UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One) Form 10-Q
[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2008
or
[ ]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 WEST ONTARIO STREET, CHICAGO, ILLINOIS 60610
(Address of principal executive offices) (Zip Code)
(Issuer's telephone number) (312) 823-8772
________________________________________________________________
(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
{X}Yes { }No
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). { )Yes {X}No
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:
1,431,503 shares as of the date of this report
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 or the Exchange Act.
Large Accelerated filer ___ Accelerated Filer ___
Non-accelerated filer ___ Smaller reporting Company _X_
(Do not check if a smaller reporting company)
OAKRIDGE HOLDINGS, INC.
FORM 10-QSB
For the quarter ended December 31, 2008
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements:
(a) Condensed Consolidated Balance Sheets as of
December 31, 2008 (unaudited) and June 30, 2008
(b) Condensed Consolidated Statements of Operations
for the three months ended December 31, 2008 and
2007 (unaudited) and six months ended December 31,
2008 and 2007 (unaudited)
(c) Condensed Consolidated Statements of Cash Flows
for the six months ended December 31, 2008 and
2007 (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 2-3. Not Applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
ITEM 5. Not Applicable
ITEM 6. Exhibits
SIGNATURES
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
December 31,2008 June 30,2008
(Unaudited)
_________________ ____________
<s> <c> <c>
Current assets:
Cash & cash equivalents $361,316 $278,202
Trade receivables 1,590,061 2,204,311
Curent portion of net
investment in sales-type lease - 460,200
Inventories:
Production 6,092,147 5,656,996
Cemetery, mausoleum space,
markers and related 645,416 645,941
Other current assets 143,375 100,873
Deferred income taxes 154,000 178,000
----------- -----------
Total current assets 8,986,315 9,524,523
----------- -----------
Property, plant and equipment:
Property, plant and equipment,
at cost 6,321,353 6,226,836
Less accumulated depreciation (4,013,612) (3,862,029)
----------- -----------
Property, plant and equipment,
net 2,307,741 2,364,807
----------- -----------
Other assets:
Preneed trust investments 2,004,720 1,926,120
Cemetery perpetual care trusts 4,548,309 4,918,067
Deferred income taxes 185,000 82,000
Net investment in sales-type lease - -
Deferred financing costs 72,913 76,785
Other 13,435 19,800
----------- -----------
Total other assets 6,824,377 7,022,772
----------- -----------
Total Assets $18,118,433 $18,912,102
=========== ===========
See accompanying notes to the condensed
consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
LIABILITIES
December 31,2008 June 30,2008
(Unaudited)
_____________ _____________
<s> <c> <c>
Current liabilities:
Notes payable bank $ 979,840 $520,000
Accounts payable 733,123 1,140,562
Due to finance company 638,894 980,544
Other current liabilities 749,594 814,356
Deferred revenue 2,444,957 2,372,525
Current maturities of long-
term debt 224,500 212,575
----------- -----------
Total current liabilities 5,770,908 6,040,562
----------- -----------
Long-term debt 4,300,466 4,415,274
----------- -----------
Total liabilities 10,071,374 10,455,836
----------- -----------
Non-controlling interest in
perpetual care and trust
investments 6,553,029 6,844,187
----------- -----------
STOCKHOLDERS' EQUITY
Common stock 143,151 143,151
Additional paid-in-capital 2,028,975 2,028,975
Accumulated earnings (deficit) (678,096) (560,047)
----------- -----------
Total stockholders' equity 1,494,030 1,612,079
----------- -----------
Total liabilities and
stockholders' equity $18,118,433 $18,912,102
=========== ===========
See accompanying notes to the condensed
consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended December Six Months Ended December 31,
31,
2008 2007 2008 2007
__________ __________ __________ __________
<s> <c> <c> <c> <c>
Revenue, net:
Cemetery $583,131 $769,313 $1,349,660 $1,475,414
Aviation 1,622,049 1,793,791 4,084,668 2,890,423
Interest-Care Funds 29,525 34,156 58,885 65,234
Other (3,716) 15,885 (6,365) 16,663
---------- ---------- ---------- ----------
Total revenue 2,230,989 2,613,145 5,486,848 4,447,734
---------- ---------- ---------- ----------
Operating expenses:
Cost of cemetery sales 429,785 421,405 891,768 905,142
Cost of aviation sales 1,638,749 1,427,100 3,788,993 2,509,184
Sales and marketing 60,243 114,344 205,756 231,956
General and administrative 283,865 239,656 608,529 529,721
---------- ---------- ---------- ----------
Total operating expenses 2,412,642 2,202,505 5,495,046 4,176,003
---------- ---------- ---------- ----------
Income (loss) from
operations (181,653) 410,640 (8,198) 271,731
Other income (expense)
Interest income 6,250 29,535 18,437 83,321
Interest expense (93,769) (98,363) (207,288) (172,930)
---------- ---------- ---------- ----------
Total other expense (87,519) (68,828) (188,851) (89,609)
Net income (loss) before
income taxes (269,172) 341,812 (197,049) 182,122
Income taxes provision
(benefit) (108,000) 137,000 (79,000) 73,000
---------- ---------- ---------- ----------
Net income (loss) $(161,172) $204,812 $(118,049) $109,122
========== ========== ========== ==========
Net income (loss) per common
share - basic $(.113) $.143 $(.082) $.076
========== ========== ========== ==========
Weighted average number of
common shares outstanding -
basic 1,431,503 1,431,503 1,431,503 1,431,503
========== ========== ========== ==========
Net income (loss) per common
shares - diluted $(.113) $.131 $(.022) $.074
========== ========== ========== ==========
Weighted average number of
common shares outstanding -
diluted Anti-dilutive 1,566,503 Antidilutive 1,566,503
========== ========== ========== ==========
See accompanying notes to the
condensed consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
ITEM 1 - FINANCIAL STATEMENTS
OAKRIDGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended December 30, 2008 2007
____________ ___________
<s> <c> <c>
Cash flows from operating activities:
Net income (loss) (118,049) 109,122
Adjustments to reconcile net income
(loss) to net cash flows from
operating activities:
Depreciation 155,455 185,920
Deferred income taxes (79,000) 73,000
Receivables 614,250 (285,382)
Inventories (434,626) (1,414,560)
Prepaids & other assets (36,137) (63,228)
Accounts payable and due to
finance company (749,089) 336,784
Deferred revenue 72,432 221,523
Accrued liabilities (64,762) (83,420)
---------- ----------
Net cash flows used in operating
activities (639,526) (920,241)
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (94,517) (207,543)
Payments on lease receivable 460,200 403,857
---------- ----------
Net cash flows from investing
activities 365,683 196,314
---------- ----------
Cash flows from financing activities:
Increase (decrease) in note payable
- bank 459,840 398,000
Principal payments on long-term debt (102,883) (37,081)
---------- ----------
Net cash flows from financing
activities 356,957 360,919
---------- ----------
Net change in cash and cash
equivalents: 83,114 (363,008)
Cash and cash equivalents:
Beginning of year 278,202 854,495
---------- ----------
End of period $361,316 $491,487
========== ==========
See accompanying notes to the condensed
consolidated financial statements
PART I - FINANCIAL INFORMATION FORM 10-QSB
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-KSB for the fiscal year ended
June 30, 2008. Operating results for the six-month period ended
December 31, 2008 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 Statement of
Financial Accounting Standards No. 128, "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 stock options and convertible debentures. The following
table presents the computation of basic and diluted EPS:
Six Months Ended December 31, 2008 2007
Income (loss) from continuing $(118,049) $109,122
operations
Average shares of common stock 1,431,503 1,431,503
outstanding used to compute basic
earnings per common share
Additional common shares to be Antidilutive 135,000
issued assuming exercise of stock
options, and conversion of
convertible debentures
Additional income from continuing Antidilutive $7,000
operations, assuming conversion of
convertible debentures at the
beginning of the period
Shares used to compute dilutive 1,431,503 1,566,503
effect of stock options and
convertible debentures
Basic earnings (loss) per common $(.082) $.076
share from continuing operations
Diluted earnings (loss) per common $(.082) $.074
share from continuing operations
3. COMPREHENSIVE INCOME
The Company has no significant components of other comprehensive
income and accordingly, comprehensive income (loss) is the same
as net income (loss) 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.
