-term debt consisted of the following at June 30:
2011 2010
Note payable - bank payable in monthly
installments of $781, including interest
at 5.75%. The note is secured by the
equipment and matured in January 2011. $- $4,610
Note payable - finance company, payable
in monthly installments of $615, including
interest at 8.25%. The note is secured by
the equipment and matured in April 2011. - 5,938
Note payable - bank, payable in monthly
installments of $17,060, including interest
at 7.5%, with a balloon payment in May 2013.
The note is secured by the assets of Stinar
including accounts receivable of $1,883,772
at June 30, 2011, continuing commercial
guarantees from both the Company and the
chief executive officer/key stockholder,
and by the assignment of a life insurance
policy on the chief executive officer/key
stockholder.Additionally, the note is secured
by a first mortgage on property owned by
Stinar. See loan covenants below. 1,944,139 1,998,661
Note payable - bank, payable in monthly
installments of $22,457 including interest
at the prime rate plus 1%, adjusted every
calendar quarter (4.25% at June 30, 2011),
maturing in May 2018. The note is secured
by the assets of Stinar including accounts
receivable of $1,883,772 at June 30, 2011,
and the unconditional guarantee of the chief
executive officer/key stockholder, and by
the assignment of a life insurance policy on
the chief executive officer/key stockholder.
See loan covenants below. 1,470,407 1,648,977
---------- ----------
Long-term debt before debentures 3,414,546 3,658,186
Convertible subordinated debentures -
unsecured with 9% interest due annually each
January 1, convertible into one common share
for each $0.50 of principal, maturing on
July 1, 2012. The debentures are issued to
shareholders/officers of the Company
($560,000) and an outside investor ($80,000).
On July 1, 2010, the Company refinanced
existing subordinated convertible debentures
which had a maturity date of July 1, 2010 and
a conversion rate of $0.90 per share.
All other terms remained the same. 640,000 535,000
---------- ----------
4,054,546 4,193,186
Less current maturities 244,800 696,321
---------- ----------
$3,809,746 $3,496,865
========== ==========
Future maturities of long-term debt are as follows at June 30,2011:
2011 $244,800
2012 2,711,344
2013 204,136
2014 217,266
2015 231,241
Thereafter 445,759
----------
$4,054,546
==========
Loan Covenants
Stinar's bank loan agreements stipulate certain affirmative and negative
covenants, including financial covenants for cash flow and debt to equity
measured on a stand-alone basis. As of and for the year ended June 30, 2011,
the actual cash flow to current maturity ratio was 0.63 to 1.00 while the
allowed minimum was 1.20 to 1.00, and the debt to equity ratio was 3.92 to 1.00
while the maximum allowed was 4.50 to 1.00. The negative covenant includes a
restriction on Stinar capital expenditures of $50,000 annually. n 2011, Stinar
incurred capital expenditures of approximately $232,000. The bank subsequently
issued a waiver for the cash flow covenant which was not met and the negative
covenant. The next covenant calculation date will be June 30, 2012.
10. INCOME TAXES
The income tax provision (benefit) is comprised of the following at June 30:
2011 2010
Current tax expense (benefit):
Federal $ - $ -
State - 4,000
---------- ----------
Total current - 4,000
---------- ----------
Deferred tax (benefit):
Federal (78,000) 121,000
State (2,000) (14,000)
---------- ----------
Total deferred (80,000) 107,000
---------- ----------
Total expense (benefit) for income taxes $(80,000) $111,100
========== ==========
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities. The major temporary differences that give rise to the deferred
tax liabilities and assets are as follows at June 30:
2011 2010
Deferred tax assets:
Inventory $38,000 $35,000
Accrued compensation 141,000 176,000
Tax credit carryforwards 143,000 53,000
Net operating loss carryforwards 204,000 224,000
Other 9,000 11,000
------- -------
Gross deferred tax assets 535,000 499,000
------- -------
Deferred tax liabilities:
Property and equipment (65,000) (109,000)
-------- --------
Gross deferred tax liabilities (65,000) (109,000)
-------- --------
Net deferred tax assets $470,000 $390,000
======== ========
The Company has recorded its deferred tax assets (liabilities) in the
accompanying consolidated balance sheets as follows at June 30:
2011 2010
Current assets:
Deferred income taxes $167,000 $312,000
Non-current assets:
Deferred income taxes 303,000 78,000
-------- --------
Net deferred tax asset $470,000 $390,000
======== ========
The provision for income taxes varies from the amount of income tax
determined by applying the applicable federal statutory income taxes to
pretax income as a result of the following differences:
2011 2010
Statutory U.S. federal tax rate (34.0)% 34.0%
State taxes, net of federal benefit (2.0)% 4.0%
Tax credit adjustment (294.0)% -%
Permanent differences and other -% 7.2%
----- -----
Effective tax rate (330.0)% 45.2%
===== =====
The Company has federal and state net operating loss carryforwards of
approximately $459,000 and $869,000, respectively, which begin to expire in
2017.
