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EXCEL - IDEA: XBRL DOCUMENT - PISMO COAST VILLAGE INCFinancial_Report.xls
EX-31 - EXHIBIT 31.3 - PISMO COAST VILLAGE INCexhibit31_3.htm
EX-31 - EXHIBIT 31.1 - PISMO COAST VILLAGE INCexhibit31_1.htm
EX-32 - EXHIBIT 32.3 - PISMO COAST VILLAGE INCexhibit32_3.htm
EX-31 - EXHIBIT 31.2 - PISMO COAST VILLAGE INCexhibit31_2.htm
EX-32 - EXHIBIT 32.2 - PISMO COAST VILLAGE INCexhibit32_2.htm
EX-32 - EXHIBIT 32.1 - PISMO COAST VILLAGE INCexhibit32_1.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

      For the quarterly period ended March 31, 2012

 

OR

 

[  ]  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 0-8463 

 

                                                                PISMO COAST VILLAGE, INC.                                                     

(Exact name of registrant as specified in its charter)

 

                                  California                                                                                         95-2990441          

(State or other jurisdiction of incorporation or organization)                                                (IRS Employer ID No.)

 

165 South Dolliver Street, Pismo Beach, CA                                                                                     93449  

(Address of Principal Executive Offices)                                                                                         (Zip Code)

 

                                                                           (805) 773-5649                                                                     

Registrant’s telephone number, including area code

 

____________________________________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 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 (Subsection 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 [X]            NO [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

 

                  [  ] Large accelerated filer                                        [  ] Accelerated filer

                  [  ] Non-accelerated filer                                           [X] 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]

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.            YES [  ]            NO [  ]

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.            1,787

 

 

PART I – FINANCIAL INFORMATION

 

ITEM 1.       FINANCIAL STATEMENTS

The following financial statements and related information are included in this Form 10-Q, Quarterly Report.

 

1.         Accountant’s Review Report

 

2.         Balance Sheets

 

3.         Statements of Operations and Retained Earnings

 

4.         Statements of Cash Flows

 

5.         Notes to Financial Statements (Unaudited)

 

The financial information included in Part I of this Form 10-Q has been reviewed by Brown Armstrong Accountancy Corporation, the Company's Certified Public Accountants, and all adjustments and disclosures proposed by said firm have been reflected in the data presented. The information furnished reflects all adjustments which, in the opinion of management, are necessary to a fair statement of the results for the interim periods.

 

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

STATEMENT ON FORWARD-LOOKING INFORMATION

Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to anticipated expenses, capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to competitive industry conditions, California tourism and weather conditions, dependence on existing management, leverage and debt service, the regulation of the recreational vehicle industry, domestic or global economic conditions and changes in federal or state tax laws or the administration of such laws.

 

 

1

 


 

 

OVERVIEW

The Company continues to promote and depend upon recreational vehicle camping as the primary source of revenue. The rental of campsites to the general public provides income to cover expenses, complete capital improvements, and allow shareholders up to forty-five free nights camping annually. Additional revenues come from RV storage and spotting, RV service and repair, on-site convenience store, and other ancillary activities such as laundromat, arcade, and bike rental.

 

The Company has been fortunate not to have significant impact due to the current economy. The RVing public actively seeks accommodations on the Central Coast despite volatile fuel prices and personal financial uncertainties. RVing offers an affordable outdoor recreational experience, and the Company provides quality facilities and services in a highly popular location. Total site occupancy is up 3.2% compared to this time last year due to the timing of Spring break. Occupancy projections look equal to last year throughout the remainder of the fiscal year. Revenues from ancillary operations such as the General Store, arcade, laundromat, and bike rental are flat to slightly down year-to-date, and management feels this is directly related to the economy, and that this trend will continue throughout the remainder of the fiscal year.

 

RV storage continues to be a primary source of revenue for the Company; however, demand has slowed due to the economy’s impact on disposable income. RV storage provides numerous benefits to the customer, including: no stress of towing, no need to own a tow vehicle, use of RV by multiple family members, and convenience.

 

Ongoing investment in resort improvements has assured resort guests and shareholders a top quality, up-to-date facility. This quality and pride of ownership was evident when the National Association of RV Parks and Campgrounds Park of the Year was awarded to the resort for 2007-08. In addition, in a national “My Favorite Campground” contest sponsored by Woodalls, Pismo Coast Village was voted as one of the top ten favorite campgrounds for 2011. Also, Pismo Coast Village was one of forty-four parks nationally to receive an industry rated “A” park from over 33,000 surveys for customer satisfaction.

