UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,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 DecemberMarch 31, 2008
or2009
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Numberfile number 0-8463
PISMO COAST VILLAGE, INC.
------------------------------------------------------- -----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-2990441
- ------------------------------- -----------------------------------------
(State or other jurisdiction of (IRS(I.R.S. Employer
incorporation or organization) Identification Number)No.)
165 South Dolliver Street, Pismo Beach, California 93449
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(Address of principal executive offices) (Zip Code)
(805) 773-5649
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(Registrant's telephone number, including area code)
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(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 Exchange 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 [ ]
1
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 [ ] 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 [ ] Non-accelerated filer
[ ] 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 [ ] YesNo [X]
NoAPPLICABLE 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: 1,790
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'Accountant's Review Report
2. Balance Sheets
3. Statement of Income and Retained Earnings
4. Statement 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 Paulden McCown Starbuck
Thornburgh and Keeter 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.
2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.OPERATIONS
STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included herein contains statements that may
be considered forward-looking statements, within the meaning of Section 21E of the Securities
Exchange Act of 1934, 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.
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. Site
occupancy is down slightly due to weather and fifty-one sites
being closed for three months due to construction. Occupancy
projections look strong and equal to last year throughout the
remainder of the fiscal year. Revenues from ancillary operations
such as the 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 this trend will continue
throughout the remainder of the fiscal year.
RV storage continues strong demand with a waiting list in
anticipation of the new RV storage property. 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.
3
After years with no debt, the Board of Directors approved
expansion of the RV storage program and understood this
investment would require substantial financing. Management has
made it a high priority to effect timely construction and
successful marketing in order to maximize return on this
investment.
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 2008 the
resort was the only industry rated "A" park in California 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
DecemberMarch 31, 2009, decreased $35,553, or 3.9%, below the same period
in 2008. This decrease in income reflects the period's absence of
Spring Break. Spring Break, a high occupancy period of
approximately two weeks, floats between March and April depending
on the year. In 2008 Spring Break fell within March, whereas, in
2009 Spring Break fell in April, the subsequent quarter. Spring
Break occupancy and business activity favorably impacts all
resort revenue sources. Regardless of a $30,128, or 14.7%,
increase in RV storage revenue, resort income was down $61,896,
or 9.7%, as compared to the same quarter of the prior year due to
lower occupancy. Resort Operations Income for the six-months
ended March 31, 2009, increased $103,503,$67,950, or 11.7%3.8%, from the same
period in 2007.ended March 31, 2008. This increase is due primarily due to an
increase of $43,925, or 10.4%, in RV storage activity, and a
$84,533,$22,636, or 14.5%1.8%, increase in site revenue. It should be noted
that while paid site occupancy was down 7.2% compared to the
previous year, site rental income reflecting nightlyrevenue increased due to a 10% rate
adjustmentsincrease effective October 1, 2008. Site
occupancy increased slightly at 0.4% over the previous year. RV storage
activity increased $15,404, or 5.6%, over the same period in 2008.
Income from retail operations increased by $1,842 for the three-month period
ended December 31, 2008, 0.8% above the same period in 2007. The General Store
showed a $7,261, or 5.5%, decrease in revenue, while RV Service and Repair
increased revenue 9.2%, or $9,103. Management feels the General Store's
decrease in revenue reflects resort guests' reduced discretionary spending as
a symptom of the overall economy. The increase in RV Service and Repair is
reflecting management's efforts to market services and retail merchandise, and
improve customer relations.
The Company anticipates continued slight to
moderate growth in both income from resort operationssite rental and in retail operations.
Interest income decreased $171RV storage
through the remainder of Fiscal Year 2009.
4
Income from Retail Operations for the three-month period ended
DecemberMarch 31, 2008, compared to2009, decreased $43,626, or 17.9%, below the same
period in 2007.2008. The General Store revenue was down $35,479, or
25.7%, and RV Service revenue was down $8,148, or 7.7%, from the
previous year. This decrease was primarily due to the absence of
Spring Break falling within the reporting period. Income from
Retail Operations for the six-month period ending March 31, 2009,
decreased by $41,784, or 8.8%, over the same period ended March
31, 2008. This decrease is a reflectionresult of Spring Break falling
outside the year to date reporting period. Disregarding the
impact of Spring Break on comparing the six-months ended March
31, 2009 and 2008, management regards 2009 retail revenue as
satisfactory considering the overall state of the current interest rate being received.economy,
specifically in retail. Management continues to place importance
upon ongoing review of retail product mix, attention to service,
and staff training. The Company continues to maintain
cash reservesanticipates flat performance in
anticipationincome from retail operations through the remainder of major capital expenditures.Fiscal
Year 2009.
