ITEM 1. BUSINESS
a. General Development of Business
The First Republic Corporation of America (the "Company") was incorporated in the State of Delaware in February 1961, and is presently engaged, either directly or through its subsidiaries, in the real estate, hotel, seafood, textile, and health care businesses. See Item 1(c) for a description of the business engaged in by the Company and its subsidiaries.
During the 1994 fiscal year, the Company obtained a $3,000,000 mortgage loan on the Greensboro South Shopping Center it owns in Greensboro, North Carolina, which loan bears interest at the rate of 8.5% per annum, is self-liquidating, and provides for 180 payments of $29,543, including interest and principal, commencing April 1, 1994 and expiring March 1, 2009.
b. Financial Information about Industry Segments
The sales and operating profit (loss) from operations and the identifiable assets attributable to each industry segment for the three years ended June 30, 1994 are set forth in Note 13 (Industry Segments) of the Notes to Consolidated Financial Statements, which are incorporated herein by reference to Item 8. hereof.
c. Narrative Description of Business
Real Estate
The Company owns various loft buildings, office buildings, industrial buildings, shopping centers, residential and other properties, situated along the East Coast of the United States in Massachusetts, Rhode Island, New York, New Jersey, Pennsylvania, Virginia, North Carolina and Florida. A general description of these properties is provided in Item 2.
Item 2 - -Health Care Segment below) contain 180 beds and 240 beds, respectively, and each facility provides skilled and intermediate nursing care to both private and Medicaid residents. The Rochelle Park Facility also includes a 121-unit senior citizen residence and an adult day care center. Skilled and intermediate care facilities provide nursing services through the use of professional and nonprofessional employees. The nursing homes attempt to obtain residents through referrals from acute care hospitals, physicians, residential care facilities, church groups and other service organizations in the communities in which the facilities are located. There are competing facilities in these communities. In competing for residents, the reputation of the Company's facilities in the community and their physical appearance are important factors, since members of the resident's family generally participate to a greater extent in selecting skilled and intermediate nursing facilities than in selecting an acute care hospital. The Company's facilities also experience competition in employing and retaining high quality professionals and nonprofessional employees, including nurses, technicians, aides and others. The Company also owns a 49.9% partnership interest in a nursing home in Whiting, New Jersey. This facility is net leased to the operator of the facility under a lease which expires on December 31, 2011.
Merrimac
The Company, through Merrimac Corp. and its subsidiaries ("Merrimac"), was engaged in the manufacture, purchase and distribution of upscale and moderately priced giftware and the commercial real estate business. Merrimac was merged into the Company in the 1993 fiscal year. See item 2 below for information relating to the properties formerly owned by Merrimac in Brookhaven, Pennsylvania and Newburyport, Massachusetts, and Note 2 of Notes to Consolidated Financial Statements for additional information relating to Merrimac.
ITEM 2. PROPERTIES
Location General Character (1) Real Estate Segment
Video Film Center 10-story office building 315-329 W. 44th Street square feet; 70% rented New York, New York
Junior Coat Building 18-story office, showroom and 250 W. 39th Street manufacturing facility; New York, New York 182,000 rentable square feet; 90% rented.
Jefferson National Bank Building 6-story office building; 39,300 4100 Pinetree Drive rentable square feet; 100% rented. Miami Beach, Florida
First Republic Office Park Two, two-story office buildings with Thruway and Electronics Parkway 35,000 rentable square feet each; Liverpool, New York 14 acres of land; 96% rented.
Waltham Engineer 17 multi-story industrial buildings; Waltham, Massachusetts in excess of 380,000 rentable square feet;parking facilities; 90% rented.
East Newark Industrial Center 30 multi-story industrial buildings; East Newark, New Jersey in excess of 1,000,000 rentable square feet;parking facilities; 80% rented; second mortgage held by Bluepoints in the amount of $401,772 at September 1, 1994.
Nyanza Building Four-story and basement industrial Woonsocket, Rhode Island building; 300,000 rentable square feet; used by Company as spinning plant (100,000 sq. ft.) and balance rented to others; 85% rented.
Greensboro North Shopping Center Approximately 13.5 acres of land and Greensboro, North Carolina 128,000 square feet of space in buildings located thereon; 40% rented.
Greensboro South Shopping Center Approximately 13 acres of land and Greensboro, North Carolina 141,000 square feet of space in buildings located thereon; 95% rented.
Location General Character (1)
Shopping Center Approximately 13.5 acres of land and Richmond, Virginia 130,000 square feet of space in buildings located thereon; 100% rented.
London Bridge Shopping Center Approximately 10.2 acres of land and Virginia Beach, Virginia 100,000 square feet of space in buildings located thereon; 98% rented.
Vacant land Approximately 21 acres; suitable for Melbourne, Florida development as a shopping center.
Sunscape Apartments 167-unit residential garden apartments Orlando, Florida located on approximately 12 acres of land; 90% rented. (Company owns 50% of Sunscape Associates, a partnership which owns the apartments).
Shopping Center Approximately 22.7 acres of land and Brookhaven, Pennsylvania 196,000 square feet of space in buildings located thereon; 90% rented.
Newburyport, Massachusetts 4-story building; 168,000 rentable square feet of space; 10% rented.
3-story building, 13,800 rentable square feet of space; 100% rented.
Two-story building and warehouse; 5,000 square feet, presently vacant.
Hotel Segment
Sheraton Inn-Syracuse 288-room motor hotel and convention Thruway and Electronics Parkway center; indoor pool; operated under Liverpool, New York Sheraton franchise.
Seafood Segment (2)
West Sayville, New York Approximately 13,000 acres of underwater land in the Great South Bay of Long Island; approximately 5 acres of upland and 22,500 square feet of space in two buildings located thereon; used for unloading product, storage, inspection, shipping, shop maintenance, hatchery and administration.
Location General Character (1)
Mattituck, New York Approximately 1 acre of land in Long Island; to be used as a grow out pond for the clam hatchery.
Crisfield, Maryland Approximately .78 acres of land and 33,625 square feet of space in three buildings located thereon; previously used to receive, process, store and ship soft-shell crabs, presently vacant.
Englishman Island Approximately 600 acres of land including Guayaquil County, Ecuador 288 acres owned and the balance held under a 10-year concession, expiring April 1995, containing shrimp ponds and drainage canals.
