UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
(Mark One)
| S | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2011
| £ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
For the transition period from _____________ to _____________
Commission file number 0-1937
OAKRIDGE HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
| MINNESOTA | 41-0843268 |
| (State or other jurisdiction of | (I.R.S. Employer |
| Incorporation or organization) | Identification Number) |
400 W Ontario Street, Chicago, Illinois, 60654
(Address of principal executive offices) (Zip Code)
(Issuer’s telephone number) (312) 505-9267
_________________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.SYes£ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (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 shell company (as defined in Rule 12b-2 of the Exchange Act).£ YesS 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer£ | Accelerated filer£ |
| Non-accelerated filer£ (Do not check if a smaller reporting company) | Smaller reporting companyS |
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:
The number of shares of the issuer’s common stock outstanding on November 11, 2011 was 1,431,503
| PART I | FINANCIAL INFORMATION | |
| ITEM 1 | Condensed Consolidated Financial Statements: | |
| (a) | Condensed Consolidated Balance Sheets as of September 30, 2011 (unaudited) and June 30, 2011 (audited) | |
| (b) | Condensed Consolidated Statements of Operations for the three months ended September 30, 2011 and 2010 (unaudited) | |
| (c) | Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2011 and 2010 (unaudited) | |
| (d) | Notes to Condensed Consolidated Financial Statements | |
| ITEM 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| ITEM 3 | Quantitative and Qualitative Disclosures About Market Risk | |
| ITEM 4 | Controls and Procedures | |
| PART II | OTHER INFORMATION | |
| ITEM 1 | Legal Proceedings | |
| ITEM 1A | Risk Factors | |
| ITEM 2-3 | Not Applicable | |
| ITEM 4 | (Removed and Reserved) | |
| ITEM 5 | Not Applicable | |
| ITEM 6 | Exhibits | |
| SIGNATURES | ||
| 2 |
PART I — FINANCIAL INFORMATION FORM 10-Q/A
Item 1— Financial Statements
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
| September 30, 2011 | June 30, 2011 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash & cash equivalents | $ | 443,791 | $ | 416,997 | ||||
| Restricted cash | 89,898 | 89,857 | ||||||
| Accounts receivable, net | 1,859,938 | 2,128,663 | ||||||
| Inventories: | ||||||||
| Production, net | 6,763,844 | 7,535,252 | ||||||
| Cemetery, mausoleum space and markers | 594,761 | 599,445 | ||||||
| Deferred income taxes | 217,000 | 167,000 | ||||||
| Other current assets | 78,733 | 44,835 | ||||||
| Total current assets | 10,047,965 | 10,982,049 | ||||||
| Property, plant and equipment: | ||||||||
| Property, plant and equipment, at cost | 6,885,721 | 6,822,008 | ||||||
| Less accumulated depreciation | (4,579,172 | ) | (4,519,040 | ) | ||||
| Property, plant and equipment, net | 2,306,549 | 2,302,968 | ||||||
| Other assets: | ||||||||
| Cemetery perpetual care trusts | 5,170,338 | 5,345,922 | ||||||
| Pre-need trust investments | 2,242,124 | 2,075,713 | ||||||
| Deferred income taxes | 303,000 | 303,000 | ||||||
| Deferred financing costs, net | 51,620 | 53,556 | ||||||
| Other | 4,240 | 4,238 | ||||||
| Total other assets | 7,771,322 | 7,782,429 | ||||||
| Total assets | $ | 20,125,836 | $ | 21,067,446 | ||||
See accompanying notes to the condensed consolidated financial statements
| 3 |
PART I — FINANCIAL INFORMATION FORM 10-Q/A
Item 1— Financial Statements
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