11. OTHER RELATED PARTY TRANSACTIONS
Amounts expensed for tax compliance services to entities related to the chief
executive officer's spouse were $17,510 in 2011 and $23,329 in 2010. Interest
expense on the related party convertible debentures and notes payable totaled
$73,313 and $72,450 in 2011 and 2010, respectively. The Company has a
month-to-month operating lease for its corporate offices from one of the
officers. Total rent expense for this lease was $24,600 in 2011 and 2010.
12. BENEFIT PLANS
Certain subsidiaries of the Company participate in a multi employer union
administered defined benefit pension plan that covers the cemetery employees.
The current union agreement expires on February 28, 2013. Pension expense
under this plan was $34,160 in 2011 and $28,619 in 2010.
13. STOCK OPTIONS
On September 1, 1998, the Board of Directors approved a Stock Incentive Awards
Plan to attract and retain individuals to contribute to the achievement of the
Company's economic objectives. Under the Plan, individuals are eligible based
on the judgment of a committee of Board members (committee). At the discretion
of the committee, eligible recipients may be granted options to purchase
shares of the Company's common stock at an exercise price per share equal to
the market price at the grant date. The stock options are exercisable at such
times and in such installments as determined by the committee, limited to a
maximum of ten years from the date of the grant. The Plan has authorized the
issuance of 175,000 shares of common stock under the Plan, there were no grants
for shares issued in 2011 and 2010, and as of June 30, 2011, 175,000 shares
were available for future grants. There are no outstanding options at
June 30, 2011 and for the years ended June 30, 2011 an 2010 there was no stock
option expense.
14. EARNINGS PER SHARE OF COMMON STOCK DISCLOSURES
The following table reconciles the income and shares of the basic
and diluted earnings per share computations:
2011 2010
Net Income Shares Per-Share Net Income Shares Per-Share
---------- ------------ ------- ---------- ------------ -------
(Numerator)(Denominator) Amount (Numerator)(Denominator) Amount
---------- ------------ ------- ---------- ------------ -------
BASIC EPS
Net income available
to common shareholders $55,737 1,431,503 $.04 $134,967 1,431,503 $.09
EFFECT OF DILUTIVE
SECURITIES
Convertible debentures 52,388 1,164,932 45,450 542,998
--------- ---------- --------- ---------
DILUTED EPS
Net income available
to common shareholders
plus assumed conversions $108,122 2,596,435 $.04 $180,417 1,974,501 $.09
========= ========== ======= ========= ========== =====
ANTIDILUTIVE SECURITIES
Employee stock options 5,000
=======
15. SEGMENT INFORMATION
The Company's operations are classified into two principal industry segments:
cemeteries and aviation ground support equipment. The accounting policies of
the segments are the same as those described in the summary of significant
accounting policies. The Company evaluates performance based on profit or loss
from operations before income taxes. Financial information by industry segment
as of and for the years ended June 30, 2011 and 2010 is summarized as follows:
Aviation
Ground
Support
Cemeteries Equipment Total
2011 ----------- ------------ -----------
Net sales - external $3,252,807 $13,246,884 $16,499,691
Depreciation 126,812 85,023 211,835
Interest expense 1,029 383,606 384,635
Segment operating profit 377,914 351,112 729,026
Segment assets 13,794,977 11,373,908 25,168,885
Expenditures for segment fixed assets 84,080 232,297 316,377
Income tax expense (benefit) 165,000 (93,000) 72,000
Aviation
Ground
Support
Cemeteries Equipment Total
2010 ----------- ------------ -----------
Net sales - external $3,405,276 $10,728,752 $14,134,028
Depreciation 145,769 72,800 218,569
Interest expense 2,911 379,762 382,673
Segment operating profit 517,987 449,785 967,772
Segment assets 13,229,128 10,527,945 23,757,073
Expenditures for segment fixed assets 45,761 114,305 160,066
Income tax expense 238,000 31,000 269,000
Reconciliation of segment profit to consolidated net income before income
taxes is as follows:
2011 2010
---------- ----------
Total profit (loss) for reportable segments $357,733 $608,121
Unallocated amounts:
Interest expense (83,132) (81,450)
Other corporate expenses (298,867) (280,604)
---------- ----------
Income (loss) before income taxes $(24,266) $246,067
========== ==========
Reconciliation of segment assets to consolidated assets is as follows
at June 30:
2011 2010
---------- ----------
Total segment assets $25,168,885 $23,757,073
Other assets 37,506 58,996
Elimination of receivable from holding
company (4,461,945) (4,318,060)
Deferred tax asset 323,000 203,000
---------- ----------
Total assets $21,067,446 $19,701,009
========== ==========
Segment profit represents segment revenues less directly related operating
expenditures including interest of the Company's segments. Management
believes this is the most meaningful measurement of each segment's results
as it excludes consideration of corporate expenses which are common to
both business segments.