The table below summarizes information about reported segments for the
three months and six months ended December 31, 2008 and 2007:
SIX MONTHS ENDED
DECEMBER 31, 2008:
Aviation Cemeteries Corporate Consolidation
Ground
Support
Equipment
Revenues $4,084,688 $1,408,545 $(6,365) $5,486,868
Depreciation 52,472 102,000 983 155,455
Gross Margin 295,675 516,777 (6,365) 806,087
Selling Expenses 88,980 116,776 - 205,756
General &
Administrative
Expenses 183,502 268,065 156,962 608,529
Interest Expense 177,399 3,564 26,325 207,288
Interest Income 6,855 11,582 - 18,437
Income (loss)
before Taxes (147,351) 139,954 (189,652) (197,049)
Capital
Expenditures 5,760 88,757 - 94,517
Segment assets:
Inventory 6,092,147 645,416 - 6,737,563
Property, Plant
& Equipment 1,336,406 969,833 1,502 2,307,741
THREE MONTHS ENDED
DECEMBER 31, 2008:
Aviation Cemeteries Corporate Consolidation
Ground
Support
Equipment
Revenues $1,622,049 $612,656 $(3,716) $2,230,989
Depreciation 26,236 51,000 500 138,309
Gross Margin (16,700) 182,871 (3,716) 162,455
Selling Expenses 16,950 43,293 - 60,243
General &
Administrative
Expenses 73,276 117,779 92,810 283,865
Interest Expense 79,973 634 13,162 93,769
Interest Income 461 5,789 - 6,250
Income (loss)
before Taxes (186,438) 26,954 (109,688) (269,172)
Capital
Expenditures 137 7,735 - 7,872
SIX MONTHS ENDED
DECEMBER 31, 2007:
Aviation Cemeteries Corporate Consolidation
Ground
Support
Equipment
Revenues $2,906,139 $1,540,648 $947 $4,447,734
Depreciation 99,720 85,200 1,000 185,920
Gross Margin 381,239 635,507 947 1,017,693
Selling Expenses 124,884 107,072 - 231,956
General &
Administrative
Expenses 136,622 199,113 193,987 529,722
Interest Expense 124,504 15,425 33,001 172,930
Interest Income 72,309 11,012 - 83,321
Income (loss)
before Taxes 83,254 324,909 (226,041) 182,122
Capital
Expenditures 18,447 189,096 - 207,543
Segment assets
Inventory 5,393,054 648,475 - 6,041,529
Property, Plant
& Equipment 1,379,900 996,323 3,485 2,379,708
THREE MONTHS ENDED
DECEMBER 31, 2007:
Aviation Cemeteries Corporate Consolidation
Ground
Support
Equipment
Revenues $1,809,507 $803,469 $169 $2,613,145
Depreciation 49,860 42,600 500 92,960
Gross Margin 366,691 382,065 169 748,925
Selling Expenses 65,703 48,641 - 114,344
General &
Administrative
Expenses 70,426 122,807 46,424 239,657
Interest Expense 69,216 13,733 15,414 98,363
Interest Income 23,698 5,837 - 29,535
Income (loss)
before taxes 200,760 202,721 (61,669) 341,812
Capital
Expenditures 12,563 11,967 - 24,530
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. The Private Securities Litigation Reform Act of
1995 contains certain safe harbors regarding forward-looking
statements. 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; 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, cash flow from operations and the offering of its
subordinated debentures. For the first six months of fiscal year
2009,the Company had an increase in cash of $83,114 compared to a cash
decrease in the same period in fiscal year 2008 of $363,008. As of
December 31, 2008, the Company had no cash equivalents.