| September 30, 2011 | June 30, 2011 | |||||||
| (Unaudited) | (Audited) | |||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Lines of credit - bank | $ | 1,710,845 | $ | 1,710,845 | ||||
| Trade accounts payable | 886,883 | 1,456,555 | ||||||
| Due to finance company | 1,999,950 | 2,088,037 | ||||||
| Deferred revenue | 1,552,486 | 1,697,935 | ||||||
| Accrued liabilities | 797,177 | 785,566 | ||||||
| Short-term notes payable - others | 330,000 | 330,000 | ||||||
| Current maturities of long-term debt | 824,979 | 244,800 | ||||||
| Total current liabilities | 8,102,320 | 8,313,738 | ||||||
| Long-term liabilities: | ||||||||
| Non-controlling interest in pre-need care trust investments | 2,242,124 | 2,075,713 | ||||||
| Long-term debt, less current maturities | 3,169,746 | 3,809,746 | ||||||
| Total long-term liabilities | 5,411,870 | 5,885,459 | ||||||
| Total liabilities | 13,514,190 | 14,199,197 | ||||||
| Non-controlling interest in perpetual care trust investments | 5,170,338 | 5,345,922 | ||||||
| Stockholders’ Equity: | ||||||||
| Common stock | 143,151 | 143,151 | ||||||
| Additional paid-in-capital | 2,028,975 | 2,028,975 | ||||||
| Accumulated deficit | (730,818 | ) | (649,799 | ) | ||||
| Total stockholders’ equity | 1,441,308 | 1,522,327 | ||||||
| Total liabilities & stockholder’s equity | $ | 20,125,836 | $ | 21,067,446 | ||||
See accompanying notes to the condensed consolidated financial statements
| 4 |
PART I — FINANCIAL INFORMATION FORM 10-Q/A
Item 1— Financial Statements
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Revenue, net: | ||||||||
| Cemetery | $ | 927,682 | $ | 821,548 | ||||
| Aviation | 2,070,142 | 3,164,464 | ||||||
| Interest - Care Funds | 20,178 | 18,355 | ||||||
| Other | — | 464 | ||||||
| Total revenue | 3,018,002 | 4,004,831 | ||||||
| Operating expenses: | ||||||||
| Cost of cemetery sales | 548,196 | 467,033 | ||||||
| Cost of aviation sales | 2,083,231 | 2,844,624 | ||||||
| Sales and marketing | 102,112 | 154,961 | ||||||
| General and administrative | 314,101 | 325,836 | ||||||
| Total operating expenses | 3,047,640 | 3,792,454 | ||||||
| Operating income (loss) | (29,638 | ) | 212,377 | |||||
| Other income (expense): | ||||||||
| Interest income | 5,390 | 1,831 | ||||||
| Interest expense | (106,771 | ) | (124,620 | ) | ||||
| Total other expense | (101,381 | ) | (122,789 | ) | ||||
| Income (loss) from continuing operations before income taxes | (131,019 | ) | 89,588 | |||||
| Provision (benefit) for income taxes | (50,000 | ) | 36,000 | |||||
| Net income (loss) | $ | (81,019 | ) | $ | 53,588 | |||
| Net income (loss) per common share - basic | $ | (.057 | ) | $ | .037 | |||
| Weighted average number of common shares outstanding - basic | 1,431,503 | 1,431,503 | ||||||
| Net income (loss) per common shares - diluted | $ | (.057 | ) | $ | .026 | |||
| Weighted average number of common shares outstanding - diluted | Anti-dilutive | 2,501,503 | ||||||
See accompanying notes to the condensed consolidated financial statements
| 5 |
PART I — FINANCIAL INFORMATION FORM 10-Q/A
Item 1— Financial Statements
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three Months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (81,019 | ) | $ | 53,588 | |||
| Adjustments to reconcile net income to cash flows from operating activities: | ||||||||
| Depreciation and amortization | 62,068 | 67,636 | ||||||
| Deferred income taxes | (50,000 | ) | — | |||||
| Accounts receivable | 268,725 | 557,463 | ||||||
| Inventories | 776,092 | 203,147 | ||||||
| Other assets | (33,900 | ) | (11,229 | ) | ||||
| Accounts payable | (657,759 | ) | (338,024 | ) | ||||
| Losses on non-controlling trust investments | 26,802 | 22,145 | ||||||
