Company Quick10K Filing
Quick10K
Pismo Coast Village
10-Q 2019-06-30 Quarter: 2019-06-30
10-Q 2019-03-31 Quarter: 2019-03-31
10-Q 2018-12-31 Quarter: 2018-12-31
10-K 2018-09-30 Annual: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-Q 2017-12-31 Quarter: 2017-12-31
10-K 2017-09-30 Annual: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-Q 2016-12-31 Quarter: 2016-12-31
10-K 2016-09-30 Annual: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-Q 2015-12-31 Quarter: 2015-12-31
10-K 2015-09-30 Annual: 2015-09-30
10-Q 2015-03-31 Quarter: 2015-03-31
10-Q 2014-12-31 Quarter: 2014-12-31
10-K 2014-09-30 Annual: 2014-09-30
10-Q 2014-06-30 Quarter: 2014-06-30
10-Q 2014-03-31 Quarter: 2014-03-31
10-Q 2013-12-31 Quarter: 2013-12-31
8-K 2019-01-22 Officers, Shareholder Vote
8-K 2018-09-18 Enter Agreement
8-K 2018-01-22 Officers, Shareholder Vote
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PCV 2019-06-30
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosure About Market Risk
Item 4T. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters To A Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
Note 1 - Nature of Business
Note 2 - Summary of Significant Accounting Policies
Note 3 - Property and Equipment
Note 4 - Line of Credit
Note 5 - Capital Lease Obligations
Note 6 - Common Stock
Note 7 - Income Taxes
Note 8 - Operating Leases
Note 9 - Employee Retirement Plans
Note 10 - Subsequent Events
EX-31.1 exhibit31_1.htm
EX-31.2 exhibit31_2.htm
EX-31.3 exhibit31_3.htm
EX-32.1 exhibit32_1.htm
EX-32.2 exhibit32_2.htm
EX-32.3 exhibit32_3.htm

Pismo Coast Village Earnings 2019-06-30

PCV 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 form10q.htm FORM 10-Q Form 10-Q

     

 

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

 

For the quarterly period ended June 30, 2019

 

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)                                                                                                                                                     (Zip Code)

(805) 773-5649

Registrant’s telephone number, including area code

 

(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) 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

[X] Non-accelerated filer

 

[X] Smaller reporting company

[  ] Emerging growth company

 

 

1



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.           [  ]

 

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.

 

2


 

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 economy volatility. 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 year-to-date site occupancy is down 4.3% compared to this time last year primarily due to 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 trending even to last year, and management feels this is directly related to the economy, and that this trend will continue throughout the remainder of the fiscal year.

 

RV storage continues to be a major source of revenue for the Company and had growth of 0.8% 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 2017.

 

The Company’s commitment to quality, value, and enjoyment is underscored by the business’ 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, 2019, increased $88,794, or 4.5%, above the same period in 2018. Resort Income for the nine months ended June 30, 2019, increased $22,316, or 0.4%, above the same period ended June 30, 2018. This increase in the quarter ending June 30, 2019, is due primarily to the timing of Spring Break, an annual high occupancy period of two weeks, which this year was during the third quarter. The increase in Resort Operations Income for the nine-month period reflects increases in RV towing of $18,774, and RV Service of $17,574.  Site revenue year-to-date was down $7,279, mostly due to weather.  Management feels revenues reflect ongoing loyalty from return customers that appreciate the Resort’s location and commitment to quality guest services.

 

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.

 

3


 

Income from Retail Operations, for the three-month period ending June 30, 2019, increased $2,499, or 0.8%, above the same period in 2018. This increase reflects a $3,000, or 2.4%, increase in RV Service revenue, and, a decrease in the General Store revenue of $500, or 0.3%. Income from Retail Operations for the nine-month period ending June 30, 2019, decreased by $17,569, or 2.2%, below the same period ended June 30, 2018. This year-to-date income reflects a $17,574, or 5.0%, increase in RV Service income, and a $35,143, or 7.6%, decrease in General Store income. Management feels this decrease in revenue from the General Store operation reflects decreased occupancy and the reduction of store operating hours. The Company anticipates similar activity in both income from resort operations and retail operations through the remainder of fiscal year 2019.