 

The Company’s commitment to quality, value, and enjoyment is underscored by the business’s success due to word of mouth and referrals from guests. In addition, investment for online marketing, ads in the two leading national directories, and trade magazine advertising formulates most of the business-marketing plan.

 

RESULTS OF OPERATIONS

The Company develops its income from two sources: (a) Resort Operations, consisting of revenues generated from RV site rentals, from RV storage space operations, and from lease revenues from laundry and arcade operations by third party lessees; and (b) Retail Operations, consisting of revenues from General Store operations and from RV parts and service operations.

 

Income from resort operations for the three‑month period ended March 31, 2012, increased $109,359, or 12.8%, above the same period in 2011. This increase in income reflects a $91,687, or 16.2%, increase in site revenue due to paid occupancy increasing 10.3%, and a site rental rate increase effective January 1 2012. Also reflected in this increase is a $17,633, or 6.5%, increase in RV storage activity. Resort Operations Income for the six‑months ended March 31, 2012, increased $155,275, or 8.4%, from the same period ended March 31, 2011. This increase is due primarily to an increase of $127,443, or 10.2%, in site revenue as a result of a 3.8% increase in paid site occupancy and a rate increase effective January 1, 2012.  RV storage activity contributed to this increase with a 5.4%, or $29,846, increase in revenue.

 

 

2

 

 

 

Income from retail operations for the three‑month period ended March 31, 2012, increased $13,124, or 6.9%, above the same period in 2011. The General Store revenue was up $8,633, or 9.4%, and RV Service revenue increased $4,494, or 4.6%, from the previous year. Income from Retail Operations for the six‑month period ending March 31, 2012, increased by $15,408, or 3.7%, above the same period ended March 31, 2011. The General Store was up $8,301, or 4.1%, and RV Service was up $7,101, or 3.4%. Management recognizes this economy is impacting the ancillary revenue areas within the resort. The RV Service operation is marketed to off‑resort customers, and, therefore, is not as impacted by resort occupancy. Management continues to place importance upon ongoing review of retail product mix, attention to service, and staff training. The Company anticipates flat to slightly positive performance in income from retail operations through the remainder of fiscal year 2012.

 

Operating expenses for the three‑month period ending March 31, 2012, increased $88,896, or 10.0%, above the same period ended March 31, 2011. This increase in expenses primarily reflects labor, workers’ compensation, landscaping (primarily tree trimming and removal), property tax, and resort repairs and maintenance. For the six‑month period ending March 31, 2012, operating expenses increased by $167,361, or 9.1%, above the same period in 2011. This increase reflects labor, workers' compensation, payroll fees, landscaping, property tax, small equipment, and repairs and maintenance. Management continues to review and scrutinize expenses in order to maximize efficiency and profitability during this volatile economy. Due to the age of the Resort, the Company is undertaking maintenance activity which is considered necessary in order to continue providing quality facilities and services. Some of these projects include road repair, utility improvements, landscaping, and building repair.

 

Cost of Goods Sold expenses, as a percentage of retail income for the three‑months ended March 31, 2012, are 51.0% compared to 46.8% for the same period in 2011. For the six‑months ended March 31, 2012, Cost of Goods Sold expenses were 51.4% compared to 48.1% the previous year. These levels are well within the guidelines established by management for the individual category sales of RV supplies and General Store merchandise.

 

Interest Expense for the three‑months ended March 31, 2012, is $53,653, compared to $61,250 for the same period in 2011. For the six‑month period ended March 31, 2012, compared to the same period in 2011, interest expense was $107,723 and $123,539 respectively. This expense reflects financing for the purchase of additional RV storage properties which closed escrow January 11, 2006, April 6, 2006, and March 5, 2008.

 

Loss before provision for income tax for the three‑month period ended March 31, 2012, decreased by $24,954, reflecting increased income in resort and retail operations compared to the previous year. For the six‑months ended March 31, 2012, loss before provisions for income tax decreased by $1,326 reflecting increased income from resort and retail operations. Revenues during this period are directly attributed to and are consistent with seasonal occupancy of a tourist‑oriented business.

