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 | ||
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For the quarterly period ended | |||
| 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 | (IRS Employer ID No.) incorporation or organization) |
165 South Dolliver Street, Pismo Beach, CA | 93449 |
(Address of Principal Executive Offices) |
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(805) 773-5649 |
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 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)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]
[ ] Large accelerated filer | [ ] Accelerated filer |
[ ] Non-accelerated filer | [X] Smaller reporting company |
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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. 1,775
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 Income 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.
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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 currentrecent 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 0.7%down 2% compared to this time last year primarily due to good weather conditions.rainy weather. Occupancy projections look 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 slightly improved 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 continuesand towing continue to be a majorprimary source of revenue for the Company, and has enjoyed growth of 7.3%5.1% for the quarter. At this time, RV Storage is considered at maximum capacity with a substantial waiting list. 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 thirty-four parks nationally to receive an industry rated “A” park from over 30,000 surveys for customer satisfaction in 2015.2016.
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 June 30, 2016, increased $17,000,March 31, 2017, decreased $30,295, or 1.0%2.1%, abovebelow the same period in 2015. Resort Income for the nine months ended June 30, 2016, increased $166,899,2016. This decrease in income reflects a $53,604, or 3.8%5.5%, above the same period ended June 30, 2015. Thisdecrease in site revenue, and an increase in the quarter ending June 30, 2016, is due primarily to a $23,761,of $20,864, or 7.3%5.1%, increase in RV Storage. Site rentalstorage and spotting activity. This decrease in site revenue was down 2.4% belowreflects substantial impact from rainy weather, and the same period last year due totiming of Spring Break an annual high occupancy period of two weeks, was during the previous quarter. The increase incompared to last year. Resort Operations Income for the nine-monthsix-months ended March 31, 2017, increased $39,983, or 1.4%, from the same period reflects increases in site rentalended March 31, 2016. This increase is due primarily to an increase of $102,802,$44,971, or 3.3%, and $54,480, or 5.6%5.5%, in RV storage activity for the reasons mentioned above. Management feels these increases in revenue reflect ongoing loyalty from return customers that appreciate the Resort’s location and commitment to quality guest services.activity.
Seasonal fluctuations within this industry are expected, and management projects that income for the fourth quarter will be approximately 40% of its annual revenue. This approximation is based on historical information.
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Income from Retail Operations,retail operations for the three-month period ending June 30, 2016,ended March 31, 2017, decreased $13,578,$66,658, or 3.7%22.0%, below the same period in 2015. This decrease reflects a $26,523, or 11.7%, decrease in the2016. The General Store primarily due to Spring Break, an annual high occupancy period being scheduled in the previous quarter. Therevenue was down $29,601, or 20.6%, and RV Service revenue increased by $12,945,decreased $37,409, or 9.2%23.6%, overfrom the previous year. Income from Retail Operations for the nine-monthsix-month period ending June 30, 2016, increasedMarch 31, 2017, decreased by $84,942,$100,794, or 9.6%16.6%, abovebelow the same period ended June 30, 2015. This reflects a $25,956,March 31, 2016. The General Store was down $37,003, or 5.1%13.0%, and RV Service was down $63,790, or 19.6%. The decrease in retail revenue reflects substantial rainy weather, the General Store incometiming of Spring Break, and an $110,898, or 30.1%, increaseloss of technical staff in the RV Service income.program. Management feels this increase in revenue from RV Service operations reflects current emphasis providing quality customercontinues to place importance upon ongoing review of retail product mix, attention to service, and advertising.staff training. The Company anticipates similar activitypositive performance in both income from resort operations and retail operations through the remainder of fiscal year 2016.2017.
Operating expenses for the quarterthree-month period ending March 31, 2017, decreased $36,339, or 2.9%, below the same period ended June 30, 2016, increased $111,181,March 31, 2016. This decrease in expenses primarily reflects the previous year’s tree removal and storm damage. While the current year landscaping expenses are considerably lower, other expense items such as labor, electricity, computer management, and RV storage lot maintenance are above the previous year. For the six-month period ending March 31, 2017, operating expenses decreased by $15,812, or 9.6%0.6%, frombelow the same period in 2015.2016. This increase in expense is primarily a result of labor and labor related expenses, workers’ compensation insurance, electricity, Wi-Fi, and landscaping due to tree removal. Operating expenses fordecrease reflects the nine-month period ended June 30, 2016, increased $361,849, or 10.6%, from the same period in 2015. This increase is primarily due to labor and labor related expenses, workers’ compensation insurance, landscaping due toprevious year’s tree removal credit card processing fees,and storm damage, and increases in labor, payroll taxes, pool maintenance, computer expenses, water and sewer, electricity, and resort repairs and maintenance garbage, Wi-Fi, vehicle expense,in the current year. Due to severe windstorms in the second quarter of fiscal year 2016, the Company decided to remove many mature trees to minimize risk. The tree removal and electricity.replacement created a significant expense. 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 for 2016 are within projected levels at 39.2%expenses, as a percentage of retail salesincome for the quarter and 41.3% year-to-date.three-months ended March 31, 2017, are 43.2% compared to 41.2% for the same period in 2016. For the six-months ended March 31, 2017, Cost of Goods Sold expenses were 42.3 % compared to 42.4% the previous year. These levels are well within the guidelines established by management for 2015 was 44.2%the individual category sales of RV supplies and 44.5%, respectively.General Store merchandise.