| Deferred revenue | (145,449 | ) | (281,683 | ) | ||||
| Accrued liabilities | 11,611 | 102,959 | ||||||
| Net cash Provided (used) in operating activities | 177,171 | 376,002 | ||||||
| Cash flows used in investing activities: | ||||||||
| Restricted cash | (41 | ) | (132 | ) | ||||
| Purchases of non-controlling investments in trusts | (60,749 | ) | (52,078 | ) | ||||
| Sales of non-controlling investments in trusts | 33,947 | 29,933 | ||||||
| Purchases of property and equipment | (63,713 | ) | (37,112 | ) | ||||
| Net cash used in investing activities | (90,556 | ) | (59,389 | ) | ||||
| Cash flows used in financing activities: | ||||||||
| Repayment on long-term debt | (59,821 | ) | (60,758 | ) | ||||
| Repayment on short-term debt | — | (20,040 | ) | |||||
| Net cash used in financing activities | (59,821 | ) | (80,798 | ) | ||||
| Net increase (decrease) in cash: | 26,794 | 235,815 | ||||||
| Cash at beginning of period | 416,997 | 372,797 | ||||||
| Cash at end of period | $ | 443,791 | $ | 608,612 | ||||
See accompanying notes to the condensed consolidated financial statements
| 6 |
PART I — FINANCIAL INFORMATION FORM 10-Q/A
Item 1— Financial Statements
OAKRIDGE HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying Condensed Consolidated Financial Statements include the accounts of Oakridge Holdings, Inc. (the “Company”) and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present such information fairly. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2011. Operating results for the three-month period ended September 30, 2011 may not necessarily be indicative of the results to be expected for any other interim period or for the full year.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the financial statements include, but are not limited to, accounts receivable, depreciation and accruals. Actual results could differ from those estimates.
2. Earnings Per Common Share
Earnings per Common Share (EPS) are presented on both a basic and diluted basis in accordance with the provisions of Accounting Standards Codification Topic 260 - Earnings per Share. Basic EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the maximum dilution that would result after giving effect to dilutive convertible debentures. The following table presents the computation of basic and diluted EPS:
| Three Months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Income (loss) from continuing operations | $ | (81,019 | ) | $ | 53,588 | |||
| Average shares of common stock outstanding used to compute basic earnings per common share | 1,431,503 | 1,431,503 | ||||||
| Additional common shares to be issued assuming conversion of convertible debentures | anti-dilutive | 1,070,000 | ||||||
| Additional income from continuing operations, assuming conversion of convertible debentures at the beginning of the period | anti-dilutive | $ | 12,038 | |||||
| Shares used to compute dilutive effect of convertible debentures | anti-dilutive | 2,501,503 | ||||||
| Basic earnings (loss) per common share from continuing operations | ($0.057 | ) | $0.037 | |||||
| Diluted earnings (loss) per common share from continuing operations | ($0.057 | ) | $0.026 | |||||
3. Comprehensive Income
The Company has no significant components of other comprehensive income and accordingly, comprehensive income is the same as net income for all periods.
4. Operating Segments and Related Disclosures
The Company’s operations are classified into two principal industry segments: cemeteries and aviation ground support equipment.
The Company evaluates the performance of its segments and allocates resources to them based primarily on operating income.