Operating expenses for the three-month period ending DecemberMarch 31,
2008,2009, decreased $15,737, or 1.8%, below the same period ended
March 31, 2008. This decrease in expenses primarily reflects
accounting, natural gas, insurance, and legal expenses. For the
six-month period ending March 31, 2009, operating expenses
increased $26,423,by $10,686, or 3.1%0.6%, above the same period ended December 31, 2007.in 2008.
This increase reflects an increasepayroll, tree trimming, storage lot
maintenance, printing, and advertising. Management continues to
review and scrutinize expenses in labororder to maximize efficiency
and tree trimming. Other operating costs
remain consistent withprofitability during this volatile economy. Due to the prior yearage of
the Resort, the Company is undertaking maintenance activity which
is considered necessary in order to continue providing quality
facilities and are considered well managed to
create an effective operation.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-month periodthree-months ended DecemberMarch 31, 2007,2009, are 48.2%46.0% compared to
49.3%57.3% for the same period in 2007, which is2008. For the six-months ended March
31, 2009, Cost of Goods Sold expenses were 47.3% compared to
53.4% 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, 2009, is
$64,274, compared to $39,304 for the same period in 2008. For the
six-month period ended March 31, 2009, compared to the same
period in 2008, interest expense was $130,923 and $83,086
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.
5
Income before provisions for income tax for the three-month
period ended DecemberMarch 31, 2008, was
$66,649, compared to $43,782, for2009, decreased by $38,314, reflecting
decreased income and increased interest expense. For the same period ending 2007. The current
balance reflects the notes payable as a result of purchasing property in May
2008, as well as property purchased February and April of 2006 to increase RV
storage. The Company has also maintained a $500,000 line of credit which
currently has no outstanding balance as of Decembersix
months ended March 31, 2008.
Income2009, income before provisions for income
taxes for the three-month period ended
December 31, 2008,tax increased by $56,962 over$18,648 reflecting increased resort income and
decreased cost of goods. 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 same period in 2007. This
increaseBoard of is a result of increased income from operations.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 asat 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.
LIQUIDITY
The Company plans capital expenditures of approximately
$1,280,000 in Fiscal Year 2009 to further enhance the resort
facilities and services. These
projectsProjects completed include: upgradereconstruct
fifty-one campsites, replace the primary electric switchgear,
renovate swimming pool facility, and road paving. RV storage
property development road paving, pool renovation, and
a trailer tow truck.is expected to be completed during the
fourth quarter of fiscal year 2009. 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.
The Company's current cash position including Certificates of Deposits, as of DecemberMarch 31, 2008,2009, is
$1,276,951,$1,644,549, which is 3.7% less10.6% more than the same position in 2007.2008.
This decreaseincrease in cash reflects increased rental deposits, capital
expenditures, and last year's redemption of Company stock. The
present level of cash is primarily duebeing maintained in anticipation of
large capital expenditures. Management is planning and
implementing long term renovations to the Company's capital expenditures inResort property which
includes redesigning sites and utilities to accommodate the first quarterneeds
of fiscal year 2009. The Company has maintained cash
balances in anticipation for large capital expenditures necessary to upgrade
the resort. The Company has also maintained a line of credit of $500,000 to
insure funds will be available, if required.modern recreational vehicles.
6
Accounts payable and accrued liabilities decreased $13,117increased $71,529, or
51.4%, from the same period last year. This reflects the
financial activity during this period compared to last year
relative to the Company's capital projects which were ongoing at
this time. All undisputed payables have been paid in full
according to the Company's policy.
Expenditures are consistent with prior years'The Company has consistently demonstrated an ability to optimize
revenues developed from the resort and retail operations and are expected to
provide adequate resources to support the amounts committed to complete the
authorized capital projects 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. Fourth Quarter site
occupancyyear, with more than
40% being produced during the fourth quarter. The third and
storage fillfourth quarters' occupancies are expected to be consistent with
that of the past year. Capital projects are designed to enhance the marketabilityyears.