Vacant Land Bluepoints has a 62.5% interest in a Guayaquil, Ecuador company that owns approximately 100,000 square feet of riverfront land.
Ayangue Bluepoints has a 62.5% interest in a Guayas Province, Ecuador company that owns approximately 56 acres of land used for a shrimp hatchery.
Cape Canaveral, Florida Various leaseholds (approximately 11 acres) used by scallop operation for offloading, processing, packaging, warehouse and office. (Company owns 50% of Lambert International Fisheries Inc. and Cape King Associates which hold leaseholds.)
Textile Segment
Allendale, South Carolina Approximately 195 acres of land, on which a plant containing one building with approximately 156,000 square feet and comprising approximately 20 acres is located, presently vacant.
Pageland, South Carolina Approximately 10 acres of land and 36,125 square foot building located thereon; previously used as bulking and twisting plant, warehouse and office, presently being rented.
Location General Character (1)
Lake City, South Carolina Approximately 21.5 acres of land and 95,000 square feet of space in two buildings located thereon; used for a yarn spinning plant, warehouse and administration.
Sumter, South Carolina Approximately 10.5 acres of land and 61,000 square foot building located thereon; used as yarn dyeing plant, warehouse and office.
Health Care Segment
Rochelle Park, New Jersey 240-bed nursing home; owned by partnership in which the Company has a 49.9% partnership interest.
121-unit senior citizen residence; owned by partnership in which the Company has a 49.9% partnership interest.
Jersey City, New Jersey 180-bed nursing home; owned by partnership in which the Company has a 49.9% partnership interest.
Whiting, New Jersey 180-bed nursing home; leased to tenant by partnership in which the Company has a 49.9% partnership interest.
Corporate Office
302 Fifth Avenue 5,400 square feet of executive New York, New York offices; month-to-month tenant at a rent of $7,709 per month. See Item 13. below.
(1)-Reference is made to Schedule XI for information with respect to mortgages encumbering certain properties listed in the table.
(2)-Except as otherwise noted, the properties listed in the Seafood Segment are owned by Bluepoints Company, Inc., an 80.2% owned subsidiary of the Coof
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
See Item 1(c) for information with respect to environmental matters relating to the property owned by Whitlock Combing Co.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5.
ITEM 5.MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
a. The Company's common stock is traded in the over-the-counter market.
There have not been any quotations for the Company's common stock in the National Daily Quotation Service for the past several years. During the two most recent fiscal years, the Company has purchased shares at prices ranging from a high of $57.50 in July 1992 to a low of $39.00 in June 1994.
Due to the absence of quotations it may be deemed that there is no established public trading market for the Company's common stock.
b. As of September 16, 1994, there were 857 holders of record of the Company's common stock.
c. No dividends have been paid during the two years ended June 30, 1994. The Company has no intention of paying dividends in the foreseeable future.
ITEM 6.
ITEM 6.SELECTED FINANCIAL DATA
Fiscal Year Ended June 30
1994 1993 1992 1991 1990 (In thousands except per share amounts)
Revenues $48,119 $47,036 $49,152 $53,811 $55,850
Income before interest and income taxes $3,391 $743 $3,062 $1,692 $1,818
Interest costs $2,248 $2,239 $2,636 $2,929 $2,797
Income (loss) from continuing operations before extraordinary income and cumulative effect of accounting change $ 88 $(1,369) $ 84 $(436) $(1,062)
Net income (loss) per shareof common stock from continuing operations $ .13 $(2.00) $ .12 $ (.63) $(1.54)
Total assets $80,164 $79,106 $79,705 $84,124 $131,449
Long-term debt $23,870 $22,234 $21,598 $16,049 $16,728
Stockholders' equity $42,264 $40,872 $42,732 $42,705 $37,233
Cash dividends per common share NONE NONE NONE NONE NONE
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Working capital at June 30, 1994 decreased by approximately $1,169,000 as compared to the prior year. The Company has initiated foreclosure proceedings on a building in the Bronx, New York and has reclassified a $934,215 mortgage that is past due as a long-term receivable.
Net cash provided by operating activities was approximately $5,712,000 during the 1994 fiscal year. Net cash provided by financing activities was approximately $966,000. Net cash of approximately $6,866,000 was used for investing activities.
During the three years ended June 30, 1994, the Company incurred capital expenditures of approximately $10,456,000. In addition, approximately $1,587,000 was expended for tenants' improvements during this three year period.
Results of Operations
Real Estate
In fiscal 1994 real estate operating profits decreased $85,000 on a revenue increase of $38,000 as compared to the prior year. The decrease in operating profits was primarily attributable to $100,000 of interest expense on a new mortgage obtained on the Greensboro South Shopping Center. The Company's real estate operating profits decreased $1,377,000 in fiscal 1993 as compared with the prior year, while revenues decreased $307,000 over the same period. The decrease in operating profits was primarily attributable to a $287,000 increase in repairs and maintenance, a $250,000 increase in real estate taxes, a $125,000 increase in salaries and fringe costs, and an increase of $285,000 in utility and snow removal costs caused by the colder than normal winter.
Hotel
Operating profits for the Sheraton Inn--Syracuse for fiscal 1994 decreased approximately $244,000 on an approximately $10,000 decrease in revenues from the prior year. This was due primarily to $160,000 of additional fees paid to the management company that oversees the operations of the hotel and other small increases in operating costs. Profits and revenues for the hotel for the year ended June 30, 1993 were approximately the same as in the prior year.