| 7 |
The table below summarizes information about reported segments for the three months ended September 30, 2011 and 2010:
| Three Months Ended September 30, 2011 | ||||||||||||
| Aviation Ground Support Equipment | Cemeteries | Corporate | ||||||||||
| Revenues | $ | 2,070,142 | $ | 927,682 | $ | — | ||||||
| Depreciation | 20,100 | 39,000 | 1,032 | |||||||||
| Gross Margin | (13,089 | ) | 379,486 | — | ||||||||
| Selling Expenses | 33,989 | 68,123 | — | |||||||||
| General & Administrative Expenses | 67,323 | 174,281 | 72,497 | |||||||||
| Interest Expense | 84,503 | 443 | 21,825 | |||||||||
| Interest Income | 41 | 5,349 | — | |||||||||
| Income (loss) before taxes | (198,863 | ) | 162,166 | (94,322 | ) | |||||||
| Capital Expenditures | 31,734 | 31,979 | — | |||||||||
| Segment assets at 9/30/11: | ||||||||||||
| Inventory | 6,763,844 | 594,761 | — | |||||||||
| Property, Plant & Equipment, net | 1,535,944 | 763,381 | 7,224 | |||||||||
| Other Assets | 156,620 | 7,406,462 | 208,240 | |||||||||
| Three Months Ended September 30, 2010: | ||||||||||||
| Aviation Ground Support Equipment | Cemeteries | Corporate | ||||||||||
| Revenues | $ | 3,164,464 | $ | 839,903 | $ | 464 | ||||||
| Depreciation/amortization | 26,200 | 39,000 | 500 | |||||||||
| Gross Margin | 319,839 | 372,870 | 464 | |||||||||
| Selling Expenses | 62,166 | 92,795 | — | |||||||||
| General & Administrative Expenses | 69,605 | 163,194 | 93,037 | |||||||||
| Interest Expense | 104,011 | �� | 472 | 20,137 | ||||||||
| Interest Income | 163 | 1,668 | — | |||||||||
| Income (loss) before Taxes | 84,220 | 118,078 | (112,710 | ) | ||||||||
| Capital Expenditures | 10,117 | 21,355 | 5,640 | |||||||||
| Segment assets at 9/30/10: | ||||||||||||
| Inventory | 6,422,691 | 628,905 | — | |||||||||
| Property, Plant & Equipment | 1,360,839 | 795,490 | 9,040 | |||||||||
| Other Assets | 242,363 | 7,130,678 | 113,497 | |||||||||
| 8 |
5. Fair Value Measurements
The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability between market participants at a measurement date.
General accepted accounting principles describes a fair value hierarchy that includes three levels or inputs to be used to measure fair value. The three levels, as interpreted for use by the Company, are defined as follows:
Level 1 – Inputs into fair value methodology are based on quoted market prices in active markets.
Level 2 – Inputs into the fair value methodology are based on quoted prices for similar items, broker/dealer quotes, or models using market interest rates or yield curves. The inputs are generally seen as observable in active markets for similar items for the asset or liability, either directly or indirectly, for substantially the same term of the financial instrument.
Level 3 – Inputs into fair value methodology are unobservable and significant to the fair value measurement (primarily alternative type investments, which include but are not limited to limited partnership interests, hedges, private equity, real estate, and natural resource funds). Often, these types of investments are valued based on historical cost and then adjusted by shared earnings of a partnership or cooperative, which can require some varying degree of judgment.
Information regarding assets (principally cash and investments) and liabilities measured at fair value on a recurring basis as of September 30, 2011 and June 30, 2011 are as follows:
| Recurring Fair Value Measurements Using | ||||||||||||||||
| Level I | Level II | Level III | Total Fair Value | |||||||||||||
| September 30, 2011 | ||||||||||||||||
| Assets at fair value: | ||||||||||||||||
| Cemetery perpetual care and pre-need trust investments | $ | — | $ | 7,412,462 | $ | — | $ | 7,412,462 | ||||||||
| Liabilities at fair value: | ||||||||||||||||
| Non-controlling interest in pre-need trust investments | $ | — | $ | 2,242,124 | $ | — | $ | 2,242,124 | ||||||||
| Recurring Fair Value Measurements Using | ||||||||||||||||
| Level I | Level II | Level III | Total Fair Value | |||||||||||||
| June 30, 2011 | ||||||||||||||||
| Assets at fair value: | ||||||||||||||||
| Cemetery perpetual care and pre-need trust investments | $ | — | $ | 7,421,635 | $ | — | $ | 7,421,635 | ||||||||
| Liabilities at fair value: | ||||||||||||||||
| Non-controlling interest in pre-need trust investments | $ | — | $ | 2,075,713 | $ | — | $ | 2,075,713 | ||||||||
| 9 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following is management’s discussion and analysis of certain significant factors which have affected the Company’s financial position and operating results during the periods included in the accompanying condensed consolidated financial statements.