 

Operating expenses for the quarter ended June 30, 2019, decreased $45,100, or 3.4%, from the same period in 2018. This decrease in expense is primarily a result of workers’ compensation, and repairs and maintenance. Operating expenses for the nine-month period ended June 30, 2019, increased $61,549, or 1.6%, from the same period in 2018. This increase is primarily due to labor, landscape services, credit card service, electricity, repairs and maintenance, advertising, and television program expense.

 

Cost of Goods Sold for 2019 are within projected levels at 48.8% of retail sales for the quarter and 48.4% year-to-date. Cost of Goods Sold for 2018 was PY 49.5% and 47.7%, respectively.

 

Interest Expense for the three-month and nine-month periods ended June 30, 2019, is $5,331 and $11,276, respectively, compared to $2,539 and $7,342 the previous year. This increase in interest expense reflects the current capital lease obligations which are primarily for trucks used in the company’s RV storage and towing operation.

 

Income Before Provision for Income Tax for the three-month period ended June 30, 2019, increased by $242,096, reflecting increased total income compared to the previous year and decreased operating expenses. For the six months ended June 30, 2019, Income Before Provisions for Income Tax increased by $52,028, reflecting increased total income, increased operating expenses, and a gain on disposal of assets. Revenues during this period are directly attributed to and are consistent with seasonal occupancy of a tourist-oriented business.

 

Net Income for the quarter ending June 30, 2019, increased by $229,646, or 52.0%, compared with the same period ending June 30, 2018. This quarterly increase in Net Income is primarily due to increased resort operations and retail revenue as a result of the timing of Spring Break and decreased operating expenses. Net Income for the nine months ending June 30, 2019, decreased by $202,052, or 16.8%, compared with the same period ending June 30, 2018. This decrease in Net Income is a result of a decrease in retail operations revenue, an increase in operating expenses, and an increase in income tax. The last quarter of 2019 is expected to provide adequate resources for continuing business and provide for planned capital expenditures.

 

Management has introduced various marketing promotions with reduced rates to increase revenues during low occupancy periods. However, 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 as 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.

 

4



LIQUIDITY

The Company's current cash position, as of June 30, 2019, is $4,917,007, which is 28.6% more than the same position in 2018. This increase is primarily due to increased revenues, and timing of capital expenditures. The cash balance increased $714,571, or 17%, from fiscal year ended September 30, 2018, due to increased rental deposits, tax reform, and timing of capital expenditures. The present level of cash is being maintained in anticipation of large capital expenditures in the current and upcoming fiscal year, which includes the new RV service and repair facility.

 

Accounts Payable and Accrued Liabilities increased $46,923, or 21.3% to an amount of $266,820 for June 30, 2019, compared to the same period ending 2018. This increase was primarily due to timing of payment of monthly liabilities, which includes construction costs for the new RV service and repair facility. All undisputed payables have been paid in full according to the Company's policy.

 

Accounts Receivable for the period ending June 30, 2019, increased $110,448 above June 30, 2018, and reflects the sale of securities in which payment had not been received.

 

The Company has consistently demonstrated an ability to optimize revenues developed from Resort and Retail Operations during the summer season. During other less revenue producing periods, RV storage space and site rentals are paid for in advance and used for Resort improvements and cash reserves. The Company has a revolving line 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.

 

CAPITAL RESOURCES AND PLANNED EXPENDITURES

The Company plans capital expenditures of approximately $1,350,000 in fiscal year 2019 to further enhance the Resort facilities and services. These projects include building a new RV Service and Repair facility, purchase of a new RV storage tow vehicle, and Resort surveillance upgrade. 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.

 

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.

 

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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not Applicable

 

5



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, 2019, 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, 2018.

 

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-months ended June 30, 2018, 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

 

6



ITEM 6. EXHIBITS

 

Exhibit No.