 

Upon review of operational expenses, occupancy, and competition, the Board of Directors may approve adjustments to the nightly site rental rates or towing and storage rates. Due to the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Although the supply‑demand balance generally remains favorable, future operating results could be adversely impacted by weak demand. This condition could limit the Company's ability to pass through inflationary increases in operating costs at higher rates. Increases in transportation and fuel costs or sustained recessionary periods could also unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive. It is anticipated the published rates will continue to market site usage at its highest value and not negatively impact the Company's ability to capture an optimum market share.

 

 

 

3

 


 

 

LIQUIDITY

The Company plans capital expenditures of approximately $625,000 in fiscal year 2012 to further enhance the resort facilities and services. These projects include: renovation of 47 campsites, major road paving, Clubhouse upgrade including new windows, a new trailer towing truck, an ADA-compliant pool lift, and a new financial reporting program. Funding for these projects is expected to be from normal operating cash flows and, if necessary, supplemented with outside financing. These capital expenditures are expected to increase the resort’s value to its shareholders and the general public. With the exception of the new financial reporting program, all other 2012 projects were completed on time and within budget.

 

The Company's current cash position as of March 31, 2012, is $1,938,907, which is 21.2% more than the position in 2011. This increase in cash on hand reflects last year’s $250,000 principal buy-down of a note payable made in March 2011. The present level of cash is being maintained in anticipation of large capital expenditures. Management is planning and implementing long‑term renovations to the Resort property which includes redesigning sites and utilities to accommodate the needs of modern recreational vehicles.

 

Accounts payable and accrued liabilities increased $116,942, or 73.0%, from the same period last year. This reflects some significant expenditures associated with the campsite renovation completed on March 30, 2012. All undisputed payables have been paid in full according to the Company's policy.

 

The Company has consistently demonstrated an ability to optimize revenues developed from the resort and retail operations during the summer season. Historically the Company, because of its seasonal market, has produced 60% to 65% of its revenue during the third and fourth quarters of the fiscal year, with more than 40% being produced during the fourth quarter. The third and fourth quarters' occupancies are expected to be consistent with that of past years.

 

DISCLOSURE CONCERNING WEBSITE ACCESS TO COMPANY REPORTS

The Company makes available on its website, www.pismocoastvillage.com, access to its annual report on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8‑K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (SEC).

 

The public may read and copy any of the materials filed with the SEC at the SEC's Public Reference Room located at 100 F Street, N. E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1‑800‑SEC‑0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy statements, and other information that the Company files with the SEC.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable

 

ITEM 4T.     CONTROLS AND PROCEDURES

 

DISCLOSURE CONTROLS AND PROCEDURES

As required by Rule 13a‑15 under the Securities Exchange Act of 1934 (the "1934 Act"), as of March 31, 2012, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/General Manager (our principal executive officer) and our Chief Financial Officer (our principal financial officer). Based upon and as of the date of that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as described in Item 8A(T) included with our Annual Report on Form 10‑K for the year ended September 30, 2011.

 

 

 

4

 

 

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the 1934 Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) promulgated by the SEC under the 1934 Act) during the six‑months ended March 31, 2012, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II ‑ OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

No pending legal proceedings against the Company other than routine litigation incidental to the business.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

 

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

 

ITEM 5. OTHER INFORMATION

Not Applicable

 

 

 

 

5

 


 

 

ITEM 6. EXHIBITS

 

Exhibit No.

 

Description of Exhibit

Sequential

Page Number

 

 

 

27

Financial Data Schedule

 

 

 

 

99

Accountant’s Review Report

 

 

 

 

31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Ronald Nunlist, President and Chairman of the Board)

 

 

 

 

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(Jay Jamison, Chief Executive Officer and principal executive officer)

 

 

 

 

31.3

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(Jack Williams, Chief Financial Officer, principal financial officer and principal accounting officer)

 

 

 

 

32.1

Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Ronald Nunlist, President and Chairman of the Board)

 

 

 

 

32.2

Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Jay Jamison, Chief Executive Officer and principal executive officer)

 

 

 

 

32.3

Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Jack Williams, Chief Financial Officer, principal financial officer and principal accounting officer)

 

 

 

 

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

PISMO COAST VILLAGE, INC.