Seafood
Overall, revenues for the seafood division decreased by 13% as compared to the prior year. Losses from operations in fiscal 1994 were $2,170,000 as compared to a loss of $847,000 last year. The reduction in revenues was attributable to declining shrimp sales from Ecuador, which were partially offset by the
importation of shrimp from Costa Rica. Due to the lower revenues, Ecuadorian operations sustained a loss of $1,848,000. Declining shrimp production resulted from poor water quality in the Company's shrimp ponds. Although the Company is taking steps to improve water quality, these problems have continued into the current fiscal year. Although the Company received a $190,000 distribution from its scallop investment, it incurred a $492,000 loss due substantially to write down of leasehold carrying costs and depreciation expense on remaining assets. Bluepoints' Long Island operations had income of $282,000, significantly lower than last year due to reduced profits from sale of shrimp imported from Ecuador and higher operating costs in the clam operations. There was a loss of $112,000 from the discontinued soft shell crab operation, whose assets were put up for sale last year. The fiscal 1993 revenues for the seafood division increased by 14%. Losses from operations in fiscal 1993 were $847,000 as compared to a loss of $1,124,000 in fiscal 1992. The Company received a $250,000 distribution from its scallop investment, but incurred a $850,000 loss due to losses on disposal of nonperforming scallop operation assets. In fiscal 1993, there was a loss of $513,000 from the foreign seafood operations and a $118,000 loss incurred in the discontinued soft-shell crab operation. Bluepoints' Long Island operations had income of approximately $634,000. In fiscal 1992, revenues for the seafood division increased by 2%. Losses from operations in fiscal 1992 were $1,124,000 as compared to a loss of $1,463,000 in fiscal 1991. Losses of $160,000 from the soft-shell crab operation were substantially due to markdowns taken when disposing of the remaining inventory upon termination of operations. The Company incurred a $512,000 loss on the scallop investment, and a net loss of approximately $782,000 from its foreign seafood operations. Bluepoints' Long Island operations in fiscal 1992 had income of approximately $330,000.
Textile
Although revenues for the textile division were approximately the same as last year, earnings increased $1,885,000. Hanora Spinning's earnings increased $494,000 to $1,138,000 due substantially to higher operating margins. Hanora South and J & M incurred combined losses of $490,000 as compared to last years losses of $758,000. Whitlock incurred a loss of $563,000 which included costs to clean up the property on which its wool combing plant was located, and has put up the property for sale. During the three years ended June 30, 1994, the Company purchased approximately $1,331,000 of machinery and equipment for the textile operations. In fiscal 1993, revenues decreased 11% in the textile division as compared to fiscal 1992 due to the cessation of operations at Whitlock. Hanora revenues increased 25% and the revenues of Hanora South and J & M increased 2%. Losses from operations in fiscal 1993 were $1,800,000 as compared to a loss of $1,838,000 in fiscal 1992. Hanora's earnings were $644,000 and Hanora South and J & M incurred a combined loss of $758,000. Whitlock, which as a result of ongoing losses, sold its equipment and substantially ceased operations in June 1992, incurred a loss of $1,686,000, including an $800,000 writedown on its remaining assets which were offered for sale. The loss for the year ended June 30, 1992 was approximately $1,838,000 as compared to fiscal 1991's loss of approximately $3,198,000. Hanora's earnings increased $509,000 due primarily to higher revenues and increased selling margins.
Hanora South and J & M incurred combined losses of $1,308,000 as a result of the loss of their major customer in fiscal 1990. Whitlock incurred a loss of $1,220,000 as a result of lower than anticipated productivity from a new production line set up during the 1990 fiscal year and a 46% decrease in revenues.
Health Care
In fiscal 1994, the Company recognized income of $713,000 from its investment in health care operations. In fiscal 1993, the Company recognized income of $755,000 from this investment. From the date of acquisition through June 30, 1992, the Company recognized income of $345,000.
Merrimac
Merrimac's operations were merged into the Company in June 1993 and are reflected in the Company's real estate and other operations for fiscal 1994. Merrimac's operations for fiscal 1993 (real estate, giftware and other) had revenues of approximately $1,401,000, resulting in a loss of approximately $294,000. In fiscal 1992, revenues were approximately $1,500,000 resulting in a profit of approximately $284,000. The results of operations in fiscal 1993 reflect interest payments on a mortgage on the Brookhaven Shopping Center of approximately $151,000 and a reduction of royalty receipts. Fiscal 1993 and 1992 results were included in the Company's real estate and other operations.
Corporate/Other
Corporate/other expenses which reflect the results of Merrimac's operations decreased from $3,425,000 to $1,496,000. This was due to $1,322,000 of income resulting from the termination of a royalty agreement with the purchaser of the Merrimac Silversmith assets, and a $446,000 reduction in the Merrimac pension obligation pursuant to curtailment of the plan. Aside from the foregoing, other corporate expenses, which includes interest on the Company's term loan and revolving line of credit, have remained relatively constant for the last three years.
ITEM 8.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Auditors
Board of Directors and Stockholders The First Republic Corporation of America
We have audited the accompanying consolidated balance sheets of the First Republic Corporation of America (the "Company") and subsidiaries as of June 30, 1994 and 1993, and the related consolidated statements of income, retained earnings, and cash flows for each of three years in the period ended June 30, 1994. Our audits also included the financial statement schedules listed in the accompanying index to financial statements (Item 14.a.). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits. We did not audit the financial statements of (a) Marchelot S.A. and its subsidiaries and the hotel division, which statements reflect total assets constituting 14% in 1994 and 11% in 1993, and total revenues constituting 13% in 1994, 12% in 1993 and 15% in 1992, of the related consolidated totals, (b) the Mondragon Companies, accounted for on the equity method, and (c) certain health care entities (Bristol Manor Health Care Center, Inc., The Whitehall Residence, Inc., Logan Manor Corp., Harbor View Health Care Center, Inc.), accounted for on the equity method. Those statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for such entities, is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of The First Republic Corporation of America and subsidiaries at June 30, 1994 and 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended June 30, 1994, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
New York, New York September 30, 1994
BDO Stern Cia. Ltda. Auditores
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors Marchelot S.A. and Subsidiaries New York, U.S.A.
We have audited the consolidated balance sheet of Marchelot S.A. (a wholly- owned subsidiary of Bluepoints of Bermuda) and its subsidiaries Emporsa, Empacadora y Exportadora S.A., Larfico, Larvas del Pacifico S.A. and Comercorp S.A. as of June 30, 1994 and 1993, and the related consolidated statements of operations and deficit for each of the three years in the period ended June 30, 1994, and the consolidated statements of cash flows for the years ended June 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion of these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.