 

Description of Exhibit

 

 

31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Terris Hughes,
President and Chairman of the Board)

 

 

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(Jay Jamison, Chief Executive Officer and principal executive officer)

 

 

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)

 

 

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)

 

 

32.2

Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Jay Jamison, Chief Executive Officer and principal executive officer)

 

 

32.3

Certification Pursuant to 18 U. S. C. Subsection 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Wayne Hardesty, Chief Financial Officer, principal financial officer and principal accounting officer)

 

 

 

7


 

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:          August 14, 2019

 

Signature:   /s/ TERRIS HUGHES                                                                

Terris Hughes, President and Chairman of the Board

 

 

Date:          August 14, 2019

 

Signature:   /s/ WAYNE HARDESTY                                                           

Wayne Hardesty, V.P. - Finance/Chief Financial Officer

(principal financial officer and principal accounting officer)

 

 

Date:          August 14, 2019

 

Signature:   /s/ JAY JAMISON                                                                     

Jay Jamison, General Manager/Chief Executive Officer

(principal executive officer)

 

 

8



REPORT OF INDEPENDENT REGISTERED

 

PUBLIC ACCOUNTING FIRM

 

                                                                                                                                     

 

To the Board of Directors

and Stockholders of Pismo Coast Village, Inc.

165 South Dolliver Street

Pismo Beach, California

 

 

Results of Review of Interim Financial Information

 

 

We have reviewed the balance sheets of Pismo Coast Village, Inc., (the Company) as of June 30, 2019 and 2018, and the related statements of income and comprehensive income for the three-month and nine month periods ended June 30, 2019 and 2018, and statements of cash flows for the three-month and nine month periods then ended, and the related notes (collectively referred to as the interim financial statements). Based on our reviews, 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 the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the balance sheet of the Company as of September 30, 2018, and the related statements of income, comprehensive income, retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated November 23, 2018, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of September 30, 2018, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

 

Basis for Review Results

 

These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. 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 standards of the PCAOB, 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. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U. S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

 

 

 

Bakersfield, California

August 14, 2019

 

9


 

PISMO COAST VILLAGE, INC.

BALANCE SHEETS

JUNE 30, 2019 AND 2018 AND SEPTEMBER 30, 2018

 June 30,

2019

  (Unaudited) 

September 30,

2018

     (Audited)   

 June 30,

2018

  (Unaudited) 

ASSETS

Current Assets

Cash and cash equivalents

$

4,917,007

$

4,202,436

$

3,823,056

Accounts receivable

136,554

55,409

26,106

Inventories

195,846

182,437

206,242

Prepaid income taxes

63,100

-

140,100

Prepaid expenses

19,743

15,423

8,074

Deposits

 

-

 

-

 

2,090

Total current assets

5,332,250

4,455,705

4,205,668

Property and equipment

Net of accumulated depreciation and amortization

15,180,637

14,607,089

14,653,365

Investments

 

-

 

111,204

 

-

Total Assets

$

20,512,887

$

19,173,998

$

18,859,033

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities

Accounts payable and accrued liabilities

$

266,820

$

251,861

$

219,897

Accrued salaries and vacation

108,567

338,106

97,291

Rental deposits

2,167,305

1,499,084

1,985,736

Income taxes payable

-

8,300

-

Current portion of note payable

-

-

-

Current portion of capital lease obligations

 

49,390

 

40,426

 

46,859

Total current liabilities

2,592,082

2,137,777

2,349,783

Long-Term Liabilities

Deferred taxes

449,000

520,300

486,500

Capital lease obligations, net of current portion

 

203,502

 

168,476

 

176,594

Total Liabilities

 

3,244,584

 

2,826,553

 

3,012,877

Stockholders’ Equity

Common stock – no par value, 1,800 shares
    issued, 1,775 and 1,775 shares outstanding at
    June 30, 2019 and 2018, respectively

5,569,268

5,569,268

5,569,268

Retained earnings

11,699,035

10,700,173

10,276,888

Accumulated other comprehensive income

 

-

 

78,004

 

-

Total stockholders’ equity

 

17,268,303

 

16,347,445

 

15,846,156

Total Liabilities and Stockholders’ Equity

$

20,512,887

$

19,173,998

$

18,859,033

The accompanying notes are an integral part of these financial statements.

 

10


 

PISMO COAST VILLAGE, INC.