Interest Expense for the three-month and nine-month periodsthree-months ended June 30, 2016,March 31, 2017, is $25,704 and $77,641, respectively,$18,777, compared to $32,215 and $97,230 the previous year. This decrease in interest expense reflects the current interest rate, and the Company’s decision to make accelerated payments towards the note.
Net Income$25,936 for the quarter ending June 30, 2016, decreased by $191,388, or 46%, compared with the same period ending June 30, 2015.in 2016. For the six-month period ended March 31, 2017, compared to the same period in 2016, interest expense was $38,865 and $51,937, respectively. This quarterly decrease in Net 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 is primarily due to increased operating expenses, specifically tree removal, and an increase inbefore provision for income tax expense. Net Income for the nine-months ending June 30, 2016,three-month period ended March 31, 2017, decreased by $3,260,$30,984, reflecting decreased income from operations compared to the previous year. For the six-months ended March 31, 2016, income before provisions for income tax increased by $8,544, reflecting decreased interest expense. 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 0.06%, compared with the same period ending June 30, 2015. This decrease in Net Income is a result of an increase in operating expenses, specifically tree removal. The last quarter of 2016 is expected to provide adequate resources for continuing businesstowing and provide for planned capital expenditures.
Management has introduced various marketing promotions with reduced rates to increase revenues during low occupancy periods. However, duestorage 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.
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LIQUIDITY
The Company's current cash position as of June 30, 2016,March 31, 2017, is $2,387,331,$3,075,801, which is 11.5% less23.7% more than the same position in 2015.2016. This decreaseincrease is primarily due to the Company’s redemption of Company stockan increase in rental deposits, and timing ofdecrease in capital expenditures. The cash balance increased $151,524$459,131 from fiscal year ended September 30, 2015,2016, due to increasedincrease in rental deposits.deposits and timing of capital expenditures. The present level of cash is being maintained in anticipation of large capital expenditures inexpenditures. Management is planning and implementing long-term renovations to the upcoming fiscal year.Resort property, which includes redesigning sites and utilities to accommodate the needs of modern recreational vehicles and replacing restroom buildings.
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Accounts Payablepayable and accrued liabilities decreased $27,923 to an amount of $181,980 for June 30, 2016, compared to$35,333 below the same period ending 2015. This decrease was primarily due tolast year and decreased $58,868 since the 2016 fiscal year end, which reflects a timing of payment of monthly liabilities.capital projects and accrued property taxes. All undisputed payables have been paid in full according to the Company's policy.
Accounts Receivable for the period ending June 30, 2016, decreased $9,181 below June 30, 2015, and reflects overall effort by staff on collections.
The Company has consistently demonstrated an ability to optimize revenues developed from Resortthe resort and Retail Operationsretail operations during the summer season. During other lessHistorically the Company, because of its seasonal market, has produced 60% to 65% of its revenue producing periods, RV storage spaceduring the third and site rentalsfourth quarters of the fiscal year, with more than 40% being produced during the fourth quarter. The third and fourth quarters' occupancies are paid for in advance and used for Resort improvements and cash reserves. The Company has a revolving lineexpected to be consistent with that of credit for $500,000 to augment operating or capital expenditure cash needs during off-season periods. The Company considers its financial position sufficient to meet its anticipated future financial requirements. The foregoing information is forward-looking, based upon certain assumptions of future performance, which may not come to fruition.past years.
CAPITAL RESOURCES AND PLANNED EXPENDITURES
The Company plans capital expenditures of approximately $825,000$900,000 in fiscal year 20162017 to further enhance the resort facilities and services. These projects include building a new RV Service and Repair facility, purchase a new RV storage tow vehicle, purchase a new forklift, road paving,vehicles for maintenance, security, and RV Service, RV storage security, and repair the Overlook ramp. 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.
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.
Capital expenditures are consistent with prior years and operations and are expected to provide adequate resources to support the amounts committed to complete the authorized capital projects during the fiscal year. Second quarter site occupancy and storage fill are expected to be consistent with that of the past year. Capital projects are designed to enhance the marketability of the camping sites and enhance support facilities. Recognizing the age of the Resort and increased demands resulting from modern recreational vehicles, the Board has directed management to provide plans to update and improve accommodations of the Resort.
The Company redeemed eight shares during the second quarter for $27,000 each. At this time the stock has not been retired.
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 Securities and Exchange Commission on official business days during the hours of 10:00 a.m. to 3:00 p.m., 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.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not Applicable
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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 June 30, 2016,March 31, 2017, 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, 2015.2016.