(Registrant)

 

 

 

Date:          May 14, 2012

 

 

Signature:   /s/ RONALD NUNLIST

Ronald Nunlist, President and Chairman of the Board

 

Date:          May 14, 2012

 

 

Signature:   /s/ JACK WILLIAMS

Jack Williams, V.P. - Finance/Chief Financial Officer

(principal financial officer and principal accounting officer)

 

 

Date:          May 14, 2012

 

 

Signature:   /s/ JAY JAMISON

Jay Jamison, General Manager/Chief Executive Officer

(principal executive officer)

 

 

 

 

 

 

 

7

 


 

 

 

 

 

 

 

REPORT OF INDEPENDENT REGISTERED

 

PUBLIC ACCOUNTING FIRM

 

 

 

 

 

 

 

 

To the Board of Directors

Pismo Coast Village, Inc.

165 South Dolliver Street

Pismo Beach, California 93449

 

 

We have reviewed the accompanying balance sheets of Pismo Coast Village, Inc. as of March 31, 2012 and 2011 and the related statements of operations and retained earnings and cash flows for the six-month periods ended March 31, 2012 and 2011. These interim financial statements are the responsibility of the Company's management.

 

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

 

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

 

 

 

 

 

 

                                                                  BROWN ARMSTRONG ACCOUNTANCY CORPORATION

 

 

Bakersfield, California

May 14, 2012

 

 

 

 

8

 

 


 

 

 

PISMO COAST VILLAGE, INC.

BALANCE SHEETS

MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011

 

 

 

March 31,

2012

(Unaudited)

September 30,

2011

(Audited)

March 31,

2011

(Unaudited)

ASSETS

 

 

 

Current Assets

 

 

 

Cash and cash equivalents

$        1,938,907

$        1,801,693

$        1,600,257

Accounts receivable

19,256

23,079

24,948

Inventory

176,164

154,455

175,363

Current deferred taxes

73,000

73,600

73,300

Prepaid income taxes

222,500

1,300

226,600

Prepaid expenses

43,275

43,877

32,931

  Total current assets

2,473,102

2,098,004

2,133,399

 

 

 

 

Pismo Coast Village Recreational Vehicle

  Resort and Related Assets –

Net of accumulated depreciation

 

 

14,328,492

 

 

14,081,098

 

 

14,105,421

 

 

 

 

Other Assets

24,863

27,059

27,059

 

 

 

 

  Total Assets

$      16,826,457

$      16,206,161

$      16,265,879

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current Liabilities

 

 

 

Accounts payable and accrued expenses

$          303,886

$          160,383

$          186,944

Accrued salaries and vacation

64,912

175,549

55,823

Rental deposits

1,498,662

796,158

1,457,658

Current portion of long- term debt

135,938

131,882

128,007

  Total current liabilities

2,003,398

1,263,972

1,828,432

 

 

 

 

Long-Term Liabilities

 

 

 

Long-term deferred taxes

657,700

664,000

581,500

N/P Donahue Trans

33,271

36,587

39,771

N/P Mission Community Bank

4,079,638

4,146,617

4,210,010

  Total Liabilities

6,774,007

6,111,176

6,659,713

 

 

 

 

Stockholders’ Equity

 

 

 

Common stock – no par value, 1,800 shares issued

  1,787 and 1,789 shares outstanding at

  March 31, 2012 and 2011, respectively

 

 

5,606,919

 

 

5,606,919

 

 

5,613,194

Retained earnings

4,445,531

4,488,066

3,992,972

  Total stockholders’ equity

10,052,450

10,094,985

9,606,166

 

 

 

 

  Total Liabilities and Stockholders’ Equity

$      16,826,457

$      16,206,161

$      16,265,879

 

The accompanying notes are an integral party of these financial statements.

 

 

9

 


 

 

PISMO COAST VILLAGE, INC.

STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

(UNAUDITED)

THREE AND SIX MONTHS ENDED MARCH 31, 2012 AND 2011

 

 

Three Months

Ended March 31,

Six Months

Ended March 31,

 

2012

2011

2012

2011

Income

 

 

 

 

Resort operations

$    963,797 

$      854,438 

$   1,994,053 

$  1,838,778 

Retail operations

203,152 

190,028 

424,362 

408,954 

  Total income

1,166,949 

1,044,466 

2,418,415 

2,247,732 

 

 

 

 

 

Cost and Expenses

 

 

 

 

Operating expenses

977,729 

888,833 

2,005,359 

1,837,998 

Cost of goods sold

103,547 

88,964 

218,186 

196,596 

Depreciation and amortization

84,346 

85,387 

164,301 

172,154 

  Total cost and expenses

1,165,622 

1,063,184 

2,387,846 

2,206,748 

 

 

 

 

 

Income (Loss) from Operations

1,327 

(18,718)

30,569 

40,984 

 

 

 

 

 

Other Income (Expense)

 

 

 

 

Gain on sale of fixed assets

2,170 

2,170 

Interest and dividend income

561 

1,079 

1,319 

3,224 

Interest expense

(53,653)

(61,250)

(107,723)

(123,539)

Total other income (expense)

(53,092)

(58,001)

(106,404)

(118,145)

 

 

 

 

 

Loss Before Provision for Income Tax

(51,765)

(76,719)

(75,835)

(77,161)

 

 

 

 

 

Income Tax (Benefit)

22,100 

34,500 

33,300 

34,700 

 

 

 

 

 

Net Loss

$    (29,665)

$      (42,219)

(42,535)

(42,461)

 

 

 

 

 

Retained Earnings – Beginning of Period

 

 

4,488,066 

4,035,433 

 

 

 

 

 

Retained Earnings – End of Period

 

 

$    4,445,531 

$   3,992,972 

 

 

 

 

 

Net Loss Per Share

$      (16.60)

$        (23.60)

$        (23.80)

$        (23.73)

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these financial statements.

 

 

10

 


 

 

 

PISMO COAST VILLAGE, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

SIX MONTHS ENDED MARCH 31, 2012 AND 2011

 

 

2012

2011

Cash Flows From Operating Activities

 

 

 

 

Net (Loss)

 

$          (42,535)

 

$        (42,461)

Adjustments to reconcile net loss to net

   cash provided by operating activities:

 

 

 

 

Depreciation

$       164,301 

 

$      172,153 

 

Gain on disposal of fixed assets

 

(2,170)

 

Increase (decrease) in accounts receivable

3,823 

 

(364)

 

Increase in inventory

(21,709)

 

(47,459)

 

Decrease in current deferred taxes

600 

 

 

Increase in prepaid income taxes

(221,200)

 

(226,600)

 

Decrease in prepaid expenses

602 

 

1,061 

 

Decrease in other assets

2,196 

 

4,392 

 

Increase in accounts payable and accrued expenses

143,504 

 

25,282 

 

Decrease in accrued salaries and vacation

(110,637)

 

(114,456)

 

Increase in rental deposits

702,504 

 

686,447 

 

Decrease in income taxes payable

 

(41,800)

 

Increase (decrease) in deferred taxes

(6,300)

 

75,300 

 

   Total adjustments

 

657,684 

 

531,786 

 

 

 

 

 

Net cash provided by operating activities

 

615,149 

 

489,325 

 

 

 

 

 

Cash Flows Used in Investing Activities

 

 

 

 

Capital expenditures

(411,697)

 

(311,229)

 

Proceeds from sale of assets

 

2,250 

 

   Net cash used in investing activities

 

(411,697)

 

(308,979)

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

Principal payments on note payable

 (66,238)

 

(307,212)

 

   Net cash (used in) financing activities

 

(66,238)

 

(307,212)

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

137,214 

 

(126,866)

 

 

 

 

 

Cash and Cash Equivalents – Beginning of Period 

 

1,801,693 

 

1,727,123 

 

 

 

 

 

Cash and Cash Equivalents – End of Period

 

$      1,938,907 

 

$     1,600,257 

 

 

 

 

 

 

Schedule of Payments of Interest and Taxes

 

 

 

 

Payments for interest

 

$         107,723 

 

$       123,539 

Payments for income tax

 

$         100,632 

 

$       158,401 

 

 

 

 

 

       

 

The accompanying notes are an integral part of these financial statements.

 

 

11

 


 

 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011 (Audited)

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Nature of Business

 

Pismo Coast Village, Inc. (Company) is a recreational vehicle camping resort. Its business is seasonal in nature with the fourth quarter, the summer, being its busiest and most profitable.

 

Inventory

 

Inventory has been valued at the lower of cost or market on a first-in, first-out basis. Inventory is comprised primarily of finished goods in the general store and in the RV repair shop.