As indicated in Note A to the attached financial statements to June 30, 1994 and 1993 the Government of Ecuador requires that the Sucre financial statements be adjusted for inflation. The principal effects produced for local purposes of the referred monetary correction of 1994 and 1993 were to increase properties by S/.3.672 million, deferred charges by S/.1.320 million, inventories by S/.109 million and anticipated expenses by S/.14 million, reduce investments in shares by S/.1.248 million, and the net difference caused a decrease in equity of S/.4.473 million. Also, the companies eliminated the prior year's losses of S/.906 million with the superavit from revaluation and S/.244 million from the monetary reexpression. All these transactions were reversed in the financial statements for the purpose of presenting them at their cost of purchase, in conformity with accounting principles generally accepted in the United States of America. The financial statements in U.S.A. Dollars will not be modified as a result of this monetary reexpression in Sucres.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Marchelot S.A. and Subsidiaries as of June 30, 1994 and 1993, the consolidated results of their operations for each of the three years in the period ended June 30, 1994, and their cash flows for the years ended June 30, 1994 and 1993, in conformity with generally accepted accounting principles prevailing in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note Q to the financial statements, the Company incurred in recurring operating losses and has a net capital deficiency, which establishes a significant doubt on its capacity to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As indicated in Notes A and E, on May 23, 1991, Marchelot S.A. acquired 38% of the issued and outstanding shares of the unconsolidated subsidiaries Isca C.A. and Langomorro Cia. Ltda., and 12.5% additional of Larfico S.A. and Comercorp S.A., currently 62.5%-owned subsidiaries, for a total of US $1.3 million (S/.1,457 million). These investments originated an excess of cost over net assets of those Subsidiaries of US $1.0 million (S/.1,131 million), accounted for as intangible assets. Such excess was originated based principally on the accumulated deficit of these four companies, due to be recurring operating losses which were approximately US $2.5 million (S/.2,670 million) at the date of acquisition.
As of June 30, 1994, property, machinery and equipment include S/.1,046 million (US $518,981) for wall repairs and other work in the pools and reservoirs which were executed by individual contractors.
Our examinations included also the translation of the amounts from Ecuadorean Sucres to U.S. Dollars for consolidation purpose with Bluepoints of Bermuda's financial statements. In our opinion, this translation was made in conformity with generally accepted accounting principles, applied to the financial statements in foreign currency and incorporated into the dated financial statements.
August 2, 1994 Guayaquil, Ecuador
Dermody, Burke & Brown Certified Public Accountants, P.C.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of FIRST REPUBLIC CORPORATION OF AMERICAN SHERATON INN - SYRACUSE
We have audited the balance sheets of FIRST REPUBLIC CORPORATION OF AMERICA, SHERATON INN - SYRACUSE as of June 30, 1994 and 1993, and the related statements of income, division control and cash flows for the years ended June 30, 1994, 1993 and 1992. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
The Sheraton Inn - Syracuse is owned and operated by First Republic Corporation of America and its affiliated company, First Republic Building Corporation. The accounting records maintained in Syracuse relate only to the transactions incurred in the daily operation of the Hotel. Transactions involving debt financing, tax escrow payments, corporate income taxes and property accounts are not reflected on the Hotel's books but are the accounting responsibility of First Republic and its affiliate. These financial statements are issued for inclusion in the financial statements of First Republic Corporation of America and should not be considered separately in determining the financial position and results of operations of the Sheraton Inn - Syracuse.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the operations of FIRST REPUBLIC CORPORATION OF AMERICA, SHERATON INN - SYRACUSE at June 30, 1994 and 1993, and the results of its operations and its cash flows for the three year period ended June 30, 1994, in conformity with generally accepted accounting principles.
DERMODY, BURKE AND BROWN Certified Public Accountants, P.C. Syracuse, New York August 24, 1994
LOEB & TROPER 655 THIRD AVENUE, 12TH FLOOR, NEW YORK, NY 10017
TEL: (212) 867-4000 FAX: (212) 867-9810
Independent Auditor's Report
Board of Directors Logan Manor Corp.
We have audited the accompanying balance sheet of Logan Manor Corp. as of June 30, 1994 and 1993, and the related statements of operations and cash flows for the six months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Logan Manor Corp. as of June 30, 1994 and 1993, and the results of its operations and its cash flows for the six months then ended in conformity with generally accepted accounting principles.
Logan Manor Corp. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
August 8, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors Logan Manor Corp.
We have audited the accompanying balance sheet of Logan Manor Corp. as of December 31, 1993 and 1992, and the related statements of operations and cash flows for the years then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Logan Manor Corp. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Logan Manor Corp. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
February 28,1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors Bristol Manor Health Care Center, Inc.
We have audited the accompanying balance sheet of Bristol Manor Health Care Center, Inc. as of June 30, 1994 and 1993, and the related statements of operations and cash flows for the six months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bristol Manor Health Care Center, Inc. as of June 30, 1994 and 1993, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Bristol Manor Health Care Center, Inc. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of thesetransactions are not the same as those which would result from transactions among wholly unrelated parties.
August 8, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors Bristol Manor Health Care Center, Inc.
We have audited the accompanying balance sheet of Bristol Manor Health Care Center, Inc. as of December 31, 1993 and 1992, and the related statements of operations and cash flows for the years then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bristol Manor Health Care Center, Inc. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Bristol Manor Health Care Center, Inc. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
February 28, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors The Whitehall Residence, Inc.
We have audited the accompanying balance sheet of The Whitehall Residence, Inc. as of June 30, 1994 and 1993, and the related statements of operations and cash flows for the six months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Whitehall Residence, Inc. as of June 30, 1994 and 1993, and the results of its operations and its cash flows for the six months then ended in conformity with generally accepted accounting principles.
The Whitehall Residence, Inc. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
The accompanying financial statements have been prepared assuming that The Whitehall Residence, Inc. will continue as a going concern. As discussed in Note H to the financial statements, the Corporation has suffered recurring losses from operations and has a retained earnings deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note H. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
August 8, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors The Whitehall Residence, Inc.
We have audited the accompanying balance sheet of The Whitehall Residence, Inc. as of December 31, 1993 and 1992, and the related statements of operations and cash flows for the years then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Whitehall Residence, Inc. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
The Whitehall Residence, Inc. is a member of a group of affiliated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
The accompanying financial statements have been prepared assuming that The Whitehall Residence, Inc. will continue as a going concern. As discussed in Note G to the financial statements, the Corporation has suffered recurring losses from operations and has a retained earnings deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note G. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
February 28, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors Harbor View Health Care Center, Inc.
