SELECTED FINANCIAL DATA
Years ending July 31,
________________________________________________________
1994 1993 1992 1991 1990
Revenues $1,507,258 $1,497,505 $1,517,356 $1,892,870 $1,800,785
Income (loss) before
extraordinary
items (73,394) (105,336) 70,167 (224,105) (112,343)
Net income (loss) (73,394) (105,336) 70,167 (224,105) (112,343)
Earnings (loss) per
common share:
Income (loss) before
extraordinary
items (.04) (.07) .04 (.14) (.07)
Net income (loss) (.04) (.07) .04 (.14) (.07)
Cash dividends 0 0 0 0 0
Total assets 1,959,569 2,037,796 2,095,261 3,386,107 3,533,600
Long-term
obligations 819,788 871,068 888,814 871,697 951,927
F-17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
AGRI-BUSINESS
BOURBON STOCK YARDS
The revenues of Bourbon Stock Yards are based primarily on the number of
livestock handled during the year. The number of livestock handled fluctuates
by the cash price being paid for livestock, and various factors which influence
farming conditions. Operating costs generally are influenced directly by the
number of livestock received since additional labor is required to handle
additional cattle.
Over the past six (6) years Bourbon has averaged approximately 196,000 head
of cattle per year. No year during the period has been over 6,000 head more or
less than the average. The on farm inventory of cattle and calves in Kentucky
at January 1, 1994 was the largest in 10 years; however, it was only up slightly
over 1993 inventories. Hog inventories continue to decline in Kentucky as
evidenced by a 2% decline as of January 1, 1994 as compared to 1993. During
fiscal 1994 Bourbon handled approximately 48,000 hogs, which was approximately
3,400 head (6%) less than 1993.
Net revenue from Stock Yard operations increased by approximately $13,000 or
1% from the fiscal year ended July 31, 1993. This increase in revenue was the
result of increased receipts from feed and truck wash services provided. During
the year there was a decrease in the number of cattle received of 7,000 head and
4,000 hogs; however, a tariff increase in the third quarter of the previous year
made up the monetary difference.
Net revenue in 1993 from Stock Yard operations increased by approximately
$15,000 or 1% from the fiscal year ended July 31, 1992. This increase in
revenue was the result of increased receipts of approximately 1,700 head of
cattle and approximately 12,000 hogs during the year as compared to the fiscal
year ending July 31, 1992. There was a small increase in tariff of
approximately 5% during the third quarter of the year.
Operating costs for the year ended July 31, 1994 were down approximately
$25,000 or 2% as compared to 1993. The primary decrease in cost was the result
of decreased cost of labor. Utility and repair costs increased during the
period by approximately $32,000 during the period.
Operating costs for the year ended July 31, 1993 were up approximately
$33,000 or 3% as compared to 1992. The primary increase in cost was the result
of increased cost of utilities, sewer charges and additional labor costs.
F-18
Inflation is expected to account for an increase of approximately 3% - 4% in
operating costs for goods and services purchased during the next fiscal year.
The Stock Yards has approximately $74,000 in accounts payable and accrued
liabilities, which is within its cash flow ability to handle these obligations
as they become due. Bourbon does not have any capital commitments at July 31,
1994. All funds in excess of expenses are available to the parent.
FINANCE
LINCOLN FINANCE CO.
Revenues in Lincoln Finance Co. are determined by the amount of interest
earned on small loans outstanding which amounted to $678,000 at year end. The
major factors which influence operating costs of a finance operation are
interest costs and bankrupt and other uncollectible accounts.
Finance revenues for the year ended July 31, 1994 were approximately the same
as compared to 1993. There were no loans sold during the fiscal year.
Finance revenues for the year ended July 31, 1993 decreased approximately
$31,000 or 16% as compared to 1992. The primary reason for the decrease was
reduced miscellaneous income due to a tax refund received in 1992.