 

Depreciation and Amortization

 

Depreciation of property and equipment is computed using an accelerated method based on the cost of the assets, less allowance for salvage value, where appropriate. Depreciation rates are based upon the following estimated useful lives:

 

Building and park improvements

5 to 40 years

Furniture, fixtures, equipment and leasehold improvements

5 to 31.5 years

Transportation equipment

5 to 10 years

 

 

 

Earnings (Loss) Per Share

 

The earnings (loss) per share reported on the financial statements are based on the weighted-average number of shares outstanding at the end of each reporting period. The Company does not have any potentially dilutive securities issued or outstanding.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid investments including certificates of deposit with maturities of three months or less when purchased, to be cash equivalents.

 

Concentration of Credit Risk

 

At March 31, 2012, the Company had cash deposits in excess of the $250,000 federally insured limit with Mission Community Bank of $1,634,757; however, in the past the Company has used Excess Deposit Insurance Bond which secures deposits up to $1,500,000. It has recently been stated by bank regulators that this insurance bond is not enforceable. The FDIC’s Temporary Transaction Account Guarantee Program provides unlimited coverage for non-interest bearing accounts until December 31, 2013. Mission Community Bank is participating in the Temporary Liquidity Guarantee Program which is a requirement to obtain the non-interest bearing coverage.

 

 

12

 


 

 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011

PAGE 2

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Income Taxes

 

The Company uses the asset-liability method of computing deferred taxes in accordance with Accounting Standards Codification (ASC) Income Taxes topic. ASC 740 requires, among other things, that if income is expected for the entire year, but there is a net loss to date, a tax benefit is recognized based on the annual effective tax rate.

 

ASC 740 also requires, among other things, the recognition and measurement of uncertain tax positions based on a “more likely than not” (likelihood greater than 50%) approach. As of March 31, 2012, the Company did not maintain any uncertain tax positions under this approach and, accordingly, all tax positions have been fully recorded in the provision for income taxes. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes. No interest or penalties associated with income taxes have been included in this calculation, or separately in the Statement of Operations and Retained Earnings, and no significant increases or decreases are expected within the following twelve-month period. Although the Company does not maintain any uncertain tax positions, tax returns remain subject to examination by the internal Revenue Service for fiscal years ending on or after September 30, 2008 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2007.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Revenue and Cost Recognition

 

The Company's revenue is recognized on the accrual basis as earned based on the date of stay. Expenditures are recorded on the accrual basis whereby expenses are recorded when incurred, rather than when paid.

 

Advertising

 

The Company follows the policy of charging the costs of non-direct advertising as incurred. Advertising expense was $23,453 and $31,500 for the six months ended March 31, 2012 and 2011, respectively. There was no advertising expense capitalized in prepaid expense.

 

Subsequent Events

 

Subsequent events have been evaluated through May 14, 2012, which is the date the financial statements were available to be issued.

 

 

 

13

 


 

 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011

PAGE 3

 

 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 

Recent Accounting Pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on the Company’s financial condition or results of their operations. Various accounting standards and interpretations were issued with effective dates subsequent to December 31, 2011. The Company has evaluated the recently issued accounting pronouncements that are effective in the current period and believes that none of them will have a material effect on the Company’s financial position, results of operations or cash flows when adopted.

 

Further, the Company is closely monitoring the joint standard-setting efforts of the Financial Accounting Standards Board and the International Accounting Standards Board. There are a large number of pending accounting standards that are being targeted for completion in 2011 and beyond, including, but not limited to, standards relating to revenue recognition, accounting for leases, fair value measurements, accounting for financial statements, disclosure of loss contingencies and financial statements presentation. Because these pending standards have not yet been finalized, at this time the Company is not able to determine the potential future impact that these standards will have, if any, on the Company’s financial position, results in operations or cash flows.

 

NOTE 2 - PISMO COAST VILLAGE RECREATIONAL VEHICLE RESORT AND RELATED ASSETS

 

At March 31, 2012, September 30, 2011 and March 31, 2011, property and equipment included the following:

 

March 31,
2012

September 30,
2011

March 31,
2011

Land

$               9,957,263 

$          9,957,263 

$             9,957,263 

Building and resort improvements

11,074,248 

10,675,136 

10,332,175 

  Furniture, fixtures, equipment and

    leasehold improvements

551,730 

536,539 

526,033 

Transportation equipment

472,478 

472,478 

472,478 

Construction in progress

54,886 

59,690 

276,780 

 

22,110,605 

21,701,106 

21,564,729 

Less: accumulated depreciation

(7,782,113)

(7,620,008)

(7,459,308)

 

$             14,328,492 

$         14,081,098 

$           14,105,421 

   

 

NOTE 3 - LINE OF CREDIT

 

The Company’s revolving line of credit for $500,000 expired on March 24, 2012. There was no outstanding amount on the line of credit at March 31, 2012 and 2011 and September 30, 2011. The Company’s line of credit is expected to be renewed in May 2012.

