Attached files
file | filename |
---|---|
EXCEL - IDEA: XBRL DOCUMENT - PISMO COAST VILLAGE INC | Financial_Report.xls |
EX-32 - EXHIBIT 32.2 - PISMO COAST VILLAGE INC | exhibit32_2.htm |
EX-32 - EXHIBIT 32.3 - PISMO COAST VILLAGE INC | exhibit32_3.htm |
EX-31 - EXHIBIT 31.3 - PISMO COAST VILLAGE INC | exhibit31_3.htm |
EX-31 - EXHIBIT 31.1 - PISMO COAST VILLAGE INC | exhibit31_1.htm |
EX-32 - EXHIBIT 32.1 - PISMO COAST VILLAGE INC | exhibit32_1.htm |
EX-31 - EXHIBIT 31.2 - PISMO COAST VILLAGE INC | exhibit31_2.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, 2014 |
|
|
|
|
| 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
Registrants 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]
1
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 issuers classes of common stock, as of the latest practicable date. 1,783
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. Accountants 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.
2
Income from retail operations for the three‑month period ended March 31, 2014, increased $30,784, or 13.2%, above the same period in 2013. The General Store revenue was down $1,620, or 1.3%, and RV Service revenue increased $32,404, or 29.4%, from the previous year. Income from Retail Operations for the six‑month period ending March 31, 2014, increased by $77,725, or 17.2%, above the same period ended March 31, 2013. The General Store was up $16,558, or 7.1%, and RV Service was up $61,169, or 28.1%. 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 positive performance in income from retail operations through the remainder of fiscal year 2014.
Operating expenses for the three‑month period ending March 31, 2014, increased $39,596, or 4.0%, above the same period ended March 31, 2013. This increase in expenses primarily reflects labor, workers compensation insurance, property tax, and water and sewer. For the six‑month period ending March 31, 2014, operating expenses increased by $142,559, or 7.2%, above the same period in 2013. This increase reflects labor, workers' compensation insurance, payroll taxes, pool repair, storage lot security, accounting, business insurance, water and sewer, electricity, and repairs and maintenance. Management continues to review and scrutinize expenses in order to maximize efficiency and profitability. Due to the age of the Resort, the Company is undertaking maintenance activity that 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, 2014, are 46.0% compared to 44.7% for the same period in 2013. For the six‑months ended March 31, 2014, Cost of Goods Sold expenses were 45.5% compared to 46.3% 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, 2014, is $39,287, compared to $47,744 for the same period in 2013. For the six‑month period ended March 31, 2014, compared to the same period in 2013, interest expense was $79,582 and $96,507, respectively. This expense reflects financing for the purchase of additional RV storage properties that closed escrow January 11, 2006, April 6, 2006, and March 5, 2008.
Income before provision for income tax for the three‑month period ended March 31, 2014, increased by $68,215, reflecting increased income in resort and retail operations compared to the previous year. For the six‑months ended March 31, 2014, income before provisions for income tax increased by $82,982, reflecting increased income from resort and retail operations and a decrease in interest expenses. 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.
4
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, 2014, 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, 2013.