The Company has also renewed a $500,000 line of the
camping sites and enhance support facilities. Capital projects not completed
prior to our busy season will be completed after Labor Day.credit in
anticipation of large capital expenditures or emergencies.
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-KSB,10-K, quarterly reports on Form 10-Q, current reports on Form
8-KSB,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.
The public may read and copy any of the materials filed with the
Securities and Exchange Commission 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 DISCLOSURESDISCLOSURE ABOUT
MARKET RISK.
Not Applicable.
7
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 DecemberMarch 31, 2008,2009, 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-KSB for the year ended September 30,
2008.
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
Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the
Securities and Exchange Commission'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 Securities Exchange Act
of 1934 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 Exchange Act) during the threesix
months ended DecemberMarch 31, 20082009 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.PROCEEDS
Not Applicable
8
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting for the shareholders of Pismo Coast Village, Inc. was held
Saturday, January 17, 2009, at 9:00 a.m. at the South County Regional Center,
800 West Branch Street, Arroyo Grande, California 93420. At that meeting, the
following Directors were elected to serve until the annual meeting in January
2010, or until successors are elected and have qualified. Following each
elected Director's name is the total number of votes cast for that Director:
Benedict, Louis 614
Brittain, Kurt 621
Buchaklian, Harry 621
Enns, Rodney 614
Eudaly, Douglas 762
Fischer, William 612
Gould, Norman 594
Hardesty, Wayne 599
Harris, R. Elaine 678
Hearne, Dennis 605
Hickman, Glenn 597
Hughes, Terris 623
Nelson, Garry 633
Nunlist, Ronald 610
Pappi, Jr., George 638
Pettibone, Jerald 656
Willems, Gary 632
Williams, Jack 628
Further, the following additional matters were voted upon at the meeting, and
the number of affirmative votes and negative votes last with respect to each
such matter is set forth below:
Proposal to approve the selection of Brown Armstrong Paulden McCown Starbuck
Thornburgh and Keeter Accountancy Corporation to serve as independent
certified public accountants for the Company for Fiscal Year 2008-2009:
Affirmative Votes Negative Votes Abstains
616 1 17
Not Applicable
ITEM 5. OTHER INFORMATION
The annual meeting of the shareholders of Pismo Coast Village, Inc. was held
Saturday, January 17, 2009, at 9:00 a.m. at the South County Regional Center,
800 West Branch Street, Arroyo Grande, California 93420. Following that
meeting, the newly elected Board held a reorganizational meeting at which the
following officers were elected to serve until the next Annual Shareholders'
Meeting:
President Jerald Pettibone
Executive Vice President Glenn Hickman
V.P. - Finance/Chief Financial Officer Jack Williams
V.P. - Operations Ronald Nunlist
V.P. - Secretary Kurt Brittain
Assistant Corporate Secretary Jay Jamison
Not Applicable
ITEM 6. EXHIBITS
Exhibit Sequential
Exhibit
Number Item Description 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 (Jerald Pettibone,
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).
31.3 Certification Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (Jack Williams, Chief Financial 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 (Jerald Pettibone, President).
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).
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).
32.1 Certification Pursuant to 18 U. S. C. Subsection
1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Jerald Pettibone,
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).
9
SIGNATURES
----------
Pursuant toIn accordance with 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.
Date: FEBRUARY 10,May 14, 2009
Signature: JERALD PETTIBONE
Jerald Pettibone, President and Chairman of the Board
Date: FEBRUARY 10,May 14, 2009
Signature: JACK WILLIAMS
Jack Williams, V.P. - Finance/Chief Financial Officer
(principal financial officer and principal
accounting officer)
Date: FEBRUARY 10,May 14, 2009
Signature: JAY JAMISON
Jay Jamison, General Manager/Chief Executive Officer
(principal executive officer)
10
REPORT OF INDEPENDENT REGISTERED
--------------------------------
PUBLIC ACCOUNTING FIRM
----------------------
To the Board of Directors
Pismo Coast Village, Inc.
Pismo Beach, California
We have reviewed the accompanying balance sheetsheets of Pismo Coast
Village, Inc. as of DecemberMarch 31, 20082009 and 2007,2008, and the related
statements of income and retained earnings and cash flows for the
three month periodand six month periods ended DecemberMarch 31, 20082009 and 2007.2008.