Management’s discussion and analysis of financial condition and results of operations, as well as other portions of this document, include certain forward-looking statements about the Company’s business and products, revenues, expenditures and operating and capital requirements. From time to time, information provided by the Company or statements made by its directors, officers or employees may contain “forward-looking” information subject to numerous risks and uncertainties. Any statements made herein that are not statements of historical fact are forward-looking statements including, but not limited to, statements concerning the characteristics and growth of the Company’s markets and customers, the Company’s objectives and plans for its future operations and products and the Company’s expected liquidity and capital resources. Such forward-looking statements are based on a number of assumptions and involve a number of risks and uncertainties, and, accordingly, actual results could differ materially for those discussed. Among the factors that could cause actual results to differ materially from those projected in any forward-looking statement are as follows: the effect of business and economic conditions; conditions in the industries in which the Company operates, particularly the airline industry; the Company’s ability to win government contracts; the impact of competitive products and continued pressure on prices realized by the Company for its products; constraints on supplies of raw material used in manufacturing certain of the Company’s products or services provided; capacity constraints limiting the production of certain products; changes in anticipated operating results, credit availability, equity market conditions or the Company’s debt levels may further enhance or inhibit the Company’s ability to maintain or raise appropriate levels of cash; requirements for unseen maintenance, repairs or capital asset acquisitions; difficulties or delays in the development, production, testing, and marketing of products; market acceptance issues, including the failure of products to generate anticipated sales levels; difficulties in manufacturing process and in realizing related cost savings and other benefits; the effects of changes in trade, monetary and fiscal policies, laws and regulations; foreign exchange rates and fluctuations in those rates; the cost and effects of legal and administrative proceedings, including environmental proceedings; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update any forward-looking statement as a result of future events or developments.
Financial Condition And Liquidity
The Company’s liquidity needs arise from its debt service, working capital and capital expenditures. The Company has historically funded its liquidity needs with proceeds from equity contributions, bank borrowing, short term notes from officers, cash flows from operations and the offering of its subordinated debentures. For the first three months of fiscal year 2012, the Company had an increase in cash of $26,794, compared to a $235,815 cash increase for the same period in fiscal year 2011. As of September 30, 2011, the Company held cash and cash equivalents of $443,791.
During the three month period ended September 30, 2011, the Company recorded net loss from operations of $81,019. The Company’s net cash provided from operating activities was $177,171 in the first three months of fiscal year 2012, compared to net cash from operating activities of $376,002 in the same period of fiscal year 2011. The decrease in net cash provided from operating activities during this three month period was primarily due to the reduction of accounts payable. Cash flow used in investing activities was $90,556 during the first three months of fiscal year 2012 and was primarily used for the purchase of property and equipment for the cemeteries and purchases greater than sales in the non-controlling trusts. Net cash used for financing activities was $59,821 during the first three months of fiscal year 2012, and was used to pay down debt and was comparable to prior fiscal year 2011. The remaining increases and decreases in the components of the Company’s financial position reflect normal operating activity.
The Company had working capital of $1,945,645 at September 30, 2011, a decrease of $722,666 since June 30, 2011 due primarily to the reclassification of $640,000 of convertible debentures which are due within one year. At September 30, 2011, current assets amounted to $10,047,965 and current liabilities were $8,102,320, resulting in a current ratio of 1.24 to 1.0, which was a slight change from 1.32 to 1.0 at June 30, 2011. Long-term debt was $3,169,746 and stockholders’ equity was $1,441,308 at September 30, 2011. The Company’s present working capital must continue to improve in order for it to meet current operating needs.
| 10 |
Capital expenditures for the first three months of fiscal year 2012 were $63,713, compared with capital expenditures of $37,112 during the same period in fiscal year 2011. The cemetery operations incurred expenditures for improvements to the mausoleum ($30,400), grave markers and a jet pump for the grounds ($547), and a station computer and a hard drive for the server ($1,032), or $31,979 in total for cemetery operations. The aviation ground support operations purchased a copier ($6,329), hand tools for the shop ($174) and technical manuals ($25,231), or $31,734 in capital expenditures for aviation ground support operations. The Company anticipates that it will spend approximately $100,000 on capital expenditures during the final three quarters of fiscal year 2012 for repairs to the Oakridge cemetery mausoleum and equipment for aviation ground support operations. The Company plans to finance these capital expenditures primarily through operating cash flows as sales continue to improve in the aviation segment.