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 nine-monthssix-months ended June 30, 2016,March 31, 2017 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
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ITEM 6. EXHIBITS
Exhibit No. | Description of Exhibit | Sequential Page Number |
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27 | Financial Data Schedule |
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99 | Accountant’s Review Report |
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31.1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Terris Hughes, President and Chairman of the Board) |
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31.2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Jay Jamison, Chief Executive Officer and principal executive officer) |
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31.3 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Wayne Hardesty, Chief Financial Officer, principal financial officer and principal accounting officer) |
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32.1 | Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Terris Hughes, President and Chairman of the Board) |
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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) |
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32.3 | Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Wayne Hardesty, Chief Financial Officer, principal financial officer and principal accounting officer) |
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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: AugustMAY 12, 2016
2017
Signature: /s//S/ TERRIS HUGHES
Terris Hughes, President and Chairman of the Board
Date: AugustMAY 12, 2016
2017
Signature: /s//S/ WAYNE HARDESTY
Wayne Hardesty, V.P. - Finance/Chief Financial Officer
(principal financial officer and principal accounting officer)
Date: AugustMAY 12, 2016
2017
Signature: /s//S/ JAY JAMISON
Jay Jamison, General Manager/Chief Executive Officer
(principal executive officer)
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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. (Company) as of June 30,March 31, 2017 and 2016, and 2015, and the related statements of incomeoperations and retained earnings and cash flows for the three and nine-monthsix-month periods ended June 30, 2016March 31, 2017 and 2015.2016. 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.
We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the balance sheet of the Company as of September 30, 2015,2016, and the related statements of incomeoperations and retained earnings, and cash flow for the year then ended, and in our report dated November 13, 2015,2016, we expressed an unmodifiedunqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of September 30, 2015,2016, is fairly stated, in all material respects.
BROWN ARMSTRONG ACCOUNTANCY CORPORATION
Bakersfield, California
AugustMay 12, 2016
2017
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PISMO COAST VILLAGE, INC. BALANCE SHEETS JUNE 30, 2016 AND 2015 AND SEPTEMBER 30, 2015 | ||||||||||||||||||
PISMO COAST VILLAGE, INC. BALANCE SHEETS MARCH 31, 2017 AND 2016 AND SEPTEMBER 30, 2016 | PISMO COAST VILLAGE, INC. BALANCE SHEETS MARCH 31, 2017 AND 2016 AND SEPTEMBER 30, 2016 | |||||||||||||||||
June 30, 2016 (Unaudited) | September 30, 2015 (Audited) | June 30, 2015 (Unaudited) | March 31, 2017 (Unaudited) | September 30, 2016 (Audited) | March 31, 2016 (Unaudited) | |||||||||||||
ASSETS | March 31, 2017 (Unaudited) | September 30, 2016 (Audited) | ||||||||||||||||
ASSETS | March 31, 2016 (Unaudited) | |||||||||||||||||
Current Assets | ||||||||||||||||||
Cash and cash equivalents | $ | 2,387,331 | $ | 2,235,807 | $ | 2,698,517 | $ | 3,075,801 | $ | 2,616,670 | $ | 2,485,816 | ||||||
Accounts receivable | 11,917 | 43,916 | 21,098 | 18,976 | 42,327 | 16,237 | ||||||||||||
Inventory | 228,888 | 190,442 | 194,886 | 197,280 | 191,229 | 196,024 | ||||||||||||
Current deferred income taxes | 103,300 | 103,500 | 91,500 | |||||||||||||||
Current deferred taxes | - | - | 103,400 | |||||||||||||||
Prepaid income taxes | 223,900 | - | - | 203,600 | 156,200 | 357,200 | ||||||||||||
Prepaid expenses | 10,621 | 29,034 | 59,745 |
| 39,283 |
| 23,745 |
| 25,333 | |||||||||
Deposits |
| 32,592 |
| - |
| - | ||||||||||||
Total current assets | 2,998,549 | 2,602,699 | 3,065,746 | 3,534,940 | 3,030,171 | 3,184,010 | ||||||||||||