STATEMENTS OF INCOME AND RETAINED EARNINGS

(UNAUDITED)

THREE AND NINE MONTHS ENDED JUNE 30, 2019 AND 2018

Three Months

Ended June 30,

Nine Months

Ended June 30,

2019

2018

2019

2018

Income

Resort operations

$

2,071,864

$

1,983,070

$

5,163,269

$

5,140,953

Retail operations

 

315,516

 

313,017

 

796,115

 

813,684

Total income

 

2,387,380

 

2,296,087

 

5,959,384

 

5,954,637

Cost and Expenses

Operating expenses

1,282,443

1,327,543

3,944,391

3,882,842

Cost of goods sold

153,939

154,864

385,665

387,765

Depreciation and amortization

 

107,848

 

109,876

 

320,472

 

323,618

Total cost and expenses

 

1,544,230

 

1,592,283

 

4,650,528

 

4,594,225

Income from Operations

 

843,150

 

703,804

 

1,308,856

 

1,360,412

Other Income (Expense)

Interest and dividend income

1,525

1,469

4,577

3,745

Interest expense

(5,331)

(2,539)

(11,276)

(7,342)

Gain (loss) on disposal of fixed assets

-

1,400

1,200

1,400

Gain (loss) on sale of investments

 

106,886

 

-

 

106,886

 

-

Total other income (expense)

 

103,080

 

330

 

101,387

 

(2,197)

Income Before Provision for Income
    Tax

946,230

704,134

1,410,243

1,358,215

Income Tax (Expense)

 

(275,000)

 

(262,550)

 

(411,380)

 

(157,300)

Net Income

$

671,230

$

441,584

$

998,863

$

1,200,915

Other Comprehensive Income

Change in unrealized holding gains on
available-for-sale securities, net of
change in applicable deferred taxes of
$3,400

 

(66,861)

 

-

 

(78,004)

 

-

Total other comprehensive income

 

(66,861)

 

-

 

(78,004)

 

-

Total Comprehensive Income

$

604,369

$

441,584

$

920,859

$

1,200,915

Net Income Per Share

$

378.16

$

248.78

$

562.74

$

676.57

Total Comprehensive Income Per
    Share

$

340.49

$

248.78

$

518.79

$

676.57

The accompanying notes are an integral part of these financial statements.

 

11


 

PISMO COAST VILLAGE, INC.

STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

THREE AND NINE MONTHS ENDED JUNE 30, 2019 AND 2018

Accumulated

Other

Comprehensive

Income

    Common Stock   

  Retained

  Earnings 

Shares

  Amount 

     Total     

Balance - March 31, 2018

1,775

$

5,569,268

$

9,835,304

$

-

$

15,404,572

Net Income

-

 

-

 

441,584

 

-

 

441,584

Balance – June 30, 2018

1,775

$

5,569,268

$

10,276,888

$

-

$

15,846,156

Net Income

-

-

423,285

-

423,285

Other comprehensive income

-

 

-

 

-

 

78,004

 

78,004

Balance – September 30, 2018

1,775

$

5,569,268

$

10,700,173

$

78,004

$

16,347,445

Net Income

-

-

146,933

-

146,933

Other comprehensive loss

-

 

-

 

-

 

(19,169)

 

(19,169)

Balance – December 31, 2018

1,775

$

5,569,268

$

10,847,106

$

58,835

$

16,475,209

Net Income

-

-

180,699

-

180,699

Other comprehensive income

-

 

-

 

-

 

8,026

 

8,026

Balance – March 31, 2019

1,775

$

5,569,268

$

11,027,805

$

66,861

$

16,663,934

Net Income

-

-

671,230

-

671,230

Other comprehensive income

-

 

-

 

-

 

(66,861)

 

(66,861)

Balance – June 30, 2019

1,775

$

5,569,268

$

11,699,035

 

-

$

17,268,303

The accompanying notes are an integral part of these financial statements.

 

12


 

PISMO COAST VILLAGE, INC.

STATEMENTS OF CASH FLOWS (UNAUDITED)

NINE MONTHS ENDED JUNE 30, 2019 AND 2018

2019

2018

Cash Flows From Operating Activities

Net Income

$

998,863

$

1,200,915

Adjustments to reconcile net income to net
     cash provided by operating activities:

Depreciation and amortization

$

320,472

$

323,618

(Increase) in accounts receivable

(81,145)

(4,845)

(Increase) in inventory

(13,409)

(15,219)

(Increase) in prepaid income taxes

(19,743)

(140,100)

Decrease in prepaid expenses

(47,677)

11,902

(Increase) in Deposits

-

(2,090)

(Decrease) in accounts payable and
   accrued liabilities

14,959

(47,853)