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, 2014, 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
6
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, 2014 |
|
|
Signature: | /s/ RONALD NUNLIST |
| Ronald Nunlist, President and Chairman of the Board |
|
|
|
|
|
|
Date: | May 14, 2014 |
|
|
Signature: | /s/ WAYNE HARDESTY |
| Wayne Hardesty, V.P. - Finance/Chief Financial Officer |
| (principal financial officer and principal accounting officer) |
|
|
|
|
Date: | May 14, 2014 |
|
|
Signature: | /s/ JAY JAMISON |
| Jay Jamison, General Manager/Chief Executive Officer |
| (principal executive officer) |
|
|
8
PISMO COAST VILLAGE, INC. | ||||||||
BALANCE SHEETS | ||||||||
MARCH 31, 2014 AND 2013 AND SEPTEMBER 30, 2013 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2014
(Unaudited) |
| September 30, 2013 (Audited) |
| March 31, 2013 (Unaudited) | |||
|
|
| ||||||
|
|
| ||||||
ASSETS |
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents | $ | 2,412,441 |
| $ | 2,105,839 |
| $ | 2,127,293 |
Accounts receivable |
| 15,202 |
|
| 27,385 |
|
| 16,114 |
Inventory |
| 181,946 |
|
| 161,853 |
|
| 192,734 |
Current deferred taxes |
| 81,400 |
|
| 82,800 |
|
| 74,700 |
Prepaid income taxes |
| 126,100 |
|
| - |
|
| 122,800 |
Prepaid expenses |
| 79,521 |
|
| 48,136 |
|
| 48,542 |
Total current assets |
| 2,896,610 |
|
| 2,426,013 |
|
| 2,582,183 |
|
|
|
|
|
|
|
|
|
Pismo Coast Village Recreational Vehicle Resort and Related Assets |
| 14,311,207 |
|
| 14,369,564 |
|
| 14,533,532 |
|
|
|
|
|
|
|
|
|
Other Assets |
| 16,078 |
|
| 18,274 |
|
| 20,471 |
Total Assets | $ | 17,223,895 |
| $ | 16,813,851 |
| $ | 17,136,186 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses | $ | 195,838 |
| $ | 186,960 |
| $ | 246,713 |
Accrued salaries and vacation |
| 66,398 |
|
| 214,361 |
|
| 65,258 |
Rental deposits |
| 1,693,041 |
|
| 934,229 |
|
| 1,537,403 |
Income taxes payable |
| - |
|
| 121,100 |
|
| - |
Current portion of long-term debt |
| 208,024 |
|
| 202,811 |
|
| 172,403 |
Total current liabilities |
| 2,163,301 |
|
| 1,659,461 |
|
| 2,021,777 |
|
|
|
|
|
|
|
|
|
Long-Term Liabilities |
|
|
|
|
|
|
|
|
Long-term deferred taxes |
| 877,700 |
|
| 893,900 |
|
| 811,700 |
N/P Donahue Trans |
| 65,053 |
|
| 74,080 |
|
| 82,817 |
N/P Heritage Oaks Bank |
| 2,851,839 |
|
| 2,948,768 |
|
| 3,560,163 |
Total Liabilities |
| 5,957,893 |
|
| 5,576,209 |
|
| 6,476,457 |
|
|
|
|
|
|
|
|
|
Stockholders Equity |
|
|
|
|
|
|
|
|
Common stock no par value, 1,800 shares Issued, 1,783 and 1,787 shares outstanding at March 31, 2014 and 2013, respectively |
| 5,594,369 |
|
| 5,606,919 |
|
| 5,606,919 |
Retained earnings |
| 5,671,633 |
|
| 5,630,723 |
|
| 5,052,810 |
Total stockholders equity |
| 11,266,002 |
|
| 11,237,642 |
|
| 10,659,729 |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders Equity | $ | 17,223,895 |
| $ | 16,813,851 |
| $ | 17,136,186 |
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral party of these financial statements.