During the six month period ended December 31, 2008, the Company
recorded a net loss after tax benefit of $118,049. The Company's net
cash used in operating activities was $639,526 in the first six
months of fiscal year 2009 compared to net cash used in operating
activities of $920,241 in the same period in fiscal year 2008. The
decrease in net cash used in operating activities was primarily due
to a increase in accounts receivable. During the first six months
of fiscal 2009, cash provided by investing activities was $365,683
primarily due to payments on a lease receivable from one of the
Company's aviation equipment customers, while net cash provided by
financing activities was $356,957 primarily due to borrowings on the
revolving note payable with bank. The remaining increases and
decreases in the components of the Company's financial position
reflect normal operating activity.
The Company had working capital of $3,215,407 at December 31, 2008,
a decrease of $268,554 from June 30, 2008. The decrease in working
capital was primarily due to decreases in trade and lease receivables
ad ofset by corresponding decreases in trade payables and payments
due to a finance company. Additionally, the revolving note payable to
our bank lender increased $459,840 during the six month period ending
December 31, 2008, primarily to finance an increase in inventory
needed to meet expected sales demands in the second quarter of fiscal
year 2009. Current assets amounted to $8,986,315 and current
liabilities were $5,770,908, resulting in a current ratio of 1.56 to 1
at December 31, 2008. Long-term debt was $4,300,466 and equity
was $1,494,030 at December 31, 2008.
Capital expenditures for the first six months of fiscal year 2009 were
$94,517 compared with $207,543 for the same period in fiscal year
2008. These investments reflect the Company's continuing program to
achieve business growth, improve its properties, and improve
productivity. The cemetery operations' primary expenditure was for
improvements on the mausoleum front steps, terrace, and front of the
chapel. The aviation ground support operations purchased upgraded
computer workstations. The Company anticipates that it will spend
approximately $10,000 on capital expenditures during the final two
quarters of fiscal year 2009 for shop equipment for aviation ground
support operations. The Company plans to finance these capital
expenditures primarily through cash flows provided by operations.
The Company has a bank line of credit for up to the lesser of
(1) $1,000,000 or (2) 75% of the Company's accounts acceptable to
the lender. The line of credit contains certain financial covenants
that require the Company to maintain a debt-to-worth ratio of at
least 4.5-to-1 and cash flow-to-current maturity of at least 1.2-to-1.
The line of credit matures on May 22, 2009. As of December 31, 2008
there was $979,840 outstanding under this facility.
The Company believes that its financial position, remaining debt
capacity and ability to issue subordinated debentures should enable
it to meet its current and future capital requirements.
INFLATION
Because of the relatively low levels of inflation experienced during
the first half of this fiscal year, and as of December 31, 2008,
inflation did not have a significant effect on the Company's results
in the first six months of fiscal year 2009.
RESULTS OF OPERATIONS
FIRST SIX MONTHS OF FISCAL YEAR 2009
COMPARED WITH FIRST SIX MONTHS OF FISCAL YEAR 2008
Cemetery Operations:
Revenue for the six months ended December 31, 2008 was $1,408,545, a
decrease of $132,103, or 9%, when compared to the six months ended
December 31, 2007. The decrease was primarily due to a decrease in
marker sales of $125,444 and cremations of $18,000. The Company's
management expects that sales of non-essential items such as markers,
foundations, and pre-need sales will continue to decrease as the
economy continues to decline and disposal income decreases.
Cost of sales for the six months ended December 31, 2008 was $891,768,
a decrease of $13,374, or 1%, compared to the six months ended
December 31, 2007. The decrease was primarily due to decreased costs
associated with sales of markers of $28,783, but fixed costs of
employees offset the decrease in goods purchased from vendors. The
Company's costs associated with interments and cremations remained
relatively constant because the costs associated with those revenue
sources come from the Company's fixed labor costs.
The resulting cemetery gross profit margin was 37% for the first six
months of fiscal year 2009 versus 41% for the corresponding period in
fiscal year 2008, representing a 4% decrease. The decrease was
caused by a decrease in sales volume.
Selling expenses for the six months ended December 31, 2008 were
$116,776, an increase of $9,704, or 9%, when compared to the six
months ended December 31, 2007. The increase was due to increased
costs of health insurance for sales employees.