Other corporate expenses consist principally of senior management's
compensation and general and administrative expenses. These costs
generally would not be subject to significant reduction upon the
discontinuance or disposal of one of the segments.
16. RESEARCH AND DEVELOPMENT COSTS
Research and development expenses charged to operations were $0 in 2011
and 2010, respectively.
17. RECLASSIFICATIONS
Certain 2010 information has been reclassified to conform to the 2011
presentation. Total 2010 equity, net income and cash flows were unchanged
due to these reclassifications.
17. FAIR VALUE MEASUREMENTS
As discussed in Note 1, effective July 1, 2009, the Company adopted the
provisions of FASB ASC 820-10, Fair Value Measurements, which defines
fair value as the price that would be received to sell an asset or paid
to transfer a liability between market participants at a measurement date.
ASC 820-10 did not materially affect the Company's results of operations or
financial position; however, additional disclosures are now required. This
statement describes a fair value hierarchy that includes three levels of inputs
to be used to measure fair value. The three levels are defined as follows as
interpreted for use by the Company: Level 1 - Inputs into the fair value
methodology are based on quoted market prices in active markets. Level 2 -
Inputs into the fair value methodology are based on quoted prices for similar
items, broker/dealer quotes, or models using market interest rates or yield
curves. The inputs are generally seen as observable in active markets for
similar items for the asset or liability, either directly or indirectly, for
substantially the same term of the financial instrument. Level 3 - Inputs into
the fair value methodology are unobservable and significant to the fair value
measurement (primarily consisting of alternative type investments, which
include but are not limited to limited partnership interests, hedges, private
equity, real estate, and natural resource funds). Often these types of
investments are valued based on historical cost and then adjusted by shared
earnings of a partnership or cooperative, which can require some varying degree
of judgment. Information regarding assets (principally cash and investments)
and liabilities measured at fair value on a recurring basis as of June 30, 2011
and 2010, respectively, is as follows:
Recurring Fair Value Measurement Using Total Fair
Level 1 Level 2 Level 3 Value
-------- ---------- ------- ----------
June 30, 2011
Assets at fair value:
Cash and cash equivalents $416,997 $ - $ - $416,997
Fixed income and debt
securities - Cemetery
perpetual care and pre-need
trust investments - 7,421,635 - 7,421,635
-------- ---------- --- ----------
Total assets at fair value $416,997 $7,421,635 $ - $7,838,632
======== ========== === ==========
Liabilities at fair value:
Non-controlling interest in
pre-need trust investments $ - $2,075,713 $ - $2,075,713
======== ========== === ==========
June 30, 2010
Assets at fair value:
Cash and cash equivalents $372,797 $ - $ - $372,797
Fixed income and debt
securities - Cemetery
perpetual care and pre-need
trust investments - 6,986,114 - 6,986,114
-------- ---------- --- ----------
Total assets at fair value $372,797 $6,986,114 $ - $7,358,911
======== ========== === ==========
Liabilities at fair value:
Non-controlling interest in
pre-need trust investments $ - $2,023,358 $ - $2,023,358
======== ========== === ==========
The methods described in Note 1 for fair value calculations may produce a fair
value calculation that may be different from the net realizable value or not
reflective of future values expected to be received. The Company believes that
its valuation methods are appropriate and consistent with other market
participants; however, the use of these various methodologies and assumptions
may produce results that differ in the estimates of fair value at the
financial reporting date.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Oakridge Holdings, Inc. and Subsidiaries
Our report on our audits of the consolidated financial statements of Oakridge
Holdings, Inc. and Subsidiaries for the years ended June 30, 2011 and 2010
appears before page 1. Those audits were made for the purpose of forming an
opinion on the consolidated financial statements taken as a whole. The
consolidating information on pages 20 through 22 is presented for purposes of
additional analysis of the consolidated financial statements rather than to
present the financial position, results of operations, and cash flows of the
individual companies. Such information has been subject to the auditing
procedures applied in the audits of the consolidated financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
consolidated financial statements taken as a whole.