We have audited the accompanying balance sheet of Harbor View Health Care Center, Inc. as of June 30, 1994 and 1993, and the related statements of operations and cash flows for the six months then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harbor View Health Care Center, Inc. as of June 30, 1994 and 1993, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Harbor View Health Care Center, Inc. is a member of a group of af- filiated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
August 8, 1994
LOEB & TROPER
Independent Auditor's Report
Board of Directors Harbor View Health Care Center, Inc.
We have audited the accompanying balance sheet of Harbor View Health Care Center, Inc. as of December 31, 1993 and 1992, and the related statements of operations and cash flows for the years then ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Harbor View Health Care Center, Inc. as of December 31, 1993 and 1992, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles.
Harbor View Health Care Center, Inc. is a member of a group of af- filiated entities and, as disclosed in the financial statements, has significant transactions with members of the group, including significant borrowings. Because of these relationships, it is possible that the terms of these transactions are not the same as those which would result from transactions among wholly unrelated parties.
February 28, 1994
The First Republic Corporation of America and Subsidiaries
Consolidated Balance Sheets
June 30 1994 1993
Assets Current assets: Cash and cash equivalents $1,316,144 $1,504,799
Accounts and rents receivable, net of allowances of $153,180 and $158,213, respectively 5,493,910 6,220,640
Mortgages receivable--current portion (Note 3) 737,971 1,012,313
Other receivables 426,530 666,348 Inventories (Note 1) 4,731,545 3,781,243
Prepaid expenses and other assets 1,269,255 2,486,473
Total current assets 13,975,355 15,671,816
Property, plant and equipment (Note 5):
Land 9,889,089 9,598,158 Buildings and improvements 38,389,151 37,346,639 Leaseholds and improvements 5,782,598 6,404,218 Machinery, equipment, parts and vehicles 12,532,328 12,193,128
Furniture and furnishings 933,871 1,049,812 Construction-in-progress 1,904,149 969,522 69,431,186 67,561,477
Less accumulated depreciation and amortization 29,276,551 27,679,765 40,154,635 39,881,712
Mortgages receivable--net of current portion (Note 3) 2,902,044 3,244,478
Deferred charges 6,107,863 5,092,889
Other assets: Cash and securities in trust for tenants' security deposits 1,529,315 1,484,881
Mortgage escrow funds and security deposits 218,376 82,239
Investments in and advances to affiliated entities (Notes 1 and 4) 11,598,245 10,252,102
Assets held for sale (Note 4) 1,983,300 2,144,229 Due from related parties (Note 12) 745,000 283,000 Other (Note 4) 949,495 968,232 17,023,731 15,214,683 Total assets $80,163,628 $79,105,578
See notes to consolidated financial statements.
The First Republic Corporation of America and Subsidiaries
Consolidated Balance Sheets (continued)
June 30
1994 1993
Liabilities and stockholders' equity
Current liabilities: Notes payable banks (Note 5) $2,568,016 $2,830,964 Notes payable, related party 640,000 640,000 Current portion of long-term debt (Note 5) 1,312,114 1,352,770 Accounts payable 2,111,893 1,698,925 Accrued expenses and taxes payable 1,356,246 2,004,036 Due to related parties (Notes 5 and 12) 1,328,000 755,000 Subordinated debentures payable (Note 6) - 469,336 Other liabilities 96,005 188,698 Total current liabilities 9,412,274 9,939,729 Long-term debt (Note 5) 23,870,298 22,233,897 Deferred income tax (Note 8) 673,926 1,696,926
Other liabilities: Tenants security deposits payable 1,529,315 1,484,881 Accrued pension (and sundry in 1993) (Note 9) 1,235,000 1,791,710 2,764,315 3,276,591
Minority interests 775,372 664,218
Deferred income (Note 3 ) 403,727 421,983 Total liabilities 37,899,912 38,233,344
Stockholders' equity:
Common stock, $1 par value:Authorized, 2,400,000 shares Issued, 1,175,261 shares 1,175,261 1,175,261
Additional paid-in capital 15,000,753 15,000,753 Retained earnings 30,429,660 28,868,990 46,605,674 45,045,004
Less treasury stock, at cost-501, 154 and 497,498 shares (Note 7) 4,341,958 4,172,770
Total stockholders' equity 42,263,716 40,872,234 Leases, commitments and contingencies(Notes 5, 9, 10 and 11)
Total liabilities and stockholders' equity $80,163,628 $79,105,578
See notes to consolidated financial statements.
The First Republic Corporation of America and Subsidiaries
Consolidated Statements of Income
Year ended June 30 1994 1993 1992
Revenues: Sales' textiles and seafood $23,717,207 $24,764,199 $26,009,745 Rents and other revenues' real estate and hotel operations 20,544,116 20,516,437 20,769,349 Other (including interest income of approximately $94,000, $95,000 and $323,000, respectively) (Notes 9 and 13) 3,857,729 1,755,494 2,372,600
Equity in loss of affiliated entities (Note 4) (1,416,679) (228,481) (577,397) 46,702,373 46,807,649 48,574,297
Costs and expenses:
Cost of sales 20,704,424 22,272,121 24,384,905
Operating costs-real estate and hotel operations 12,323,408 12,074,090 11,098,273 Depreciation and amortization 3,833,184 4,113,181 4,536,731
Interest 2,248,497 2,238,893 2,636,284 Selling, general and administrative 7,072,603 6,953,024 5,826,749 Writedown of property and equipment (Note 4) -- 800,000 --
Minority interests (622,413) (147,711) (334,165) 45,559,703 48,303,598 48,148,777
Income (loss) before income taxes, extraordinary item and cumulative effect of change in accounting for income taxes 1,142,670 (1,495,949) 425,520
Income tax (expense) benefit (Note 8) (1,055,000) 127,000 (342,000) Income (loss) before extraordinary item and cumulative effect of accounting change 87,670 (1,368,949) 83,520
Extraordinary income-share of gain on extinguishment of debt by affiliated entities, net of income taxes of $120,000 (Note 4)
300,000 - -
Cumulative effect as of July 1, 1993 of change in method of accounting for income taxes (Note 1) 1,173,000 - - Net income (loss) $1,560,670 $(1,368,949) $83,520
Per share of common stock (Note 1):
Operations before extraordinary item and cumulative effect of accounting change $.13 $(2.00) $0.12
Extraordinary income .44 -- -- Cumulative effect of accounting change 1.74 -- -- Net income (loss) $2.31 $(2.00) $0.12
See notes to consolidated financial statements.