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 PAULDEN
McCOWN STARBUCK THORNBURGH & KEETER
ACCOUNTANCY CORPORATION
Bakersfield, California
February 10,May 14, 2009
11
PISMO COAST VILLAGE, INC.
-------------------------
BALANCE SHEETS
--------------
DECEMBERMARCH 31, 20082009 AND 20072008 AND SEPTEMBER 30, 2008
-----------------------------------------------------------------------------------------------
DecemberMarch 31, September 30, DecemberMarch 31,
--------- ------------- ---------
2009 2008 2008
2007---- ---- ----
(Unaudited) (Audited) (Unaudited)
----------- ---------- -----------
-----------ASSETS
------
ASSETS
------
Current Assets
- --------------
Cash and cash equivalents $ 1,183,1541,644,549 $ 1,253,540 $ 1,227,6251,486,615
Investment in certificate
of deposit 93,797 93,819 98,3814,988
Accounts receivable 27,36634,252 43,298 67,26122,463
Inventory 115,045149,471 116,967 130,510131,464
Current deferred tax assets 63,000taxes 62,600 63,400 62,30062,000
Prepaid income taxes 178,400112,600 189,800 107,09566,500
Deposits with others 50,768
Prepaid expenses 49,11842,210 19,441 83,03924,709
----------- ----------- -----------
Total current assets 1,709,8802,045,682 1,780,265 1,776,2111,849,507
Pismo Coast Village Recreational
- --------------------------------
Vehicle Resort and Related Assets -
- -----------------------------------
Net of accumulated
depreciation 13,210,67713,629,979 13,227,167 10,030,07410,236,617
Other Assets 39,13938,041 40,236 19,46018,944
- ------------ ----------- ----------- -----------
Total Assets $14,959,696$15,713,702 $15,047,668 $11,825,745$12,105,068
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
December 31, September 30, December 31,
2008 2008 2007
(Unaudited) (Audited) (Unaudited)
----------- ----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
-
------------------------------------
Current Liabilities
- -------------------
Accounts payable and
accrued liabilitiesexpenses $ 142,902210,716 $ 178,270 $ 156,019139,187
Accrued salaries and& vacation 52,44651,799 155,041 36,02237,708
Rental deposits 769,1581,461,591 784,152 819,573
Income taxes payable - - -1,313,909
Current portion of
long-term debt 459,98599,577 444,561 179,149189,866
----------- ----------- -----------
Total current liabilities 1,424,4912,009,528 1,562,024 1,190,7631,680,670
Long-Term Liabilities
- ---------------------
Long-term deferred taxes 334,000331,800 336,200 263,100
N/P Santa Lucia Bank 4,550,959261,700
Note payable 4,898,861 4,578,195 1,952,6351,935,374
----------- ----------- -----------
Total liabilities 6,309,4507,054,344 6,476,419 3,406,4983,877,744
----------- ----------- -----------
Stockholders' Equity
- --------------------
Common stock - no par value,
1,800 shares issued,
1,790 shares outstanding 5,616,332 5,616,332 5,647,7085,616,332
Retained earnings 3,033,9143,043,026 2,954,917 2,771,5392,610,992
----------- ----------- -----------
Total stockholders' equity 8,650,2468,659,358 8,571,249 8,419,2478,277,324
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $14,959,696$15,713,702 $15,047,668 $11,825,745$12,105,068
=========== =========== ===========
The accompanying notes are an integral part of these financial statements.
12
PISMO COAST VILLAGE, INC.