/s/ Moquist Thorvilson Kaufmann Kennedy & Pieper LLC
MOQUIST THORVILSON KAUFMANN KENNEDY & PIEPER LLC
Edina, Minnesota
October 12, 2011
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATING BALANCE SHEETS
June 30, 2011 (with Comparative Totals for 2010)
Oakridge Oakridge Stinar Consolidated
Holdings, Inc. Cemeteries HG, Inc. Eliminations 2011 2010
------------- ---------- ----------- ------------ ---------- ----------
ASSETS
Current assets:
Cash $349 $299,192 $117,456 $ - $416,997 $372,797
Restricted cash - - 89,857 - 89,857 89,320
Trade accounts receivable 9,000 235,891 1,883,772 - 2,128,663 2,236,804
Intercompany receivable 390,738 4,461,945 - (4,852,683) - -
Inventories:
Production - - 7,535,252 - 7,535,252 6,647,308
Cemetery, mausoleum space,
markers and related - 599,445 - - 599,445 607,435
Other current assets 15,663 6,466 22,706 - 44,835 104,942
Deferred income taxes 125,000 - 42,000 - 167,000 312,00
---------- ---------- --------- ------------ ----------- ----------
Total current assets 540,750 5,602,939 9,691,043 (4,852,683) 10,982,049 10,370,606
---------- ---------- --------- ------------ ----------- ----------
Property and equipment
Land and improvements - 954,347 411,653 - 1,366,000 1,366,000
Building and improvements - 920,973 1,505,032 - 2,426,005 2,376,374
Vehicles - 517,690 64,200 - 581,890 581,710
Equipment 18,771 1,196,131 1,233,211 - 2,448,113 2,182,052
---------- ---------- --------- ------------ ----------- ----------
18,771 3,589,141 3,214,096 - 6,822,008 6,506,136
Less accumulated depreciation (10,515) (2,818,738) (1,689,787) - (4,519,040) (4,312,179)
---------- ---------- --------- ------------ ----------- ----------
Property and equipment, net 8,256 770,403 1,524,309 - 2,302,968 2,193,957
---------- ---------- --------- ------------ ----------- ----------
Other assets:
Investments in subsidiaries 70,039,988 - - (7,039,988) - -
Cemetery perpetual care trusts - 5,345,922 - - 5,345,922 4,962,756
Preneed trust Investments - 2,075,713 - - 2,075,713 2,023,358
Deferred income taxes 204,000 - 105,000 (6,000) 303,000 78,000
Deferred financing costs - - 53,556 - 53,556 61,299
Other 4,238 - - - 4,238 11,033
---------- ---------- ---------- ------------ ----------- ----------
Total other assets 7,248,226 7,421,635 158,556 (7,045,988) 7,782,429 7,136,446
---------- ---------- ---------- ------------ ----------- ----------
Total Assets $7,797,232 $13,794,977 $11,373,908 $(11,898,671) $21,607,446 $19,701,009
========== ========== ========== ============ =========== ==========
Oakridge Oakridge Stinar Consolidated
Holdings, Inc. Cemeteries HG, Inc. Eliminations 2011 2010
------------- ---------- ----------- ------------ ---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit - bank $- $- $1,710,845 $ - $1,710,845 $1,331,443
Trade accounts payable 127,641 126,606 1,202,308 - 1,456,555 1,249,716
Due to finance company - - 2,088,037 - 2,088,037 1,227,231
Intercompany payables 4,746,735 - 105,948 (4,852,683) - -
Accrued liabilities
Salaries and payroll taxes 384,565 113,247 96,505 - 594,317 677,009
Due to trust funds - 77,000 - - 77,000 188,413
Interest 45,964 - - - 45,964 46,106
Other - - 68,285 - 68,285 68,290
Deferred revenue - 1,464,330 233,605 - 1,697,935 1,886,908
Short term notes payable - other 330,000 - - - 330,000 380,000
Current maturities of long-term debt - - 244,800 - 244,800 696,321
---------- ---------- --------- ------------ ----------- ----------
Total current liabilities 5,634,905 1,781,183 5,750,333 (4,852,683) 8,313,738 7,751,437