(Decrease) in accrued salaries and vacation

(229,539)

(228,791)

Increase in rental deposits

668,221

496,850

(Decrease) in income taxes payable

(8,300)

(52,600)

(Decrease) in long term deferred
    income taxes

 

(38,100)

 

(324,100)

Total adjustments

 

565,739

 

16,772

Net cash provided by operating activities

1,564,602

1,217,687

Cash Flows From Investing Activities

Proceeds from sale of property and equipment

1,200

-

Purchases of property and equipment

 

(895,221)

 

(251,110)

Net cash used in investing activities

(894,021)

(251,110)

Cash Flows from Financing Activities

Acquisition of capital lease assets

81,369

81,369

Principal payments on capital lease obligations

 

(37,379)

 

(36,656)

Net cash provided by (used in) financing
    Activities

 

43,990

 

44,713

Net increase in cash and cash equivalents

714,571

1,011,290

Cash and Cash Equivalents – Beginning of
    Period

 

4,202,436

 

2,811,766

Cash and Cash Equivalents – End of Period

$

4,917,007

$

3,823,056

Schedule of Payments of Interest and Taxes

Payments for interest

$

(11,276)

$

7,342

Payments for income tax

$

515,000

$

604,050

The accompanying notes are an integral part of these financial statements.

 

13


 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

 

 

NOTE 1 – 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.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Revenue and Cost Recognition

 

The Company’s revenue is recognized on the accrual basis as earned based on the date of stay. Expenditures are recorded on the accrual basis whereby expenses are recorded when incurred, rather than when paid.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers all highly liquid investments including certificates of deposit with an original maturity of three months or less when purchased to be cash equivalents. As of June 30, 2019, September 30, 2018, and June 30, 2018, the Company had $6,084, $6,070 and $6,065 of cash equivalents.

 

Allowance for Doubtful Accounts

 

It is the policy of management to review the outstanding accounts 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 June 30, 2019, September 30, 2018, or June 30, 2018.

 

Inventories

 

Inventories have been valued at the lower of cost or market on a first-in, first-out basis. Inventories are comprised primarily of finished goods in the general store and in the RV repair shop.

 

Property and Equipment

 

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

 

 

Investments

 

Investments in securities have been classified in the balance sheet, according to management’s intent, as securities available-for-sale under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 320 Investments – Debt and Equity Securities.

 

14



PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 2

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Investment (continued)

 

Available-for-sale securities consist of investment securities not classified as trading securities nor as held-to-maturity securities. Unrealized holding gains and losses, net of deferred taxes, on available-for-sale securities are reported as a net amount in a separate component of stockholders’ equity until realized. Gains and losses on the sale of available-for-sale securities are determined using the specific identification method.

 

Fair Value Measurements

 

The Company records its financial assets and liabilities at fair value in accordance with the Fair Value Measurements and Disclosures Topic of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) (the Topic). This Topic provides a framework for measuring fair value, clarifies the definition of fair value and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Topic also establishes a three-tier hierarchy, as follows, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

 

Level 1:  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Company has the ability to access.

 

Level 2:  Inputs to the valuation methodology include:

 

*     Quoted prices for similar assets and liabilities in active markets;

*     Quoted prices for identical or similar assets or liabilities in inactive markets;

*     Inputs other than quoted prices that are observable for the asset or liability;

*     Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

 

Level 3:  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The following is a description of the valuation methodologies used for assets measured at fair value:

 

Investments:  Investments in common stock are recorded at fair value based upon quoted market prices using Level 1 inputs.

 

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

 

At June 30, 2019, the following sets forth by level, within the fair value hierarchy, the Company’s assets at fair value:

 

15



PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 3

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Fair Value Measurements (continued)

 

 

     Level 1    

     Level 2   

     Level 3   

Investment in common stock

$

 -

$

 -

$

 -

Total assets at fair value

$

 -

$

 -

$

 -

 

At September 30, 2018, the following sets forth by level, within the fair value hierarchy, the Company’s assets at fair value:

 

     Level 1    

     Level 2   

     Level 3   

Investment in common stock

$

111,204

$

 -

$

 -

Total assets at fair value

$

111,204

$

 -

$

 -

 

Earnings Per Share

 

The earnings per share are based on the 1,775 shares issued and outstanding. The financial statements report only basic earnings per share, as there are no potentially dilutive shares outstanding.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

Advertising

 

The Company follows the policy of charging the costs of non-direct advertising as incurred. Advertising expense was $35,983 and $23,446 for the nine months ended June 30, 2019 and 2018, respectively, and $5,228 and $4,314 for the three months ended June 30, 2019 and 2018, respectively. Advertising expense was included in operating expenses on the Statement of Operations.