General and administrative expenses for the six months ended
December 31, 2008, were $268,065, an increase of $68,952, or 35%,
when compared to the six months ended December 31, 2007. The increase
was primarily due to increases in the cost of one additional
full-time office employee of $17,605, utilities of $15,410, bonus
payments to management personal of $20,769, health insurance of
$5,998, and deprecation of $6,000.
Holding Operations:
Revenue for the six months ended December 31, 2008 was immaterial.
General and administrative expenses for the six months ended
December 31, 2008 was $156,962, a decrease of $37,025, or 19%, when
compared to the six months ended December 31, 2007. The decrease was
primarily due to the allocation of corporate assessment of an
additional $36,000.
Interest expense for the six months ended December 31, 2008 was
$26,325, a decrease of $6,676, or 20%, when compared to the six
months ended December 31, 2007. The decrease is due to having no
bank debt after the refinancing of aviation ground support equipment.
Aviation Ground Support Operations:
Revenue for the six months ended December 31, 2008 was $4,084,688, an
increase of $1,178,549, or 41%, when compared to the six months ended
December 31, 2007. The increase was primarily due to increased
international equipment sales during the period.
Cost of sales as a percentage of sales for the six months ended
December 31, 2008 was 93%, or an increase of 6%, when compared to the
six months ended December 31, 2007. The increase was primarily due
to increased costs associated with more employees and related
benefits of $677,866, cost of utilities of $15,679, freight out and
delivery costs of $179,695, and research and development of $15,530.
The costs of hiring engineers and drafters for upcoming contracts to
be produced in the third and fourth quarters of fiscal year 2009
also contributed significantly to increased costs of sales.
The resulting gross profit margin was 7% for the first six months of
fiscal year 2009 versus 13% for the corresponding period in fiscal
year 2008, representing a $85,564 decrease.
Selling expenses for the six months ended December 31, 2008 were
$88,980, a decrease of $35,904, or 29%, when compared to the six
months ended December 31, 2007. The decrease was primarily due to
the Company's in-house salesman not being paid commissions and his
agreement to forgive commissions accrued by the Company at
June 30, 2008.
General and administrative expenses for the six months ended
December 31, 2008, were $183,502, an increase of $46,880, or 34%,
when compared to six months ended December 31, 2007. The increase
was primarily due to increased management costs of $48,589, medical
insurance of $13,922, offset by reduced attorney fees of $13,485.
Other expenses, which consist of interest expense and interest
income, for the six months ended December 31, 2008, were a combined
expense of $170,544, an increase of $118,349, or 227%, when compared
to the six months ended December 31, 2007. The increase was due to
no longer having lease revenue earned with the United States
Government, and increase in financing costs associated with the new
credit facility entered into in the last quarter of fiscal 2008.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 2008
COMPARED WITH THREE MONTHS ENDED DECEMBER 31, 2007
Cemetery Operations:
Revenue for the three months ended December 31, 2008 was $612,656, a
decrease of $197,813, or 24%, when compared to the three months ended
December 31, 2007. The decrease was primarily due to a decrease in
all revenue accounts, specifically, cemetery space ($33,386), markers
($15,946), foundations ($32,110), grave liners ($28,786), interment
fees ($36,360), overtime ($16,505), cremations ($22,540), and care
fund income (4,630). The Company's management believes the decrease
in total revenue was due to the slow down in the economy during the
second quarter of fiscal year 2009.
Cost of sales for the three months ended December 31, 2008 was
$429,785, an increase of $8,381, or 2%, when compared to the three
months ended December 31, 2007. The increase was primarily due to
increased utilizes, gas and medical insurance costs.
The resulting cemetery gross profit margin was 30% for the three
months ended December 31, 2008 versus 48% for the corresponding
period in fiscal year 2008, representing a 18% decrease.
Selling expenses for the three months ended December 31, 2008 were
$43,293, a decrease of $5,348, or 11%, when compared to the
three-month period ended December 31, 2007. The decrease was
primarily due to lower sales commissions and related payroll taxes.