The Company has two lines of credit facilities. As of September 30, 2011, $1,710,845 of aggregate borrowing capacity of $2,100,000 was outstanding, leaving available credit of $389,155.
As indicated above, the Company believes that its financial position and debt capacity should enable it to meet its current and future cash requirements despite the need for improved working capital to meet current operating needs.
Inflation
Because of the relatively low levels of inflation experienced this past fiscal year, and as of September 30, 2011, inflation did not have a significant effect on the Company’s results in the first three months of fiscal year 2012.
Results Of Operations First Quarter Of Fiscal Year 2012 Compared With First Quarter Of Fiscal Year 2011
Cemetery Operations
Cemetery revenue from operations increased $106,134 to $927,682 for the first quarter of fiscal year 2012, or 12% over the prior year’s comparable period revenue of $821,548. The increase was primarily due to an increase in sales of land $12,335, markers of $46,977, foundations of $14,131, grave liners of $9,139 and interment fees of $28,690. The only decrease during the quarter was in cremation fees of $7,140.
The cemetery gross profit margin decreased to 40% in the first quarter of fiscal year 2012, a decrease of 3% compared to the corresponding period in fiscal year 2011. The decrease was attributable to an increase in salaries of $55,019 and related payroll costs of $14,683 due to more burials taking place on Saturdays, which increases the cost of labor due to union contracts that require time-and-a-half pay.
Interest income from cemetery care funds increased $1,823, or 9%, in the first quarter of fiscal year 2012, compared to the corresponding period in fiscal year 2011. The increase was due to increased rates earned on funds.
Selling expenses decreased $24,672, or 26%, in the first quarter of fiscal year 2012, compared to the corresponding period in fiscal year 2011. The decrease was caused by having one less full time salesperson and discontinuing payment of related benefits.
General and administrative expenses increased $11,087, or 7%, in the first quarter of fiscal year 2012 in comparison to the prior year’s comparable period. The increase was primarily due to increases in temporary salaries for the input of data into the computer system.
| 11 |
Aviation Ground Support Equipment Operations:
Revenue decreased $1,094,322 to $2,070,142, or 34%, in the first quarter of fiscal year 2012 in comparison to the prior year’s comparable period. The decrease was primarily due to the United States government stopping the shipment of all equipment due to the 2011 Ford chassis not being able to run on jet fuel. The contracts now have been modified and production will begin in November 2011.
Gross profit margin decreased 10% in the first quarter of fiscal year 2012, compared to the corresponding period in fiscal year 2011, resulting in a negative gross margin. This decrease was caused by plant capacity running at approximately 33%, due to not being able to build United States government equipment, which constitutes 70% of total sales.
Selling expenses for the aviation ground support equipment business as a percentage of sales remained constant at 2% of net revenues for the comparable period. The decrease of $28,177 in the first quarter of fiscal year 2012, compared to the corresponding period in fiscal year 2011, was primarily due to no sales commissions being paid to outside agents and representatives.
General and administrative expenses in the first quarter of fiscal year 2012 decreased $2,282, or 3%, in comparison to the first quarter of fiscal year 2011. The decrease was primarily due to the decrease in bank related fees.
Interest expense in the first quarter of fiscal year 2012 was $84,503, a decrease of $19,508, or 18%, in comparison to the first quarter of fiscal year 2011. The decrease was due to a decrease in finance rates with Ford Motor Credit.
Interest income in the first quarter of fiscal year 2012 is immaterial.
Oakridge Holdings, Inc.