 

Concentration of Credit Risk

 

At June 30, 2019, September 30, 2018, and June 30, 2018, the Company had cash deposits of $3,026,421, $2,301,721, and $1,944,344 in excess of the $250,000 federally insured limit with Pacific Premier Bank, respectively. However, because Pacific Premier Bank is a member of the Certificate of Deposit Account Registry Service (CDARS), 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 issue CDs in amounts under $250,000, so that the entire deposit balance is eligible for FDIC Insurance.

 

16



PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 4

 

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Income Taxes

 

The Company uses the asset-liability method of computing deferred taxes in accordance with Accounting Standards Codification (ASC) Income Taxes topic. 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.

 

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, 2019, 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. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes, and accordingly no interest or penalties associated with income taxes have been included in this calculation, or separately in the Statement of Operations and Retained Earnings. The Company does not expect any material changes through June 30, 2020. Although the Company does not maintain any uncertain tax positions, tax returns remain subject to examination by the Internal Revenue Service for fiscal years ending on or after September 30, 2016 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2015.

 

NOTE 3 – PROPERTY AND EQUIPMENT

 

At June 30, 2019, September 30, 2018, and June 30, 2018, property and equipment included the following:

 

 

June 30,

2019

September 30,

2018

June 30,

2018

Land

$

10,394,746

$

10,394,746

$

10,394,746

Building and resort improvements

11,353,001

11,342,501

11,353,982

Furniture, fixtures, equipment and 
    leasehold improvements

687,354

677,268

666,770

Transportation equipment

768,755

709,115

745,971

Construction in progress

 

1,085,233

 

325,489

 

270,015

24,289,089

23,449,119

23,431,484

Less accumulated depreciation

 

(9,108,452)

 

(8,842,030)

 

(8,778,119)

$

15,180,637

$

14,607,089

$

14,653,365

 

Depreciation and amortization expense was $320,472 and $323,618 for the nine months ended June 30, 2019 and 2018, respectively, and $107,848 and $109,876 for the three months ended June 30, 2019 and 2018, respectively.

 

At June 30, 2019, September 30, 2018, and June 30, 2018, the cost of assets under capital lease was $398,770, $374,171, and $374,171, respectively, and related accumulated amortization was $185,128, $196,397, and $182,776, respectively. Amortization expense on assets under capital lease was $44,554 and $35,440 for the nine months ended June 30, 2019 and 2018, respectively, and $16,207 and $13,621 for the three months ended June 30, 2019 and 2018, respectively.

 

17


 

PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 5

 

NOTE 4 – LINE OF CREDIT

 

The Company has a revolving line of credit with Pacific Premier Bank for $500,000, expiring April 1, 2020. There currently is a Letter of Credit written in favor of the County of San Luis Obispo (the County), California for $416,062 to cover a bond requirement relating to public improvements as part of the Company’s construction of a new RV service facility. If the Company fails to complete the required public improvements, monies will be draw from the credit line to satisfy the County. A balance of $83,938 is available if the Company requires additional funding from the line of credit. The Company expects the RV service facility project to be completed and bond satisfied by December 31, 2019.

 

NOTE 5 – Capital Lease Obligations

 

At June 30, 2019, September 30, 2018, and June 30, 2018, capital lease obligations consisted of the following:

 

 

June 30,

2019

(Unaudited)

September 30,

2018

(Audited)

June 30,

2018

(Unaudited)

A 2013 Hino truck leased from Donahue Transportation 
Services Corp, payable in monthly installments of
$1,046, including interest at 4.75% per annum, through
April 2019.

$

-

$

7,210

$

10,239

 

 

 

 

 

 

 

 

 

A security system for Lot-K leased from RLC Funding, 
payable in monthly installments of $1,295, including 
interest at 13.54% per annum, through October 2018.