Operating costs, including interest, for the year ended July 31, 1994 were
down approximately $10,000 or 6% as compared to 1993. The primary reason for
the decrease was reduced bad debt expense for the year.
Operating costs, including interest, for the year ended July 31, 1993 were
down approximately $43,000 or 19% as compared to 1992. The primary reason for
the decrease was reduced salaries and professional fees for the year.
Interest cost for the year was approximately $20,000 which is the same as in
1993. Lincoln now uses its own capital to provide funds for additional loans in
the finance operation.
State law controls the maximum size and the amount of interest which can be
charged on small loans. The liquidity of the Finance business increases as
additional loans are added to the portfolio.
The Finance business has no capital commitments at July 31, 1994.
F-19
CONSOLIDATED OPERATIONS
Revenues from consolidated operations in 1994 increased approximately $10,000
or 1% as compared to 1993. This increase is primarily in additional sales of
feed and incidental items at Bourbon in fiscal 1994.
Revenues from consolidated operations in 1993 decreased approximately
$100,000 or 7% as compared to 1992. This decrease is primarily in nonrecurring
miscellaneous income items received in fiscal year 1992.
Operating costs for the year ended July 31, 1994 were down approximately
$27,000 or 1% as compared to 1993. The primary area of savings was in salaries
and wages.
Operating costs for the year ended July 31, 1993 were down approximately
$14,000 or 1% as compared to 1992. The primary area of savings were interest
costs and professional fees.
Operating costs, which include amortization and depreciation account for
105%, 107% and 95% of net sales and operating revenues for the years 1994 to
1992 respectively.
The Company did not have any capital commitments at July 31, 1994.
Working capital at July 31, 1994 was approximately a negative $59,000 as
compared to a working capital position of approximately $8,000 at July 31,
1993. There were no defaults on loans payable during the year. The liquidity
of the Company will continue to depend on its ability to expand profitable
areas of the Company and to control the associated costs of doing business.
F-20
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
ASSETS
4-30-957-31-94
Current assets:
Cash 401317 21238
Finance receivables, less allowance 0 533995
for credit losses and unearned finance
charges of 0 in 1995
and 144186 at July 31, 1994.
Other receivables 16665 14732
Inventories 496 681
Prepaid expenses 20207 11173
Total current assets 438685 581819
Net property, plant and equipment 1281530 1327400
Other assets:
Other 0 0
Franchise license, net of accumulated 44056 50350
amortization of 81826 in 1995 and
73434 in 1994.
Total other assets 44056 50350
Total assets 1764271 1959569
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable 0 90379
Accounts payable 72023 98108
Income taxes payable 1618 0
Accrued expenses 76055 98129
Deferred insurance commissions 0 2435
Current maturities of long-term debt 251722 352064
Total current liabilities 401418 641115
Long-term debt, less current maturities 791055 819788
Stockholders equity
Common stock:
Voting 100000 shares O/S 50000 50000
Non-voting 1532320 shares O/S 766160 766160
Additional paid in capital 471300 471300
Retained earnings -704791 -777923
Less: Treasury stock -10871 -10871
Total stockholders equity 571798 498666
Total liabilities and stockholders equity 1764271 1959569
F-21
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDING APRIL 30
4-30-95 4-30-94
Revenues:
Net service and operating revenues 309209 349036
Net product sales 34488 35487
Finance charges and other finance income -1675 56696
342022 441219
Cost and expenses:
Cost of service and operating revenues 241026 268426
Cost of products sold 30048 31671
Operating, general and administrative expenses 77107 82913
Provision for credit losses on finance receivables 0 2874
Interest expense related to finance subsidiary 3350 5025
351531 390909
Income - Loss from operations -9509 50310
Other income - expense:
Gain on sale of assets
Interest expense -22822 -21107
Miscellaneous 5464 1514
-17358 -19593
Income - Loss before income taxes -26867 30717