-------------------------
STATEMENTS OF INCOMEOPERATIONS AND RETAINED EARNINGS
----------------------------------------------
(UNAUDITED)
-----------
THREE AND SIX MONTHS ENDED DECEMBERMARCH 31, 2009 AND 2008
AND 2007
-----------------------------------------------------------------------------------------------
Three Months Six Months
------------ ----------
Ended March 31, Ended March 31,
---------------------- ----------------------
2009 2008 2007
---------- ----------2009 2008
---- ---- ---- ----
Income
- ------
Resort operations $ 988,247879,223 $ 884,744914,776 $1,867,470 $1,799,520
Retail operations 232,703 230,861199,884 243,510 432,587 474,371
---------- ---------- ---------- ----------
Total income 1,220,950 1,115,6051,079,107 1,158,286 2,300,057 2,273,891
---------- ---------- ---------- ----------
Cost and Expenses
- -----------------
Operating expenses 883,434 857,011840,572 856,309 1,724,006 1,713,320
Cost of goods sold 112,296 113,86192,062 139,477 204,358 253,338
Depreciation 72,766 72,27972,773 76,756 145,539 149,035
---------- ---------- ---------- ----------
Total cost and
expenses 1,068,496 1,043,1511,005,407 1,072,542 2,073,903 2,115,693
---------- ---------- ---------- ----------
Income from
operations 152,454 72,45473,700 85,744 226,154 158,198
---------- ---------- ---------- ----------
Other Income (Expense)
- ----------------------
Interest and
dividend income 2,792 2,9631,932 3,232 4,724 6,195
Interest expense (66,649) (43,782)(64,274) (39,304) (130,923) (83,086)
---------- ---------- ---------- ----------
Total other
income (expense) (63,857) (40,819)(62,342) (36,072) (126,199) (76,891)
---------- ---------- ---------- ----------
Income Before Provision
for Income Taxes 88,597 31,635
- ----------------------------------------Tax 11,358 49,672 99,955 81,307
Income Tax Expense
9,600 14,305
- ------------------(Benefit) 2,246 (38,405) 11,846 (24,100)
---------- ---------- ---------- ----------
Net Income 78,997 17,330
- ----------(Loss) $ 9,112 $ 88,077 88,109 105,407
========== ==========
Retained Earnings
- -----------------
Beginning of Periodperiod 2,954,917 2,754,209
- --------------------------------------- ---------- ----------
Retained Earnings -EndRedemption of stock (248,624)
End of period $3,033,914 $2,771,539
- --------------------------------$3,043,026 $2,610,992
========== ==========
Net IncomeIncome/(Loss)
Per Share $ 44.135.09 $ 9.63
- --------------------49.21 $ 49.22 $ 58.89
========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
13
PISMO COAST VILLAGE, INC.
-------------------------
STATEMENTS OF CASH FLOWS (UNAUDITED)
------------------------------------
THREESIX MONTHS ENDED DECEMBERMARCH 31, 2009 AND 2008
AND 2007
-------------------------------------------------------------------------------------
2009 2008
2007
-------------------- --------------------
---------------------- ----------------------
Cash Flows From Operating Activities
- ------------------------------------
Net Incomeincome $ 78,99788,109 $ 17,330105,407
Adjustments to reconcile net
incomeloss to net cash used inprovided by
operating activities:
Depreciation $ 72,766145,538 $ 72,279149,035
Decrease (increase) in
certificates of deposit 22 (93,514)
Decrease (increase) in
accounts receivable 15,932 (32,018)
Decrease (increase)9,046 12,780
Increase in inventory 1,922 (21,224)(32,504) (22,178)
Decrease (increase) in current
deferred tax asset (1,800) (500)
Increasetaxes 800 500
Decrease (Increase) in
prepaid income taxes 11,400 (82,690)77,200 (66,500)
Increase in prepaid expenses (29,677) (83,039)(22,769) (304)
Increase (decrease)in deposits with
others (50,768)
Decrease in other assets 2,195 1,032
Increase in accounts payable
and accrued liabilities (35,368) 34,009
Increase (decrease)expenses 32,447 17,178
Decrease in accrued salaries
and vacation (102,595) (121,442)
Decrease (increase)(103,242) (119,756)
Increase in rental deposits (14,994) 56,430677,439 550,766
Increase (decrease)(Decrease) in income
taxes payable - (79,100)
(Decrease) deferred taxes (4,400) (2,100)
---------- ---------
Total adjustments (82,392) (350,809)781,750 390,585
---------- ----------
Net cash used inprovided by
operating activities (3,395) (333,479)869,859 495,992
Cash Flows From Investing Activities
- ------------------------------------
Capital expenditures (55,179) (17,558)
-------- --------(548,351) (301,374)
Decrease in investment in
certificate of deposit 93,819 (121)
---------- ----------
Net cash used in
investing activities (55,179) (17,558)(454,532) (301,495)
Cash Flows From Financing Activities
- ------------------------------------
Redemption of stock (280,000)
Principal repayments ofpayments on note
payable (11,812) (6,679)
-------- --------(24,318) (13,223)
----------- ---------
Net cash used in
financinginvesting activities (11,812) (6,679)(24,318) (293,223)
---------- ---------------------
Net increase (decrease) in cash and&
cash equivalents (70,386) (357,716)391,009 (98,726)
Cash and Cash Equivalents -
Beginning
- ----------------------------------------------------------------
Beginning of Period 1,253,540 1,585,341
---------------------------- ---------- ----------
Cash and Cash Equivalents -
- ---------------------------
End of Period $1,183,154 $1,227,625
- -----------------------------------------$1,644,549 $1,486,615
------------- ========== ==========
Schedule of Payments of Interest and& Taxes
- ----------------------------------------------------------------------------------
Payments for interest $ 130,923 $ 83,086
Payments for income tax $ -(61,754) $ 201,000
Cash paid for interest $ 66,649 $ 43,782123,092
The accompanying notes are an integral part of these financial statements.