Pismo Coast Village Recreational Vehicle Resort and Related Assets – | ||||||||||||||||||
Net of accumulated depreciation | 14,893,971 | 14,953,463 | 14,933,726 | |||||||||||||||
Net of accumulated depreciation | 14,700,319 | 14,827,813 | 14,966,062 | |||||||||||||||
Other Assets |
| 4,271 |
| 6,018 |
| 6,600 |
| 2,524 |
| 3,688 |
| 4,853 | ||||||
Total Assets | $ | 17,896,791 | $ | 17,562,180 | $ | 18,006,072 | $ | 18,237,783 | $ | 17,861,672 | $ | 18,154,925 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
Current Liabilities | ||||||||||||||||||
Current Liabilities | ||||||||||||||||||
Accounts payable and accrued expenses | $ | 181,980 | $ | 224,639 | $ | 209,903 | ||||||||||||
Accounts payable and accrued liabilities | $ | 207,614 | $ | 266,482 | $ | 242,947 | ||||||||||||
Accrued salaries and vacation | 84,495 | 284,426 | 71,039 | 77,681 | 285,679 | 76,288 | ||||||||||||
Rental deposits | 1,916,798 | 1,261,191 | 1,741,228 | 2,158,853 | 1,340,592 | 1,963,682 | ||||||||||||
Income taxes payable | - | 50,700 | 191,900 | |||||||||||||||
Current portion of long-term debt |
| 160,267 |
| 127,461 |
| 98,755 | ||||||||||||
Current portion of note payable | 99,933 | 116,048 | 95,523 | |||||||||||||||
Current portion of capital lease obligations |
| 29,901 |
| 39,856 |
| 42,991 | ||||||||||||
Total current liabilities | 2,343,540 | 1,948,417 | 2,312,825 | 2,573,982 | 2,048,657 | 2,421,431 | ||||||||||||
Long-Term Liabilities | ||||||||||||||||||
Long-term deferred income taxes | 926,600 | 928,400 | 906,900 | |||||||||||||||
Long-term deferred taxes | 822,800 | 846,200 | 927,700 | |||||||||||||||
Note payable Donahue Transportation, net of current portion | 87,960 | 36,207 | 41,208 | |||||||||||||||
Note payable RLC Funding, net of current portion | 18,860 | 28,072 | 30,942 | |||||||||||||||
Note payable Heritage Oaks Bank, net of current portion |
| 1,340,126 |
| 1,781,034 |
| 2,276,554 | ||||||||||||
N/P, net of current portion | 974,320 | 1,315,842 | 1,736,790 | |||||||||||||||
Capital lease obligations, net of current portion |
| 89,075 |
| 98,034 |
| 115,428 | ||||||||||||
Total Liabilities |
| 4,717,086 |
| 4,722,130 |
| 5,568,429 |
| 4,460,177 |
| 4,308,733 |
| 5,201,349 | ||||||
Stockholders’ Equity | ||||||||||||||||||
Common stock – no par value, 1,800 shares Issued, 1,775 and 1,783 shares outstanding at | 5,569,268 | 5,594,369 | 5,594,369 | |||||||||||||||
Common stock – no par value, 1,800 shares | 5,569,268 | 5,569,268 | 5,569,268 | |||||||||||||||
Retained earnings |
| 7,610,437 |
| 7,245,681 |
| 6,843,274 |
| 8,208,338 |
| 7,983,671 |
| 7,384,308 | ||||||
Total stockholders’ equity |
| 13,179,705 |
| 12,840,050 |
| 12,437,643 |
| 13,777,606 |
| 13,552,939 |
| 12,953,576 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 17,896,791 | $ | 17,562,180 | $ | 18,006,072 | $ | 18,237,783 | $ | 17,861,672 | $ | 18,154,925 | ||||||
The accompanying notes are an integral party of these financial statements. | The accompanying notes are an integral party of these financial statements. | The accompanying notes are an integral party of these financial statements. |
10
PISMO COAST VILLAGE, INC. STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED) THREE AND NINE MONTHS ENDED JUNE 30, 2016 AND 2015 | ||||||||||||||||||||||
PISMO COAST VILLAGE, INC. STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED) THREE AND SIX MONTHS ENDED MARCH 31, 2017 AND 2016 | PISMO COAST VILLAGE, INC. STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED) THREE AND SIX MONTHS ENDED MARCH 31, 2017 AND 2016 | |||||||||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
Income | ||||||||||||||||||||||
Resort operations | $ | 1,752,900 | $ | 1,735,090 | $ | 4,559,063 | $ | 4,392,164 | $ | 1,391,617 | $ | 1,421,912 | $ | 2,846,146 | $ | 2,806,163 | ||||||
Retail operations |
| 354,332 |
| 367,910 |
| 962,519 |
| 877,577 |
| 235,657 |
| 302,315 |
| 507,393 |
| 608,187 | ||||||
Total income |
| 2,107,232 |
| 2,103,000 |
| 5,521,582 |
| 5,269,741 |
| 1,627,274 |
| 1,724,227 |
| 3,353,539 |
| 3,414,350 | ||||||
Cost and Expenses | ||||||||||||||||||||||
Operating expenses | 1,268,935 | 1,157,754 | 3,761,138 | 3,399,289 | ||||||||||||||||||
Operating expenses | 1,211,043 | 1,247,382 | 2,476,391 | 2,492,203 | ||||||||||||||||||
Cost of goods sold | 138,786 | 162,832 | 396,384 | 390,868 | 101,754 | 124,508 | 214,702 | 257,598 | ||||||||||||||
Depreciation and amortization |
| 105,392 |