 -

1,280

5,037

 

 

 

 

 

 

 

 

 

A 2016 Hino truck leased from Donahue Transportation 
Services Corp, payable in monthly installments of
$1,116, including interest at 4.53% per annum, through
January 2023.

44,217

52,600

55,332

 

 

 

 

 

 

 

 

 

A 2018 Hino truck leased from Donahue Transportation 
Services Corp, payable in monthly installments of
$1,116, including interest at 4.644% per annum, through
September 2024.

62,287

70,012

72,527

 

 

 

 

 

 

 

 

 

A 2019 Hino truck leased from Donahue Transportation 
Services Corp, payable in monthly installments of
$1,116, including interest at 4.181% per annum, through
May 2025.

70,090

77,800

80,318

 

 

 

 

 

 

 

 

 

A 2019 Hino truck leased from Donahue Transportation 
Services Corp, payable in monthly installments of
$1,116, including interest at 4.101% per annum, through
December 2025.

 

76,298

 

 -

 

 -

252,892

208,902

223,453

Less current portion

 

(49,390)

 

(40,426)

 

(46,859)

Total capital lease obligations, net of current portion

$

203,502

$

168,476

$

176,594

 

 

18



PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 6

 

 

NOTE 5 – Capital Lease Obligations (Continued)

 

At June 30, 2019, future minimum payments on the capital lease obligations were as follows:

 

 

For the Year Ending June 30,

2019

$

53,568

2020

53,568

2021

53,568

2022

53,568

2023

41,292

Thereafter

 

29,016

Total minimum lease payments

284,580

Less amount representing interest

 

(31,688)

Present value of lease payments

252,892

Less current portion

 

(49,390)

Capital lease obligations, net of current portion

$

203,502

 

 

NOTE 6 – COMMON STOCK

 

Each share of stock is intended to provide the shareholder with free use of the resort for a maximum of 45 days per year. If the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.

 

A shareholder is entitled to a pro rata share of any dividends as well as a pro rata share of the assets of the Company in the event of its liquidation or sale. The shares are personal property and do not constitute an interest in real property. The ownership of a share does not entitle the owner to any interest in any particular site or camping period.

 

NOTE 7 – INCOME TAXES

 

The provision for income taxes for the three months and nine months ending June 30, 2019 and 2018 is as follows:

 

Three Months Ended
June 30,

Nine Months Ended
June 30,

2019

2018

2019

2018

Income tax expense

$

275,000

$

262,550

$

411,380

$

157,300

 

The Company uses the asset-liability method of computing deferred taxes in accordance with FASB ASC Topic 740. The difference between the effective tax rate and the statutory tax rates is due primarily to the effects of the state taxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.

 

As of June 30, 2019, September 30, 2018, and June 30, 2018, the Company’s deferred tax liability was $449,000, $520,300 and $486,500, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The majority of the balance is due to timing differences of depreciation expense, caused by the use of accelerated depreciation methods for tax calculations.

 

19



PISMO COAST VILLAGE, INC.

NOTES TO FINANCIAL STATEMENTS

AS OF JUNE 30, 2019 AND 2018 (Unaudited) AND SEPTEMBER 30, 2018 (Audited)

PAGE 7

 

 

NOTE 8 – OPERATING LEASES

 

The Company leases a lot located in Oceano, California, for $3,302 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 $384 per month. Future minimum lease payments under this obligation are as follows:

 

 

For the Twelve Months Ending June 30,

2019

$

4,608

2020

     4,608

2021

     4,608

2022

 

768

$

14,592

 

 

Rent expense under these lease agreements was $33,466 and $32,433 for the nine months ended June 30, 2019 and 2018, respectively, and $11,148 and $10,759 for the three months ended June 30, 2019 and 2018, respectively.

 

NOTE 9 – EMPLOYEE RETIREMENT PLANS

 

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 $56,692 and $50,052 for the nine months ended June 30, 2019 and 2018, respectively, and $16,545 and $16,176 for the three months ended June 30, 2019 and 2018, respectively.

 

NOTE 10 – SUBSEQUENT EVENTS

 

Events subsequent to June 30, 2019 have been evaluated through August 14, 2019, which is the date the financial statements were available to be issued. Management did not identify any subsequent events that require disclosure.

 

 

 

20