The First Republic Corporation of America and Subsidiaries
Consolidated Statements of Retained Earnings
Year ended June 30
1994 1993 1992
Balance, beginning of year $28,868,990 $30,237,939 $30,154,419
Net income (loss) for the year 1,560,670 (1,368,949) 83,520
Balance, end of year $30,429,660 $28,868,990 $30,237,939
See notes to consolidated financial statements.
The First Republic Corporation of America and Subsidiaries
Consolidated Statements of Cash Flows
Year ended June 30 1994 1993 1992
Operating activities Net income (loss) $1,560,670 $(1,368,949) $ 83,520 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,833,184 4,113,181 4,536,731 Writedown of property and equipment - 800,000 - Provision (credit) for deferred income taxes 150,000 - (100,000) Cumulative effect of changes in method of accounting for income taxes (1,173,000) - - Equity in net loss of affiliated entities 996,679 228,481 577,397 Minority interests' share of loss in subsidiaries (622,413) (147,711) (334,165) Changes in operating assets and liabilities from operations: Net accounts, rents and other receivables 966,548 (59,091) (749,630) Inventories (950,302) (175,477) 1,696,683 Prepaid and other assets 1,217,218 (983,506) 249,327 Due from related parties - (709,602) (20,495) Accounts payable 412,968 (120,807) (381,842) Accrued and other current liabilities (740,483) (815,256) 735,555 Due to related parties 573,000 (202,689) 457,255 Other liabilities (512,276) (516,365) 236,436 Cash provided by operating activities 5,711,793 42,209 6,986,772 Investing activities Purchases of property plant and equipment (4,106,107) (4,289,928) (2,059,938) Distribution in excess of equity in earnings from (investment in) affiliated entities -net (Note 4) (2,342,822) 644,000 (5,696,948) Repayment of notes receivable - - 3,000,000 Proceeds from sale of machinery and equipment - 1,150,000 2,500,000 Payments received on mortgages receivable 616,776 584,182 428,582 Other investing activities (1,034,135) (406,305) (251,379) Net cash used by investing activities (6,866,288) (2,318,051) (2,079,683)
The First Republic Corporation of America and Subsidiaries
Consolidated Statements of Cash Flows (continued)
Year ended June 30 1994 1993 1992
Financing activities Proceeds from mortgage and notes payableto banks $11,705,000 $19,600,000 $13,600,000 Payments on mortgages and notes payableto banks (10,372,203) (17,162,506) (18,322,100) Repayment of subordinated debenture (469,336) - - Minority interests' additional paid-in capital 271,567 342,513 - Purchases of treasury stock (169,188) (490,828) (56,380) Payments on notes payable to others - - (190,419) Net cash provided by (used in) financing activities 965,840 2,289,179 (4,968,899)
Net (decrease) increase in cash and cash equivalents (188,655) 13,337 (61,810) Cash and cash equivalents at the beginning of year 1,504,799 1,491,462 1,553,272 Cash and cash equivalents at the end of year $1,316,144 $1,504,799 $1,491,462
See notes to consolidated financial statements.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of The First Republic Corporation of America and all majority owned or controlled subsidiaries (the "Company"). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company records its investment in partnerships and corporations in which it owns interests ranging from 38% to 50% in accordance with the equity method. Any excess of the purchase price of such investment over the Company's proportionate share of net assets is being amortized over forty years.
Inventories
Inventories are valued at the lower of cost or market with cost being determined by specific identification.
Inventories are summarized as follows:
June 30 1994 1993 Work-in-process and raw materials $1,978,575 $1,845,245 Finished goods 2,752,970 1,935,998 $4,731,545 $3,781,243
Property, Plant and Equipment
Property, plant and equipment is carried at cost, and assets that become permanently impaired are written down to their estimated realizable value. Depreciation is provided by annual charges to income at rates which are intended to amortize the cost of depreciable assets over their estimated useful lives as follows:
Estimated Classification Useful Life Buildings 15 to 40 years Building improvements and equipment 2 to 40 years Leaseholds and improvements 3 to 31.5 years Machinery, equipment, parts and vehicles 5 to 10 years Furniture and furnishings 5 years
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
The straight-line method of depreciation is used for financial statement purposes; the declining-balance, the modified accelerated and accelerated cost recovery system methods as appropriate, are being used for Federal income tax purposes.
Tenants' improvements and leasing commissions are amortized principally over the terms of the respective leases.
Revenues
Sales of textiles and seafood are recognized when shipments are made to customers. Rental revenue is recognized on an accrual basis in accordance with the terms of the lease except that leases with scheduled rent increases are recognized on a straight-line basis over the life of the lease. Hotel revenues are recognized when the related services are rendered.
Per Share Data
Per share amounts are based on the weighted average number of shares of common stock outstanding in 1994, 1993 and 1992 (675,635, 683,625 and 687,855, respectively).
Change in Method of Accounting for Income Taxes
Effective July 1, 1993, the Company adopted FASB Statement No. 109, "Accounting for Income Taxes." Under Statement 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Prior to the adoption of Statement 109, income tax expense was determined using the deferred method. Deferred tax expense was based on items of income and expense that were reported in different years in the financial statements and tax returns and were measured at the tax rate in effect in the year the difference originated.
As permitted by Statement 109, the Company has elected not to restate the financial statements of any prior years. The change had no effect on pretax income from operations for the year ended June 30, 1994. The cumulative effect of the change increased net income by $1,173,000 or $1.74 per share.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Foreign Operations
The Company has a subsidiary which, together with certain entities in which the subsidiary owns a minority interest, operates in Ecuador which has a hyperinflationary currency. Exchange gain or loss resulting from translation of the foreign entities' financial statements were not material. Financial statements of foreign entities with a hyperinflationary currency are translated using the U.S. dollar as the functional currency. The excess of cost over net assets of foreign entities acquired is being amortized on a straight-line basis over forty years.
Cash Flows
The Company considers all highly liquid investments with maturities of three months or less when purchased to be cash equivalents. The Company paid income taxes of approximately $470,000, $1,350,000 and $520,000 and interest of approximately $2,200,000, $2,200,000 and $2,750,000 for the years ended June 30, 1994, 1993 and 1992, respectively.