| 95,556 |
| 310,849 |
| 294,559 |
| 104,444 |
| 105,175 |
| 207,726 |
| 205,457 | ||||||
Total cost and expenses |
| 1,513,113 |
| 1,416,142 |
| 4,468,371 |
| 4,084,716 |
| 1,417,241 |
| 1,477,065 |
| 2,898,819 |
| 2,955,258 | ||||||
Income from Operations |
| 594,119 |
| 686,858 |
| 1,053,211 |
| 1,185,025 |
| 210,033 |
| 247,162 |
| 454,720 |
| 459,092 | ||||||
Other Income (Expense) | ||||||||||||||||||||||
Interest and dividend income | 1,017 | 977 | 3,536 | 2,620 | ||||||||||||||||||
Interest and dividend income | 495 | 1,509 | 2,116 | 2,519 | ||||||||||||||||||
Interest expense | (25,704) | (32,215) | (77,641) | (97,230) | (18,777) | (25,936) | (38,865) | (51,937) | ||||||||||||||
Loss on disposal of fixed assets |
| - |
| - |
| (1,551) |
| - |
| - |
| - |
| (1,304) |
| (1,551) | ||||||
Total other (expense) |
| (24,687) |
| (31,238) |
| (75,656) |
| (94,610) | ||||||||||||||
Total other income (expense) |
| (18,282) |
| (24,427) |
| (38,053) |
| (50,969) | ||||||||||||||
Net Income Before Provision for Income Tax | 569,432 | 655,620 | 977,555 | 1,090,415 | ||||||||||||||||||
Income Before Provision for Income Tax | 191,751 | 222,735 | 416,667 | 408,123 | ||||||||||||||||||
Provision for Income Tax Expense |
| 343,300 |
| 238,100 |
| 421,900 |
| 531,500 | ||||||||||||||
Income Tax Expense (benefit) |
| 79,600 |
| (800) |
| 192,000 |
| 78,600 | ||||||||||||||
Net Income | $ | 226,132 | $ | 417,520 | 555,655 | 558,915 | $ | 112,151 | $ | 223,535 | 224,667 | 329,523 | ||||||||||
Retained Earnings – Beginning of Period |
| 7,245,681 |
| 6,284,359 |
| 7,983,671 |
| 7,245,684 | ||||||||||||||
Redemption of Stock | - | - | (190,899) | - |
| - | (190,899) | |||||||||||||||
| ||||||||||||||||||||||
Retained Earnings – End of Period | $ | 7,610,437 | $ | 6,843,274 | $ | 8,208,338 | $ | 7,384,308 | ||||||||||||||
Net Income Per Share | $ | 127.40 | $ | 234.17 | $ | 313.05 | $ | 313.47 | $ | 63.18 | $ | 125.94 | $ | 126.57 | $ | 185.65 | ||||||
The accompanying notes are an integral part of these financial statements. | The accompanying notes are an integral part of these financial statements. | The accompanying notes are an integral part of these financial statements. |
11
PISMO COAST VILLAGE, INC. STATEMENTS OF CASH FLOWS (Unaudited) SIX MONTHS ENDED MARCH 31, 2017 AND 2016 | |||||||||||
2017 | 2016 | ||||||||||
Cash Flows From Operating Activities | |||||||||||
Net Income | $ | 224,667 | $ | 329,523 | |||||||
Adjustments to reconcile net income to net | |||||||||||
Depreciation and amortization | $ | 207,726 | $ | 205,457 | |||||||
Decrease in accounts receivable | 23,351 | 27,679 | |||||||||
(Increase) in inventory | (6,051) | (5,582) | |||||||||
(Increase) in current deferred taxes | (23,400) | (600) | |||||||||
(Increase) in prepaid income taxes | (47,400) | (357,200) | |||||||||
(Increase) Decrease in prepaid expenses | (15,538) | 3,701 | |||||||||
Increase (Decrease) in accounts payable and | (58,868) | 18,308 | |||||||||
(Decrease) in accrued salaries and vacation | (207,998) | (208,138) | |||||||||
Increase in rental deposits | 818,261 | 702,491 | |||||||||
(Decrease) income taxes payable |
| - |
| (50,700) | |||||||
Total adjustments |
| 690,083 |
| 335,416 | |||||||
Net cash provided by operating activities | 914,750 | 664,939 | |||||||||
Cash Flows From Investing Activities | |||||||||||
Capital expenditures | (80,371) | (218,442) | |||||||||
Loss on sale of assets | 1,304 | 1,551 | |||||||||
Net cash used in investing activities | (79,067) | (216,891) | |||||||||
Cash Flows from Financing Activities | |||||||||||
Redemption of Stock | - | (216,000) | |||||||||
Principal payments on long term debt |
| (376,552) |
| 17,961 | |||||||
Net cash used in financing activities |
| (376,552) |
| (198,039) | |||||||
Net increase in cash and cash equivalents | 459,131 | 250,009 | |||||||||
Cash and Cash Equivalents – Beginning of |
| 2,616,670 |
| 2,235,807 | |||||||
Cash and Cash Equivalents – End of Period | $ | 3,075,801 | $ | 2,485,816 | |||||||
Schedule of Payments of Interest and | |||||||||||
Payments for interest | $ | 38,865 | $ | 51,937 | |||||||
Payments for income tax | $ | 262,759 | $ | 438,000 | |||||||
The accompanying notes are an integral part of these financial statements. |
PISMO COAST VILLAGE, INC. STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED JUNE 30, 2016 AND 2015 | |||||||||||
2016 | 2015 | ||||||||||
Cash Flows From Operating Activities | |||||||||||