14
PISMO COAST VILLAGE, INC.
-------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 -------------------------------------------------(AUDITED)
--------------------------------------------------------------------
Note 1 - Summary of Significant Accounting Policies
- ---------------------------------------------------
A. 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.
B. 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.
C. Depreciation and Amortization
- -----------------------------
Depreciation of property and equipment is computed using the straight linean 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 parkresort improvements 5 to 40 years
Furniture, fixtures, equipment and
leasehold improvements 35 to 31.5 years
Transportation equipment 5 to 10 years
D. Earnings (Loss) Per Share
-------------------------- ------------------
The earnings (loss) per share reported on the financial statements are based on the
1,790 shares issued and
outstanding. E.The financial statements report only basic earnings
per share, as there are no potentially dilutive shares 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 a maturitymaturities of three
months or less when purchased, to be cash equivalents.
F. Concentration of Credit Risk
- ----------------------------
At DecemberMarch 31, 2008,2009, the Company had cash deposits in excess of the $250,000$100,000
federally insured limit with Santa Lucia Bank of $1,087,692;$1,487,733, however, the
Company has an Excess Deposit Insurance Bond which secures deposits up to
$1,500,000.
15
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
PAGE 2
- ------
Note 1 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------------------
G. 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.
H. 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.
I. Advertising
- -----------
The Company follows the policy of charging the costs of non-direct response
advertising
as incurred. Advertising expense was $9,330$20,473 and $10,619$19,999 for the threesix months
ended DecemberMarch 31, 20082009 and 2007,2008, respectively. There was no advertising expense
capitalized in prepaid expense.
J. New Accounting Pronouncements
- -----------------------------
Standards Adopted:
- ------------------
In September 2006, the FASB issued SFAS 157, "FairFair Value Measurements".Measurements. SFAS 157
defines fair value, establishes a framework for measuring fair value under
GAAP, and expands disclosures about fair value measurements. SFAS 157No.157
emphasizes that fair value is a market-based measurement, not an entity-specificentity-
specific measurement, and states that a fair value measurement should be
determined based on assumptions that market participants would use in pricing
the asset or liability. The Company has adopted the new standard beginning the
first quarter of 2008.
In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Liabilities - Including an amendment of FASB statementStatement
No. 115." SFAS 159 permits entities to choose to measure certain financial
assets and liabilities at fair value (the "fair value option"). Unrealized
gains and losses, arising subsequent to adoption, are reported in earnings.
The Company has adopted the new standard beginning the first quarter of 2008.
16
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
PAGE 3
- ------
Note 1 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------------------
J. New Accounting Pronouncements (Continued)
- -----------------------------------------
In December 2007, the FASB issued SFAS No. 141(R), Business Combinations,
which expands the information that a reporting entity provides in its
financial reports about a business combination and its effects. This Statement
establishes principles and requirements for how the acquirer recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any non-controllingnoncontrolling interest in the acquiree,
recognizedrecognizes and measures the goodwill acquired in the business combination or a
gain from a bargain purchase, and determines what information to disclose to
enable users of the financial statements to evaluate the nature and financial
effects of the business combination. This Statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. An entity may not apply it before that date. We may experience a
financial statement impact depending on the nature and extent of any new
business combinations entered into after the effective date of SFAS No.