Provision for income taxes 0 970
Net income - loss -26867 29747
Net income - loss per common share -0.02 0.02
F-22
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDING APRIL 30
4-30-95 4-30-94
Revenues:
Net service and operating revenues 955342 948902
Net product sales 98479 89587
Finance charges and other finance income 76348 173069
1130169 1211558
Cost and expenses:
Cost of service and operating revenues 754108 754995
Cost of products sold 85581 76917
Operating, general and administrative expenses 269360 252616
Provision for credit losses on finance receivables 7436 11535
Interest expense related to finance subsidiary 11725 15075
1128210 1111138
Income - Loss from operations 1959 100420
Other income - expense:
Gain on sale of assets 121008 0
Interest expense -64912 -56347
Miscellaneous 16695 4532
72791 -51815
Income - Loss before income taxes 74750 48605
Provision for income taxes 1618 2200
Net income - loss 73132 46405
Net income - loss per common share 0.04 0.03
F-23
LINCOLN INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE YEAR TO DATE TO 4-30-95
Cash flows from operating activities: 1995 1994
Net loss (-) 73132 46405
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 53554 52947
Provision for credit losses on
finance receivables -12848 984
Gain on sale of fixed assets 3867 0
Other receivables 1933 8600
Inventories -185 8188
Prepaid expenses 9034 -3523
Accounts payable -26085 -32843
Income taxes payable 1618 2200
Accrued expenses -22074 -27405
Deferred insurance commissions -2435 -246
Total adjustments 6379 8902
Net Cash provided by (used in) operating activities 79511 55307
Cash flows from investing activities:
Loans originated 0 -703714
Loans repaid or sold 533995 705633
Proceeds from sale of fixed assets 3200 0
Purchase of property and equipment -17173 -29326
Net cash provided by (used in) investing activities 520022 -27407
Cash flows from financing activities:
Net borrowings (repayments) under
short term notes payable -90379 48913
Principal payments on long-term debt -129075 -56092
Net cash provided by (used in) financing activities -219454 -7179
Net increase (-decrease) in cash 380079 20721
Cash, beginning of year 21238 23061
Cash, end of period 401317 43782
Supplemental disclosure of cash flow information:
Cash paid during the year for interest 66459 72824
F-24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
04/30/95
AGRI-BUSINESS
BOURBON STOCKYARD
The revenues of Bourbon Stock Yard are based primarily on the number of
livestock handled during the year, and the number of livestock handled is
determined by the cash price being paid for livestock, and various factors which
influence farming conditions. Operating costs generally are influenced directly
by the number of livestock received since additional labor is required to handle
additional cattle.
Net revenue from stockyard operations was down approximately $45,000 or 13%
during the quarter ended April 30, 1995 as compared to the quarter ended April
30, 1994. For the 9 months ending April 30, 1995 net revenue decreased by
approximately $8,000 or 1% as compared to 1994. Approximately 3,200 less cattle
and 300 more hogs were received during the 9 month period as compared to 1994.
Operating costs for the quarter ended April 30, 1995 were down approximately
$27,000 or 9% as compared to the same quarter ended April 30, 1994. For the 9
months ending April 30, 1995 operating costs decreased approximately $1,000 or
0% as compared to 1994. This decrease reflects a decrease in employees and
general cost cutting of operating expenses.
There continues to be a build up of inventory of cattle on the farm in the
local area. Receipts should improve in the future as a result of this inventory
build up, however, it could be as much as 1 to 2 years before there is a general
sell off of the cattle on the farm depending on the price and/or feed supply.
Net revenue from stockyard operations was up approximately $29,000 or 9%
during the quarter ended April 30, 1994 as compared to the quarter ended April
30, 1993. For the 9 months ended April 30, 1994 net revenue increased by
approximately $30,000 or 3% as compared to 1993. Approximately 1,500 less
cattle and 4,000 less hogs were received during the 9 month period as compared
to 1993.