Financial Instruments and Concentrations of Credit
Financial instruments which potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, mortgages receivable and accounts and rents receivable.
The Company maintains operating cash accounts at financial institutions in many states along the Eastern seaboard and, for its foreign subsidiaries, in Equador. Such accounts are subject to risk to the extent that the balances exceed the institutions' insurable limits and to the extent that the institutions maintain their solvency.
Mortgages receivable are subject to credit risk in that such receivables are within the real estate industry and the mortgages are in either New York or Florida. The Company's management has attempted to mitigate the risk of such mortgages by evaluating the credit worthiness of the prospective borrowers prior to acceptance and requiring collateral to collateralize the value of the mortgage.
The First epublic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
Concentrations of credit risk with regard to accounts and rents receivable are limited due to the large number of entities comprising the Company's customer base and such base being dispersed over the industries in which the Company, either directly or indirectly through its subsidiaries, operates.
Based on an analysis of the financial instruments which potentially subject the Company to significant concentrations of credit risk, the Company's management believes that there are no significant concentrations of credit risk at June 30, 1994.
2. Industry Segments
The following table sets forth information about the Company's industry segments for each of the three years ended June 30, 1994:
Year ended June 30 1994 1993 1992
Revenues: Real estate $15,145,026 $15,106,721 $15,413,765 Hotel 5,399,090 5,409,716 5,355,584 Seafood 6,124,693 7,074,736 6,225,927 Textile 17,592,514 17,689,463 19,783,818 Other 3,857,729 1,755,494 2,372,600 $48,119,052 $47,036,130 $49,151,694
Operating profit (loss) before income taxes: Real estate $ 3,856,999 $ 3,941,723 $ 5,319,106 Hotel 243,369 487,045 475,055 Seafood (2,169,671) (847,396) (1,123,937) Textile 85,467 (1,800,047) (1,838,393) Corporate expenses, interest and other (1,495,907) (3,424,985) (2,740,476) Minority interests 622,413 147,711 334,165 $1,142,670 $(1,495,949) $ 425,520
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Industry Segments (continued)
Year ended June 30 1994 1993 1992 Identifiable assets: Real estate $34,914,215 $34,133,213 $33,525,319 Hotel 3,301,524 3,754,476 4,373,004 Seafood 15,848,156 12,469,796 12,480,103 Textile 18,766,487 20,017,057 20,629,388 Corporate assets 7,333,246 8,731,036 8,697,362 $80,163,628 $79,105,578 $79,705,176
Depreciation and amortization: Real estate $1,557,794 $1,598,018 $1,454,134 Hotel 617,744 733,456 769,835 Seafood 263,399 268,348 395,477 Textile 1,184,057 1,273,683 1,506,245 Corporate and other 210,190 239,676 411,040 $3,833,184 $4,113,181 $4,536,731
Capital expenditures--net: Real estate $2,216,955 $2,092,488 $1,338,650 Hotel 262,763 118,901 193,593 Seafood 1,323,087 473,651 248,985 Textile 240,715 886,166 204,342 Corporate and other 62,587 718,722 74,368 $4,106,107 $4,289,928 $2,059,938
The Company's operations in the industry segments detailed above reflect continuing operations only and consist of rentals and sales of the following products:
Real Estate--ownership of loft, office and industrial buildings, shopping centers, residential property and vacant land.
Hotel--operation of a motor hotel in Liverpool, New York.
Seafood--harvesting and sale of hard-shell clams on property owned by the Company, sales of shrimp imported from Ecuador, grown in Company owned ponds and sales of shrimp imported from Costa Rica.
The First Repubnlic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Industry Segments (continued)
Textile--operations of two yarn spinning plants, a dye house and through June 1992 when operations were substantially terminated a wool combing plant.
Corporate and Other--includes Merrimac's operations other than real estate, income from Health Care investments and other revenues.
For the years ended June 30, 1994, 1993 and 1992, respectively, Emporsa, Comercorp and Larfico (Ecuadorian subsidiaries' see Note 4) had combined sales of approximately $671,000, $1,198,000, and $1,374,000 and combined net losses of $1,687,000, $472,000 and $657,000. As of June 30, 1994 and 1993, respectively, these entities had total assets of approximately $6,125,000 and $4,961,000 and liabilities of $6,521,000 and $5,350,000.
3. Mortgages Receivable
A summary of mortgages receivable is as follows:
Interest June 30 Description Rate Maturity Date 1994 1993
First lien on motel 8.0 December 1, 1996(1) $688,903 $720,245 First lien on condominiums 7.4-10.5 (2) 2,016,897 2,588,657 First lien on building 11.5 December 1, 1992(3) 934,215 947,889 3,640,015 4,256,791
Less payment due within one year included in current assets 737,971 1,012,313 $2,902,044 $3,244,478
(1)-A gain of $786,230, which was realized on the sale of a motel during the fiscal year ended June 30, 1977, has been treated in accordance with the installment method which requires the recognition of gain as cash is collected. The balance of the gain of $403,727 and $421,983 is classified in the accompanying financial statements as deferred income at June 30, 1994 and 1993, respectively.
(2)-Payment terms of mortgages require monthly payments for seven years with the remaining principal balance due at that time. The maturity dates range from December 1, 1994 to December 1, 1998.
3. Mortgages Receivable (continued)
(3)-The note was not paid at maturity and was extended on a month-to-month basis. In August 1994, the Company initiated foreclosure proceedings. The Company believes the value of the collateral exceeds the balance due on the mortgage and does not anticipate any loss on the mortgage. The note has been reclassified as a long-term receivable on the June 30, 1994 balance sheet.