14(R)141(R); however none are expected at this time.
In December 2007, FASB issued SFAS No. 160, which amends Accounting Research
Bulletin (ARB) No. 51 and (1) establishes standards of accounting and
reporting on non-controllingnoncontrolling interests in consolidated statements, (2) provides
guidance on accounting for changes in the parent's ownership interest in a
subsidiary, and (3) establishes standards of accounting of the deconsolidation
of a subsidiary due to the loss of control. The amendments to ARB No. 51 made
by SFAS No. 160 are effective for fiscal years (and interim period within
those years) beginning on or after December 15, 2008. The Company does not
expect the adoption of this statement to have an impact on its financial
statements.
In January 2008, the SEC issued Staff Accounting Bulletin (SAB) No. 110, which
amends SAB No. 107. In March 2005, the SEC issued Staff Accounting Bulletin
(SAB) No. 107 in which, among other matters, the Staff expressed its views
regarding the valuation of share-based payment arrangements. Specifically, SAB
No. 107 provided a simplified approach for estimating the expected term of a
"plain vanilla" option, which is required for application of the Black-Scholes-MertonBlack-
Scholes-Merton model (and other models) for valuing share options. At thisthe
time, the Staff acknowledged that, for companies choosing not to rely on their
own historical option exercise data, information about exercise patterns with
respect to plain vanilla options granted by other companies might not be
available in the near term; accordingly, in SAB No. 107, the Staff permitted
use of a simplified approach for estimating the term of plain vanilla options
granted on or before March 31, 2007.2008. The information concerning exercise
behavior that the Staff contemplated would be available by such date has not
materialized for many companies. Thus, in SAB No. 110, the Staff continues to
allow use of the simplified rule for estimating the expected term of plain
vanilla options until such time as the relevant data do become widely
available. The Company does not expect the effects of this bulletin to have
any affect on its financial statements.
17
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
PAGE 4
- ------
Note 1 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------------------
J. New Accounting Pronouncements (Continued)
- -----------------------------------------
In March 2008, the FASB issued SFAS No. 161, Disclosures"Disclosures about Derivative
Instruments and Hedging Activities an amendment of FASB Statement No. 133,133",
which changes the disclosure requirements for derivative instruments and
hedging activities. Enhanced disclosures are required to provide information
about (a )(a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity's financial position,
financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning
after November 15, 2008, with early application encouraged. The Company does
not expect the effects of this bulletin to have any affect on its financial
statements.
Note 2 - Pismo Coast Village Recreational Vehicle Resort and Related Assets
- ---------------------------------------------------------------------------
At DecemberMarch 31, 2008,2009, September 30, 2008 and DecemberMarch 31, 2007,2008, property and
equipment included the following:
DecemberMarch 31, September 30, DecemberMarch 31,
2009 2008 2008
2007
----------- ------------------------- -----------
Land $ 9,994,935 $ 9,994,935 $ 6,894,935
Building and resort
improvements 8,631,5528,634,856 8,612,821 8,631,5278,631,526
Furniture, fixtures,
equipment and
leasehold improvements 814,483 812,969 593,794894,891
Transportation equipment 422,938 422,938 425,936
Loan Fees - - -425,938
Construction in progress 133,659621,330 98,723 90,09971,784
----------- ----------- -----------
19,997,56720,488,542 19,942,386 16,636,29116,919,074
Less: accumulated
depreciation (6,786,890)(6,858,563) (6,715,219) (6,606,217)(6,682,457)
----------- ----------- -----------
$13,210,677$13,629,979 $13,227,167 $10,030,074$10,236,617
=========== =========== ===========
18
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
MARCH 31, 2009 AND 2008 (UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- --------------------------------------------------------------------
PAGE 5
- ------
Note 3 - Line of Credit
- -----------------------
The Company has arenewed its revolving line of credit for $500,000, with Santa Lucia Bank
which expiresexpiring March
2009.2010. The interest rate is variable at one percent over West Coast Prime, with
an initial rate of 3.25 percent and an interest rate of
4.256.00 percent at DecemberMarch 31, 2008.2009. The purpose of the line of creditloan is
to augment operating cash needs in off-season months. There werewas no outstanding
amounts asamount for the line of Decembercredit at March 31, 20082009 and 20072008 and September 30,
2008.