Operating costs for the quarter ended April 30, 1994 were approximately the
same as compared to the same quarter ended April 30, 1993. For the 9 months
ending April 30, 1994 operating costs decreased approximately $60,000 or 7% as
compared to 1993. This decrease reflects a decrease in employees and general
cost cutting of operating expenses.
Bourbon Stock Yard had no capital commitments at April 30, 1995.
The stockyard had approximately $29,000 in accounts payable and accrued
liabilities at April 30, 1995. This is a normal amount at this time of the year
and is well within its cash flow ability to handle these obligations as they
become due. All funds in excess of expenses are available to the parent.
F-25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
04/30/95
FINANCE BUSINESS
LINCOLN FINANCE CO.
Revenues in Lincoln Finance Co. are determined by the amount of interest
earned on small loans outstanding. The major factor which influences operating
costs of the finance operation is the uncollectable accounts due to bankruptcy
or other factors.
During the second quarter of fiscal year 1995 Lincoln Finance Company sold
it s loan portfolio. As a result there was no income or expenses during the
current quarter.
For the year to date revenues were down approximately $94,000 and expenses
were down approximately $51,000.
Finance revenues were up approximately $3,600 or 6% for the quarter ended
April 30, 1994 as compared to the quarter ended April 30, 1993. For the 9
months ending April 30, 1994 finance revenues were up approximately $6,000 or 4%
as compared to 1993. This increase is the result of the increase in the total
loan portfolio.
Operating costs for the quarter ended April 30, 1994 were up approximately
$2,000 or 7% as compared to the quarter ended April 30, 1993. Operating costs
for the 9 months were up approximately $2,000 or 2% as compared to 1993. This
increase in expenses is attributed to increase in the total loan portfolio.
Interest cost was approximately the same for the quarter as compared to 1993.
State law controls the maximum size and the amount of interest which can be
charged on small loans.
F-26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
04/30/95
CONSOLIDATED OPERATIONS
Net revenues decreased by approximately $93,000 or 23% for the quarter ending
April 30, 1995 as compared to the quarter ending April 30, 1994 due to decreased
income at Lincoln Finance Co. Net revenues for the 9 months ending April 30,
1995 decreased by approximately $78,000 or 7% as compared to 1994. This
decrease is attributed to Lincoln Finance Co.
Operating costs for the quarter ending April 30, 1995 were down approximately
$39,000 or 10% as compared to 1994. For the 9 months operating costs were up
approximately $15,000 or 1% as compared to 1994.
Net revenues increased by approximately $33,000 or 9% for the quarter ending
April 30, 1994 as compared to the quarter ending April 30, 1993 due to increased
income at Bourbon Stock Yard. Net revenues for the 9 months ending April 30,
1994 increased by approximately $29,000 or 3% as compared to 1993. This
increase is attributed to Bourbon Stock Yard.
Operating costs for the quarter ending April 30, 1994 were approximately the
same as compared to 1993. For the 9 months operating costs were down
approximately $74,000 or 6% as compared to 1993. The decreased costs were
primarily the reductions in Bourbon Stock Yard.
There were no capital commitments at April 30, 1995.
Working capital at July 31, 1994 was approximately -$59,000. At April 30,
1995 working capital was approximately $37,000.
NO DIVIDENDS WERE PAID BY THE COMPANY DURING THE INTERIM PERIOD.
Lincoln International Corporation was not required to file a Form 8 K during
the last quarter.
The unaudited consolidated financial statements include the accounts of the
Company and all of it s subsidiaries after eliminating all material inter-
company accounts and transactions. They reflect all adjustments which are
necessary in the opinion of management to fairly state the financial position of
the Company at April 30, 1995 and the result of it s operations and cash flow
for the period ended.
F-27
Ratio of earnings to fixed charges:
7/31/94 7/31/93 4/30/94 4/30/95
________ ________ ________ ________
-0.35 -0.54 0.35 0.52
Book value per share:
7/31/94 4/30/95
________ ________
.31/share .35/share
F-28