General and administrative expenses for the three months ended
December 31, 2008 were $117,779, a decrease of $5,028, or 4%, when
compared to the three months ended December 31, 2007. The decrease
was primarily due to lower training costs and professional fees.
Holding Operations:
Revenue for the three months ended December 31, 2008 was immaterial.
General and administrative expenses for the three months ended
December 31, 2008 were $92,810, an increase of $46,389, or 100%,
when compared to the three months ended December 31, 2007. The
increase was primarily due to higher audit fees.
Interest expense for the three months ended December 31, 2008 was
$13,162, a decrease of $2,252, or 15%, when compared to the three
months ended December 31, 2007. The decrease is due to lower debt.
Aviation Ground Support Operations:
Revenues for the three months ended December 31, 2008 were
$1,622,049, a decrease of $187,458, or 10%, when compared to the
three months ended December 31, 2007. The decrease in revenue was
primarily due to lower equipment sales of $129,942 and lower parts
sales of $64,813. The Company's management believes the decrease was
caused by the general decrease in credit facilities available to
purchase goods to manufacture.
Cost of sales for the three months ended December 31, 2008, was
$1,638,749, an increase of $195,933, or 14%, when compared to the
three months ended December 31, 2007. The increase was primarily
due to increased costs of shipping and delivery of $81,682 and
increased costs associated with hiring engineers and drafters to
complete future projects of $114,251.
The resulting gross profit margin was negative for the three months
ended December 31, 2008 versus 20% for the corresponding period in
fiscal year 2008. The decrease was due to lower sales and fixed costs
that the Company could not decrease to offset lower sales.
Selling expenses for the three months ended December 31, 2008 were
$16,950, a decrease of $48,753, or 74%, when compared to the three
months ended December 31, 2007. The decrease was primarily due to
the forgiveness of sales commissions by the Company's inside salesman
for the year.
General and administrative expenses for the three months ended
December 31, 2008 were $73,276, an increase of $2,850 or 4%, when
compared to the three months ended December 31, 2007. The increase
was primarily due to increased medical insurance expenses.
Interest expense for the three months ended December 31, 2008 was
$79,973, an increase of $10,757, or 16%, when compared to the three
months ended December 31, 2007. The increase was attributable to
increased debt under the Company's line of credit due to the
increase in inventory to meet expected sales demands in the second
quarter of fiscal year 2009.
OFF BALANCE SHEET ARRANGEMENTS
The Company has no off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not Applicable
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 has concluded
that the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is (a)
recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms and (b) accumulated and communicated
to the Chief Executive Officer and Chief Financial Officer to allow
timely decisions regarding disclosure.
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.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is from time to time involved in ordinary 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The owners of 925,360 shares of common stock, or 65% of shares
outstanding, were represented at the annual meeting of shareholders
on December 12, 2008 at Faegre & Benson LLP, 2200 Wells Fargo Center,
90 South Seventh Street, Minneapolis, Minnesota.
Elected as directors of the Company, each receiving a minimum of
920,260 votes was:
920,260 Robert C. Harvey
920,260 Robert B. Gregor
925,360 Hugh McDaniel
925,360 Pamela Whitney
925,360 Robert Lindman
In addition, the shareholders ratified the appointment of Wipfli, LLP
as the independent auditors of the Company for fiscal year 2009. The
vote was 920,860 in favor; 4,200 against; and 300 abstaining.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS
The following exhibits are filed as part of this Quarterly Report on
Form 10-QSB for the quarterly period ending December 31, 2008:
3(i) Amended and Restated Articles of Incorporation, as amended(1)
3(ii)Amended and Superseding By-Laws of the Company, as amended(1)
31 Rule 13a-14(a)/15d-14(a) Certifications
32 Section 1350 Certifications
(1) 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.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has 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
and Chief Financial Officer
Date: February 12, 2009
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION PAGE
3(i) Amended and Restated Articles of (incorporated
Incorporation of the Company by reference)
3(ii) Amended and Superseding By-Laws (incorporated
of the Company, as amended by reference)
31 Rule 13a-14(a)/15d-14(a) (filed
Certifications electronically
32 Section 1350 Certifications (filed
electronically