10
PISMO COAST VILLAGE, INC. | |||||
STATEMENTS OF CASH FLOWS (Unaudited) | |||||
SIX MONTHS ENDED MARCH 31, 2014 AND 2013 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
| 2013 | ||
Cash Flows From Operating Activities |
|
|
|
|
|
Net Income | $ | 136,360 |
| $ | 93,278 |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
Depreciation and amortization | $ | 181,852 |
| $ | 169,117 |
Decrease in accounts receivable |
| 12,183 |
|
| 4,433 |
Increase in inventory |
| (20,093) |
|
| (34,939) |
(Increase) Decrease in current deferred taxes |
| 1,400 |
|
| (1,100) |
Increase in prepaid income taxes |
| (126,100) |
|
| (19,000) |
Increase in prepaid expenses |
| (31,385) |
|
| (8,366) |
Decrease in other assets |
| 2,196 |
|
| 2,195 |
Increase in accounts payable and accrued expenses |
| 8,879 |
|
| 96,198 |
Decrease in accrued salaries and vacation |
| (147,963) |
|
| (118,064) |
Increase in rental deposits |
| 758,812 |
|
| 654,833 |
Income taxes payable |
| (121,100) |
|
| - |
Increase (decrease) in deferred taxes |
| (16,200) |
|
| 14,900 |
Total adjustments |
| 502,481 |
|
| 760,207 |
|
|
|
|
|
|
Net cash provided by operating activities |
| 638,841 |
|
| 853,485 |
|
|
|
|
|
|
Cash Flows Used in Investing Activities |
|
|
|
|
|
Capital expenditures |
| (123,495) |
|
| (475,350) |
Net cash used in investing activities |
| (123,495) |
|
| (475,350) |
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
Redemption of Stock |
| (108,000) |
|
| - |
Principal payments on notes payable |
| (100,744) |
|
| (83,777) |
Net cash (used in) financing activities |
| (208,744) |
|
| (83,777) |
|
|
|
|
|
|
Net increase in cash and cash equivalents |
| 306,602 |
|
| 294,358 |
|
|
|
|
|
|
Cash and Cash Equivalents Beginning of Period |
| 2,105,839 |
|
| 1,832,935 |
|
|
|
|
|
|
Cash and Cash Equivalents End of Period | $ | 2,412,441 |
| $ | 2,127,293 |
|
|
|
|
|
|
Schedule of Payments of Interest and Taxes |
|
|
|
|
|
Payments for interest | $ | 79,582 |
| $ | 96,507 |
Payments for income tax | $ | 247,000 |
| $ | 71,387 |
|
|
|
|
|
|
The accompanying notes are an integral part of these financial statements.
12
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2014 AND 2013 (Unaudited) AND SEPTEMBER 30, 2013 (Audited)
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, 2014, 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, 2010 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2009.
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 response advertising as incurred. Advertising expense was $13,966 and $21,362 for the six months ended March 31, 2014 and 2013, respectively. There was no advertising expense capitalized in prepaid expense.
Subsequent Events
Subsequent events have been evaluated May 12, 2014, which is the date the financial statements were available to be issued.
14
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2014 AND 2013 (Unaudited) AND SEPTEMBER 30, 2013 (Audited)
PAGE 4
NOTE 4 - NOTE PAYABLE
The Company secured permanent financing on the purchase of storage lot land in Arroyo Grande, California, with Heritage Oaks 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 $313,505 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 with Heritage Oaks Bank. The loan originated on May 8, 2008. The total loan currently outstanding is $2,728,594 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 $26,211 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. The Company secured a lease, which has been classified as a capital lease and included with notes payable. The capital lease is with Donahue Transportation Service Corp on a 2013 Hino Truck. The lease originated on May 10, 2012. The balance currently outstanding is $56,606 and is financed over a period of seven years at an interest rate of 4.751%. The payments are currently $1,046 per month interest and principal.
At March 31, 2014, future minimum payments are as follows:
For the Periods Ending March 31, |
|
|
2014 | $ | 208,024 |
2015 |
| 218,566 |
2016 |
| 101,250 |
2017 |
| 69,295 |
2018 |
| 2,527,781 |
Thereafter |
| - |
Total | $ | 3,124,916 |
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.
16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2014 AND 2013 (Unaudited) AND SEPTEMBER 30, 2013 (Audited)
PAGE 5
NOTE 6 - INCOME TAXES
The provision for income taxes is as follows:
|
March 31,
2014 |
| March 31, 2013 | ||
|
| ||||
Income tax expense | $ | 106,100 |
| $ | 66,200 |
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 a lot in Oceano, California, to use as storage lot 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.
At March 31, 2014, future minimum lease payments to lease equipment are as follows:
For the Period Ended March 31, |
|
|
2015 | $ | 4,965 |
2016 |
| 4,965 |
2017 |
| 4,965 |
2018 |
| - |
2019 |
| - |
Thereafter |
| - |
Total | $ | 14,895 |
Rent expense under these agreements was $17,990 and $41,837 for the six-month period ended March 31, 2014 and 2013, 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 Companys matching portion of the 401(k) safe harbor plan was $27,282 for the six months ended March 31, 2014. The contribution to the pension plan for the six months ended March 31, 2013 was $25,724.
17