Net Income | $ | 555,655 | $ | 558,915 | |||||||
Adjustments to reconcile net income to net cash provided by operating | |||||||||||
Depreciation and amortization | $ | 310,849 | $ | 294,559 | |||||||
Changes in operating assets and liabilities | |||||||||||
(Increase) Decrease in accounts receivable | 31,999 | (3,108) | |||||||||
(Increase) in inventory | (38,446) | (17,477) | |||||||||
Decrease in current deferred income taxes | 200 | 1,100 | |||||||||
(Decrease) in prepaid income taxes | (223,900) | - | |||||||||
(Decrease) in prepaid expenses | 18,413 | (6,724) | |||||||||
Deposits | (32,592) | - | |||||||||
Decrease (Increase) in accounts payable and accrued expenses | (42,659) | 5,988 | |||||||||
Decrease in accrued salaries and vacation | (199,931) | (174,067) | |||||||||
Increase in rental deposits | 655,607 | 608,213 | |||||||||
(Decrease) Increase in Income taxes payable | (50,700) | 52,800 | |||||||||
(Decrease) in long term deferred income taxes |
| (1,800) |
| (11,500) | |||||||
Total adjustments |
| 427,040 |
| 749,784 | |||||||
Net cash provided by operating activities | 982,695 | 1,308,699 | |||||||||
Cash Flows Used in Investing Activities | |||||||||||
Capital expenditures | (249,610) | (569,084) | |||||||||
Net cash used in investing activities | (249,610) | (569,084) | |||||||||
Cash Flows from Financing Activities | |||||||||||
Redemption of Stock | (216,000) |
| - | ||||||||
Principal payments on notes payable |
| (365,561) |
| (70,192) | |||||||
Net cash (used in) financing activities |
| (581,561) |
| (70,192) | |||||||
Net increase (decrease) in cash and cash equivalents | 151,524 | 669,423 | |||||||||
Cash and Cash Equivalents – Beginning of Period |
| 2,235,807 |
| 2,029,094 | |||||||
Cash and Cash Equivalents – End of Period | $ | 2,387,331 | $ | 2,698,517 | |||||||
Schedule of Payments of Interest and Taxes | |||||||||||
Cash paid for interest during the period | $ | (77,641) | $ | 97,230 | |||||||
Cash paid for income taxes during the period | $ | 649,000 | $ | 490,300 | |||||||
The accompanying notes are an integral part of these financial statements. |
12
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30,MARCH 31, 2017 AND 2016 AND 2015 (Unaudited) AND SEPTEMBER 30, 20152016 (Audited)
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.NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Depreciation of property and equipmentThe Company's revenue is computed using an accelerated methodrecognized on the accrual basis as earned based on the costdate of the assets, less allowance for salvage value, where appropriate. Depreciation ratesstay. Expenditures are based upon the following estimated useful lives:
| |
| |
|
Earnings Per Share
The earnings per share reportedrecorded on the financial statementsaccrual basis whereby expenses are based on the 1,775 and 1,787 shares outstanding as of the balance sheet dates. The financial statements report only basic earnings per share as there are no potentially dilutive shares outstanding.
recorded when incurred, rather than when paid.
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.
Allowance for Doubtful Accounts
It is the policy of management to review the outstanding accountings receivable at year-end, as well as historical bad debt write-offs, and establish an allowance for doubtful accounts for estimated uncollectible accounts. Management did not believe an allowance for doubtful accounts was necessary as of March 31, 2017 and 2016.
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.
All property and equipment are recorded at cost. Depreciation of property and equipment is computed using the straight line 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 resort improvements | 5 to 40 years |
Furniture, fixtures, equipment and leasehold improvements | 5 to 31.5 years |
Transportation equipment | 5 to 10 years |
The earnings (loss) per share reported on the financial statements are based on the 1,775 and 1,775 shares outstanding as of the balance sheet dates. The financial statements report only basic earnings per share, as there are no potentially dilutive shares outstanding.
13
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The Company follows the policy of charging the costs of non-direct advertising as incurred. Advertising expense was $24,592 and $23,311 for the six months ended March 31, 2017 and 2016, respectively. There was no advertising expense capitalized in prepaid expense.