---------- ---------- --------- ------------ ----------- ----------
Long-term liabilities:
Long-term debt, net of current maturities 640,000 - 3,169,746 - 3,809,746 3,496,865
Non-controlling interest in pre-need
investments - 2,075,713 - - 2,075,713 2,023,358
Deferred income tax liabilities - 6,000 - (6,000) - -
---------- ---------- --------- ------------ ----------- ----------
Total long-term liabilities 640,000 2,081,713 3,169,746 (6,000) 5,885,459 5,520,223
---------- ---------- --------- ------------ ----------- ----------
Total Liabilities 6,274,905 3,862,896 8,920,079 (4,858,683) 14,199,197 13,271,660
---------- ---------- --------- ------------ ----------- ----------
Non-controlling interest in
perpetual care trust investments - 5,345,922 - - 5,345,922 4,962,756
---------- ---------- --------- ------------ ----------- ----------
Stockholders' equity:
Common stock 143,151 20,000 10,000 (30,000) 143,151 143,151
Paid in capital 2,028,975 - 3,172,041 (3,172,041) 2,028,975 2,028,975
Retained earnings (deficit) (649,799) 4,566,159 (728,212) (3,837,947) (649,799) (705,533)
---------- ---------- --------- ------------ ----------- ----------
Total Stockholders Equity 1,522,327 4,586,159 2,453,829 (7,039,988) 1,522,327 1,466,593
---------- ---------- --------- ------------ ----------- ----------
Total Liabilities and
Stockholders' Equity $7,797,232 $13,794,977 $11,373,908 $(11,898,671) $21,067,446 $19,701,009
========== ========== ========= ============ =========== ==========
OAKRIDGE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATING STATEMENTS OF OPERATIONS
Year Ended June 30, 2011 (with Comparative Totals for 2010)
Oakridge Oakridge Stinar Consolidated
Holdings, Inc. Cemeteries HG, Inc. Eliminations 2011 2010
------------- ---------- ----------- ------------ ---------- ----------
Revenue $ - 3,252,807 13,246,884 $ - $16,499,691 $14,134,028
Cost of goods sold - 1,999,847 12,484,123 - 14,483,970 11,865,348
---------- ---------- --------- ------------ ----------- ----------
Gross profit - 1,252,960 762,7691 - 2,015,721 2,268,680
---------- ---------- --------- ------------ ----------- ----------
Selling, General & Administrative:
Selling - 295,065 156,654 - 451,719 493,602
General and administrative 300,566 579,981 254,995 - 1,135,542 1,087,910
---------- ---------- --------- ------------ ----------- ----------
Total Selling, General & Administrative 300,566 875,046 411,649 - 1,587,261 1,581,512
---------- ---------- --------- ------------ ----------- ----------
Operating income (loss) (300,566) 377,914 351,112 - 428,460 687,168
---------- ---------- --------- ------------ ----------- ----------
Other income (expense):
Equity in subsidiary earnings (losses) 285,733 - - (285,733) - -
Interest expense (83,132) (1,029) (383,606) - (467,767) (464,123)
Interest income - 12,990 352 - 13,342 23,397
Other 1,699 - - - 1,699 (375)
---------- ---------- --------- ------------ ----------- ----------
Total other income (expense) 204,300 11,961 (383,254) (285,733) (452,726) (441,101)
---------- ---------- --------- ------------ ----------- ----------
Income (loss) from operations
before taxes (96,266) 389,875 (32,142) (285,733) (24,266) 246,067
Income tax provision (benefit) (152,000) 165,000 (93,000) (80,000) 111,100
---------- ---------- --------- ------------ ----------- ----------
Net income $55,734 $224,875 $60,858 $(285,733) $55,734 $134,967
========== ========== ========= ============ =========== ==========
See Report of Independent Registered Public Accounting Firm on Consolidating Information.