 

 

 

 

14

 

 

 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011

PAGE 4

 

 

NOTE 4 - NOTE PAYABLE

 

The Company secured permanent financing on the purchase of storage lot land in Arroyo Grande with Mission Community Bank. The loan was refinanced on April 6, 2006 and consolidated with a note for the purchase of another storage lot in Oceano, California. The total loan currently outstanding is $1,388,284 and was financed over a period of ten years at a variable interest rate currently at 5.00%. The lot in Oceano was formerly leased for $4,800 per month and was purchased for $925,000. The payments are currently $12,760 per month interest and principal. The Company also secured permanent financing on the purchase of another storage lot in Arroyo Grande, California with Mission Community Bank. The loan originated on May 8, 2008. The total loan currently outstanding is $2,820,797 and financed over a period of ten years at a variable interest rate currently at 5.0%. The payments are currently $15,416 per month interest and principal. The Company secured a vehicle lease with Donahue Transportation Services Corp on a 2008 Tow Truck. The loan originated on December 9, 2009. The total loan currently outstanding is $39,767 and financed over a period of seven years at an interest rate of 8.39%. The payments are currently $799 per month interest and principal.

 

For the Periods Ending March 31,

 

2013

$   135,938

2014

144,136

2015

151,774

2016

159,325

2017

1,085,461

Thereafter

2,572,213

 

$4,248,847

 

NOTE 5 - COMMON STOCK

 

Each share of stock is intended to provide the shareholder with free use of the resort for a maximum of 45 days per year. If the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.

 

A shareholder is entitled to a pro rata share of any dividends as well as a pro rata share of the assets of the Company in the event of its liquidation or sale. The shares are personal property and do not constitute an interest in real property. The ownership of a share does not entitle the owner to any interest in any particular site or camping period.

 

 

 

 

 

15

 


 

 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF MARCH 31, 2012 AND 2011 AND SEPTEMBER 30, 2011

PAGE 5

 

 

NOTE 6 - INCOME TAXES

 

The provision for income taxes is as follows:

 

March 31,
2012

March 31,

2011

Income tax benefit

$         33,300

$      34,700

 

 

The Company uses the asset-liability method of computing deferred taxes in accordance with FASB Accounting Standards Codification (ASC) Topic 740. The difference between the effective tax rate and the statutory tax rates is due primarily to the effects of the graduated tax rates, state taxes net of federal tax benefit and nondeductible variable costs of shareholder usage.

 

NOTE 7 - OPERATING LEASES

 

The Company leases two pieces of property to use as storage lots. One is leased under a seven-year agreement beginning March 1, 2006, for $4,802 based on the Consumer Price Index. The lease is scheduled to expire February 28, 2013.

 

The second lot is located in Oceano, California and is leased at $2,933 per month. The lease has converted to a month-to-month lease; however, the lessor is considering a long-term renewal at this time.

 

The Company has a five-year lease obligation for a copier. Rental expense under this operating lease is $414 per month.

 

Future minimum lease payments under the second lease and an obligation to lease equipment are as follows:

 

For the Year Ended March 31,

 

2013

$ 57,787

2014

4,965

2015

4,965

2016

4,965

2017

4,965

Thereafter

-

 

$ 77,647

 

Rent expense under these agreements was $46,409 and $46,409 for the six-months ended March 31, 2012 and 2011, respectively.

 

NOTE 8 - EMPLOYEE RETIREMENT PLANS

 

The Company is the sponsor of a 401(k) profit sharing pension plan, which covers substantially all full-time employees. Employer contributions are discretionary and are determined on an annual basis. The Company’s matching portion of the 401(k) safe harbor plan was $26,189 for the six months ended March 31, 2012. The contribution to the pension plan for the six months ended March 31, 2011 was $25,289.

 

 

 

16