General and administrative expenses in the first quarter of fiscal year 2012 decreased $20,540, or 22%, in comparison to the first quarter of fiscal year 2011. The decrease was primarily due to lower professional fees of $12,864, transfer agent expenses of $1,348 and past write offs of RSM Equities for $12,375.
Interest expense in the first quarter of fiscal year 2012 was $21,825, an increase of $1,688, or 8%, in comparison to the first quarter of fiscal year 2011. The increase was primarily due to higher debenture balances outstanding.
Off Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCOURSES ABOUT MARKET RISK |
Not applicable.
| 12 |
| ITEM 4. | CONTROLS AND PROCEDURES |
An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures because of the material weakness relating to internal controls that was described in Item 9A of the Company’s Form 10-K for the year ended June 30, 2011, filed October 13, 2011.
Notwithstanding the material weakness that existed as of June 30, 2011, our Chief Executive Officer and Chief Financial Officer concluded that the financial statements included in this report present fairly, in all material respects, the financial position, results of operations and cash flows of the Company in conformity with accounting principles generally accepted in the United States of America.
No change in the Company’s internal control over financial reporting was identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the period covered by this quarterly report and that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Management has concluded that the material weakness in internal control, as described in Item 9A of our Form 10-K for the year ended June 30, 2011, has not been fully remediated. We are committed to implementing the necessary enhancements to our policies and procedures to fully remediate the material weakness discussed above. Due to our lack of sufficient capital, we expect the material weakness to continue until our capital needs are met.
PART II OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
The Company is from time to time involved in ordinary course litigation incidental to the conduct of its businesses. The Company believes that none of its pending litigation will have a material adverse effect on the Company’s businesses, financial condition or results of operations.
| ITEM 1A. | RISK FACTORS |
Not applicable.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Not applicable.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
Not applicable.
| ITEM 4. | (Removed and Reserved) |
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| ITEM 5. | OTHER INFORMATION |
Not applicable.
| ITEM 6. | EXHIBITS |
The following exhibits are filed as part of this Quarterly Report on Form 10-Q/A for the quarterly period ended September 30, 2011:
| 1.1 | Form of 9.00% Convertible Subordinated Debenture due July 1, 2012 | (incorporated by reference) | ||
| 3(i) | Amended and Restated Articles of Incorporation of the Company | (incorporated by reference) | ||
| 3(ii) | Amended and Superseding By-Laws of the Company, as amended | (incorporated by reference) | ||
| 31 | Rule 13a-14(a)/15d-14(a) Certifications | (filed electronically) | ||
| 32 | Section 1350 Certifications | (filed electronically) | ||
| 101.INS | XBRL Instance Document | |||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||
| 101.CAL | XBRL Taxonomy Extension Calculation Document | |||
| 101.LAB | XBRL Taxonomy Extension Linkbase Document | |||
| 101.PRE | XBRL Taxonomy Extension Presentation Document |
| (1) | Incorporated by reference to the like numbered Exhibit to the Company’s Current Report on Form 8-K filed with the Commission on February 7, 2011. |
| (2) | Incorporated by reference to the like numbered Exhibit to the Company’s Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Oakridge Holdings, Inc.
/s/ Robert C. Harvey
Robert C. Harvey
Chief Executive Officer
Principal Accounting Officer
Date: December 13, 2011
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INDEX TO EXHIBITS
| Description | Method of Filing | |||
| 1.1 | Form of 9.00% Convertible Subordinated Debenture due July 1, 2012 | (incorporated by reference) | ||
| 3(i) | Amended and Restated Articles of Incorporation of the Company | (incorporated by reference) | ||
| 3(ii) | Amended and Superseding By-Laws of the Company, as amended | (incorporated by reference) | ||
| 31 | Rule 13a-14(a)/15d-14(a) Certifications | (filed electronically) | ||
| 32 | Section 1350 Certifications | (filed electronically) | ||
| 101.INS | XBRL Instance Document | |||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||
| 101.CAL | XBRL Taxonomy Extension Calculation Document | |||
| 101.LAB | XBRL Taxonomy Extension Linkbase Document | |||
| 101.PRE | XBRL Taxonomy Extension Presentation Document | |||
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