At June 30, 2016,March 31, 2017, the Company had cash deposits in excess of the $250,000 federally insured limit with Heritage Oaks Bank of $598,133;$1,206,089; however, in the past the Company has used an 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. Heritage Oaks Bank is a member of CDARS, the Certificate of Deposit Account Registry Service. Large deposits are divided into smaller amounts and placed with other FDIC insured banks, which are also members of the CDARS network. Then, those member banks issueissued CDs in amounts under $250,000, so that the entire investment is eligible for FDIC insurance.
13
PISMO COAST VILLAGE, INC.
AS OF JUNE 30, 2016 AND 2015 (Unaudited) AND SEPTEMBER 30, 2015 (Audited)
PAGE 2Subsequent Events
Subsequent events have been evaluated
NOTE 1 – NATURE OF BUSINESS (Continued)through May 12, 2017, which is the date the financial statements were available to be issued. Management did not identify any subsequent events that require disclosure.
The Company uses the asset-liability method of computing deferred taxes in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Income Taxes topic 740. FASB 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.
14
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)
PAGE 3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
FASB 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 June 30, 2016,March 31, 2017, management has considered its tax positions and believes that 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. The Company’sIt is the policy isof 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 StatementsStatement of IncomeOperations 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 Internalinternal Revenue Service for fiscal years ending on or after September 30, 20122013 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 20112012.
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 when paid.
The Company follows the policy of charging the costs of non-direct advertising as incurred. Advertising expense was $28,516 and $26,893 for the nine months ended June 30, 2016 and 2015, respectively. There was no advertising expense capitalized in prepaid expense.
Subsequent Events
Events subsequent to June 30, 2016 have been evaluated through August 12, 2016, which is the date the financial statements were available to be issued.
14
AS OF JUNE 30, 2016 AND 2015 (Unaudited) AND SEPTEMBER 30, 2015 (Audited)
PAGE 3
NOTE 23 – PISMO COAST VILLAGE RECREATIONAL VEHICLE RESORT AND RELATED ASSETS
At JuneMarch 31, 2017, September 30, 2016, September 30, 2015 and June 30, 2015,March 31, 2016, property and equipment included the following:
June 30, 2016 | September 30, 2015 | June 30, 2015 | March 31, 2017 | September 30, 2016 | March 31, 2016 | |||||||||||
Land | $ | 10,394,746 | $ | 10,394,746 | $ | 10,383,171 | $ | 10,394,746 | $ | 10,394,746 | $ | 10,394,746 | ||||
Building and resort improvements | 11,227,437 | 11,227,437 | 11,169,548 | 11,295,967 | 11,295,967 | 11,227,437 | ||||||||||
Furniture, fixtures, equipment and leasehold improvements | 710,084 | 599,355 | 613,234 | 661,380 | 661,583 | 694,354 | ||||||||||
Transportation equipment | 628,999 | 479,592 | 484,607 | 657,518 | 632,779 | 625,219 | ||||||||||
Construction in progress |
| 92,587 |
| 107,225 |
| 71,000 |
| 156,734 |
| 105,660 |
| 79,378 | ||||
23,053,853 | 22,808,355 | 22,721,560 | 23,166,345 | 23,090,735 | 23,021,134 | |||||||||||
Less: accumulated depreciation |
| (8,159,882) |
| (7,854,892) |
| (7,787,834) |
| (8,466,026) |
| (8,262,922) |
| (8,055,072) | ||||
$ | 14,893,971 | $ | 14,953,463 | $ | 14,933,726 | $ | 14,700,319 | $ | 14,827,813 | $ | 14,966,062 |
Depreciation expense was $207,726 and $205,457 for the six months ended March 31 2017 and 2016, respectively.
At March 31, 2017, September 30, 2016, and March 31, 2016, the cost of assets under capital lease was $263,077, and related accumulated depreciation was $180,323, $160,772, and $140,459, respectively. Depreciation expense on assets under capital lease was $19,551, $37,039, and $16,726 for the six months ended March 31, 2017, September 30, 2016, and March 31, 2016, respectively.
15
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)
NOTE 34 – LINE OF CREDIT
The Company has a revolving line of credit with Heritage Oaks Bank for $500,000, expiringwhich expires March 21, 2017.20, 2018. There waswere no outstanding amount foramounts on the line of credit at Juneas of March 31, 2017 and 2016 and September 30, 2016.
At March 31, 2017, September 30, 2016, September 30, 2015, and June 30, 2015.March 31, 2016, the note payable consisted of the following:
The Company secured permanent financing
March 31, 2017 (Unaudited) | September 30, 2016 (Audited) | March 31, 2016 (Unaudited) | ||||||
Note payable with Heritage Oaks | $ | 1,074,253 | $ | 1,431,890 | $ | 1,832,313 | ||
Less current portion |
| (99,933) |
| (116,048) |
| (95,523) | ||
Total | $ | 974,320 | $ | 1,315,842 | $ | 1,736,790 |
The capital lease is with Donahue Transportation Services Corp on a 2013 Hino Truck. The lease originated on May 10, 2012. The total balance currently outstanding is $33,224 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. The Company secured a lease, which has been classified as a capital lease and included with notes payable. The capital lease is with RLC Funding on a security system for Lot-K. The lease originated on November 8, 2013. The total balance currently outstanding is $30,942 and is financed over a period of five years at an interest rate of 13.537%. The payments are currently $1,295 per month interest and principal. The Company secured a vehicle lease with Donahue Transportation Services Corp on a 2015 Hino Truck. The loan originated on January 8, 2016. The total loan currently outstanding is $76,105 and financed over a period of seven years at an interest rate of 4.532%. the payments are currently $1,116 per month interest and principal.