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBER 31, 2008 AND 2007 AND SEPTEMBER 30, 2008
- -------------------------------------------------------
PAGE 5
- ------
Note 4 - Note Payable
- ---------------------
The Company secured permanent financing on the purchase of storage lot land in
Arroyo Grande with Santa Lucia Bank. The loan was refinanced on April 6, 2006
and consolidated with a note for the purchase of another storage lot in
Oceano. The total loan currently outstanding is $2,094,147$2,081,640 and was financed
over a period of ten years at a variable interest rate currently at 5.0%5.00%. The
lot in Oceano was formerlyformally 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 Santa Lucia Bank. The loan originated on May
8, 2008. The total loan currently outstanding is $2,916,795 and financed over
a period of ten years at a variable interest rate currently at 5.5%. The
payments are currently $13,625$12,203.48 per month interest only.
Principal paymentsonly, and will begin
amortizing with payment of the note payable are as follows:$17,723 beginning June 7, 2009.
Period Ending March 31,
-----------------------
Year Ending December 31,
------------------------
20092010 $ 459,985
2010 511,14999,577
2011 540,048109,064
2012 570,043114,522
2013 602,809121,105
2014 127,630
Thereafter 2,326,9104,426,540
----------
$5,010,944$4,998,438
==========
Note 5 - Common Stock
- ---------------------
Each share of stock is intended to provide the shareholder with a maximum 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.
19
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
PAGE 6
- ------
Note 6 - Income Taxes
- ---------------------
The provision for income taxes is as follows:
March 31, March 31,
2009 2008
--------- ---------
December 31, 2008 December 31, 2007
----------------- -----------------
Income tax provisionexpense (benefit) $ 9,600 $14,305$11,846 $(24,100)
======= ================
The Company uses the asset-liability method of computing deferred taxes in
accordance with Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes" (SFAS 109). SFAS 109 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. The Company has not
recorded a valuation allowance for deferred tax assets since the benefit is
expected to be realized in the following year.
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
the federal tax benefit, nondeductible variable costs of shareholder usage and
other adjustments.
The Company records uncertain income tax positions in accordance with FASB
Interpretation 48, "Accounting for Uncertain Tax Positions" (FIN 48), which
clarifies SFAS 109. FIN 48 requires, among other things, the recognition and
measurement of tax positions based on a "more likely than not" (likelihood
greater than 50%) approach. As of DecemberMarch 31, 2008,2009, the Company did not maintain
any tax positions that did not meet the "more likely than not" threshold 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, 2005 and by the California Franchise Tax Board for fiscal
years ending on or after September 30, 2004.
Note 7 - Operating Leases
- -------------------------
The Company leases two pieces of property to use as storage lots. One is
leased under a seven-yearseven year agreement beginning March 1, 20062007 for $4,802 based
on the Consumer Price Index.
The second lot is located in Oceano and is leased at $2,933 per month. The
lease has converted to a month-to-month lease,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 $432 per month.
20
PISMO COAST VILLAGE, INC.
- -------------------------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
AS OF DECEMBERMARCH 31, 2009 AND 2008 AND 2007(UNAUDITED) AND SEPTEMBER 30, 2008 (AUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
PAGE 7
- ------
Note 7 - Operating Leases (Continued)
- --------------------------------------------------------------
Future minimum lease payments under the two property leasessecond lease and thean obligation to
lease equipment are as follows:
Year Ended DecemberPeriod Ending March 31,
-----------------------
20092010 $ 62,808
2010 62,808
2011 62,808
2012 62,808
2013 58,920
2013 9,6042014 52,822
Thereafter -0-
--------
Total $256,948
========-
----------
$ 300,166
==========
Rent expense under these agreements was $23,206$46,411 and $22,638$45,766 for the three-month periodsix months
ended DecemberMarch 31, 20082009 and 2007,2008, respectively.
Note 78 - Employee Retirement Plans
- ----------------------------------
The Company is the sponsor of a 401(k) profit sharingprofit-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 $22,429 for the six months ended
March 31, 2009. The contribution to the pension plan was $11,481 and $12,739 for the threesix months ended
DecemberMarch 31, 2008 and 2007, respectively.was $21,725.
21