15
For the Year Ending December 31, |
| ||
2017 |
| $ | 99,933 |
2018 |
|
| 974,320 |
| $ | 1,074,253 |
16
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30,MARCH 31, 2017 AND 2016 AND 2015(Unaudited)(Unaudited) AND SEPTEMBER 30, 2015(Audited)2016 (Audited)
PAGE
45
NOTE 46 – NOTES PAYABLE (Continued)Capital Lease Obligations
At JuneMarch 31, 2017, September 30, 2016, and March 31, 2016, capital lease obligations consisted of the following:
March 31, 2017 (Unaudited) | September 30, 2016 (Audited) | March 31, 2016 (Unaudited) | ||||||
A 2008 tow truck leased from Donahue Transportation | $ | 1,764 | $ | 5,739 | $ | 10,182 | ||
A 2013 Hino truck leased from Donahue Transportation | 25,796 | 30,469 | 35,947 | |||||
A security system for Lot-K leased from RLC Funding, | 22,034 | 28,072 | 33,717 | |||||
A 2016 Hino truck leased from Donahue Transportation |
| 69,382 |
| 73,610 |
| 78,573 | ||
Total capital lease obligations | $ | 118,976 | $ | 137,890 | $ | 158,419 |
At March 31, 2017, future minimum payments areon the capital lease obligations were as follows:
For the Year Ending December 31, |
| ||
2017 |
| $ | 35,027 |
2018 |
| 38,897 | |
2019 |
| 17,577 | |
2020 |
| 13,392 | |
2021 |
| 13,392 | |
Thereafter |
|
| 14,508 |
Present value of future minimum payments |
| 132,793 | |
Less amount representing interest |
|
| (13,817) |
| 118,976 | ||
Less current portion of capital lease obligations |
|
| (29,901) |
Total capital lease obligations, net of current portion and |
| $ | 89,075 |
For The Year Ending June 30, 2016 160,267 2017 1,376,335 2018 26,390 2019 11,628 2020 12,166 Thereafter 20,427 Total 1,607,213 $ $
17
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)
PAGE 6
Each share of stock is intended to provide the shareholder with free use of the resort for a maximum of 45 daysnights 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.
During the second quarter, the Company repurchased 8 (eight) shares of its common stock for $27,000 per share for a total of $216,000 in cash. The repurchase was recorded as a decrease in common stock of $25,101 equal to the original sale price of the shares, and a reduction of the remaining $190,899 was recorded as a reduction in retained earnings.
The provision for income taxes as of March 31, 2017 and 2016 is as follows:
June 30, 2016 | June 30, 2015 | ||||
Income tax expense | $ | 421,900 | $ | 531,500 | |
March 31, 2017 | March 31, 2016 | ||||
Income tax expense | $ | 192,000 | $ | 78,600 | |
The Company uses the asset-liability method of computing deferred taxes in accordance with FASB Accounting Standards Codification (ASC)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.
16As of March 31, 2017 and 2016, the Company’s deferred tax liability was $822,800 and $927,700, respectively. This liability is derived from temporary differences in the timing of recognition of certain expenses for tax and book purposes. The majority of the balance is due to timing differences of depreciation expense, caused by the use of accelerated depreciation methods for tax calculations.
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2016 AND 2015(Unaudited) AND SEPTEMBER 30, 2015(Audited)
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$384 per month. Future minimum lease payments under this obligation are as follows:
For the Period Ended March 31, |
| ||
2017 |
| $ | 768 |
2018 |
| $ | 4,608 |
2019 |
| $ | 4,608 |
2020 |
| $ | 4,608 |
2021 |
| $ | 4,608 |
Thereafter |
| $ | 3,840 |
Total |
| $ | 23,040 |
18
PISMO COAST VILLAGE, INC.
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2017 AND 2016 (Unaudited) AND SEPTEMBER 30, 2016 (Audited)
PAGE 7
NOTE 9 - OPERATING LEASES (continued)
Rent expense under these agreements were $33,781was $18,570 and $33,596$18,277 for the nine-monthsix-month period ended June 30,March 31, 2017 and 2016, and 2015, respectively.
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 $43,591 and $43,077$31,341 for the ninesix months ended June 30,March 31, 2017. The contribution to the pension plan for the six months ended March 31, 2016 and 2015, respectively.was $31,791.
1719