Maturities are as follows:
Amount Year ending June 30: 1993 (past due) $934,215 1995 737,971 1996 1,296,013 1997 619,226 1998 605 1999 51,985 $3,640,015
4. Investments in and Advances to Affiliated Entities
The following table summarizes the Company's investments in and advances to affiliates, which are accounted for by the equity method:
Investments and Advances Equity in Income (Loss) Ownership June 30 Year ended June 30 Percentage 1994 1993 1994 1993 1992 (In Thousands)
Sunscap Associates 50% $ 466 $ 554 $ (88) $ (103) $ (121) Lambert Seafood Company 50% 1,899 2,495 (492) (850) (512) Mondragon Companies 38% 3,377 1,759 (1,130) (30) (278) Health Care Entities 49.9% 5,843 5,430 293(1) 755 345 Other Various 13 14 - - (11) $11,598 $10,252 $(1,417) $(228) $(577)
(1)--Excludes the Company's $420,000 proportionate share of extraordinary gain on extinguishment of debt in June 1994 and is net of amortization of the Company's cost of investment which exceeded its underlying share of Partnerships' deficiency at date of acquisition.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Investments in and Advances to Affiliated Entities (continued)
Real Estate
Sunscape Associates ("Sunscape") owns a 167 unit garden apartment complex located in Orlando, Florida. The other 50% interest in Sunscape is owned by corporate entities which in turn are owned by officers and directors of the Company.
Seafood
Lambert Seafood Company ("Lambert"):
The Company owns a 50% interest in Lambert which is located in Florida, and is engaged in the business of collecting, processing, and selling scallops.
Condensed financial information of Lambert is as follows:
June 30
1994 1993 Assets Cash $144,000 $259,000 Other current assets 384,000 564,000 Property and equipment, net of accumulated depreciation 2,678,000 3,539,000 Other assets 838,000 817,000 Total assets $4,044,000 $5,179,000
Liabilities
Notes payable and other current liabilities $350,000 $165,000 Loans payable-venturers 3,525,000 3,834,000 Total liabilities 3,875,000 3,999,000
Stockholders' equity 169,000 1,180,000 Total liabilities and equity $4,044,000 $5,179,000
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Investments in and Advances to Affiliated Entities (continued)
Year ended June 30 1994 1993 1992 Revenues $3,702,000 $6,858,000 $338,000 Costs and expenses (4,232,000) (5,984,000) (1,441,000) Loss on disposal of assets (481,000) (2,558,000) - Net (loss) $(1,011,000) $(1,684,000) $(1,103,000)
Bluepoints Company Inc. ("Bluepoints"):
Bluepoints, an 80.2% owned subsidiary of the Company, owns Marchelot S.A. which in turn owns a 38% interest in two Ecuadorian corporations, Isca C.A. and Langomorro CIA. Ltda. (collectively, the "Mondragon Companies"), engaged in shrimp farming operations in Ecuador, The remaining 19.8% of Bluepoints is owned by certain stockholders of the Company. For the year ended June 30, 1994, 1993 and 1992 Bluepoints purchased approximately $600,000, $2,105,000 and $2,019,000, respectively, of shrimp from the Mondragon Companies.
Health Care
The Company owns 49.9% partnership interests in three nursing homes located in Rochelle Park, Jersey City and Whiting, New Jersey. The Rochelle Park Facility also includes a senior citizen residence and day care center.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Investments in and Advances to Affiliated Entities (continued)
Condensed combined financial information of the 49.9% partnerships is as follows:
June 30 1994 1993 Cash $1,103,000 $1,260,000 Accounts receivable, net 1,878,000 1,779,000 Other current assets 392,000 570,000 Other assets 905,000 - Property and equipment, net of accumulated depreciation 25,723,000 26,283,000 Total assets $30,001,000 $29,892,000
Accounts payable $1,271,000 $1,789,000 Other current liabilities 1,226,000 1,646,000 Mortgages payable, current 1,230,000 - Mortgages payable, noncurrent 28,592,000 30,647,000 Total liabilities 32,319,000 34,082,000 Partners' capital deficiency (2,318,000) (4,190,000) Total liabilities and capital deficiency $30,001,000 $29,892,000
Eleven months ended Year ended June 30 June 30, 1994 1993 1992 Revenues $21,273,000 $20,561,000 $21,666,000 Expenses 20,287,000 18,851,000 20,976,000 Income before extraordinary income 986,000 - - Extraordinary income 840,000 - - Net income $1,826,000 $1,710,000 $ 690,000
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Long-Term Debt and Credit Facilities
Long-term debt consists of the following:
June 30 1994 1993 Mortgages payable due 1994-2009 bearing interest at fixed rates of 8.5% to 11% and variable rates (8.25% at June 30, 1994) based on prime (1) (3)(4) $23,189,684 $21,197,916
Onondaga County Industrial Development Agency Bonds (1)(2) 1,800,000 2,100,000 5.5%-9.85% notes to development authorities due 1994-2000(1) 192,728 288,751 Related party 50,000 50,000 25,232,412 23,636,667
Less payments due within one year: Third parties 1,312,114 1,352,770 Related party 50,000 50,000 $23,870,298 $22,233,897
(1)--The net book value of real estate assets pledged as collateral is approximately $14,600,000 and $13,300,000 at June 30, 1994 and 1993, respectively.
(2)--The Company entered into an agreement with the Onondaga County Industrial Development Agency (the "Agency") to finance the construction of two office buildings in Liverpool, New York. Under the terms of the agreement, the Agency issued $4,000,000 of industrial development revenue bonds. The financing was structured in the form of a lease whereby the Company committed to pay $74,050 per quarter plus interest (payable monthly) through December 1999. Interest is at a variable rate with a maximum of 9.5% per annum. At the completion of the lease term, the property will be transferred to the Company for a nominal sum. This transaction has been recorded as a purchase of the property.
The Company has provided a letter of credit in the amount of $1,800,000 at June 30, 1994 as collateral for the foregoing financing.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Long-Term Debt and Credit Facilities (continued)
(3)--In fiscal 1994, the Company obtained a $3,000,000 mortgage loan collateralized by the Greensboro South Shopping Center in Greensboro, North Carolina. The self-liquidating loan bears interest at a fixed rate of 8.5% per annum and provides for monthly payments of $29,543 including interest and principal commencing April 1, 1994 and expiring March 1, 2009.
(4)--On July 15, 1992, the Company replaced its existing indebtedness with its principal lender with a $10,000,000 term loan and a $3,000,000 revolving line of credit (the "Loan Agreement"), collateralized by a mortgage on the East Newark Industrial Center. At June 30, 1994, $2,100,000 is outstanding under the line of credit and is included in "Notes payable banks." The term loan, which has an outstanding balance of $8,777,790 at June 30, 1994 and $9,444,450 at June 30, 1993, requires monthly principal payments of $55,555 and matures on August 1, 1997 when the remaining unpaid principal balance of $6,666,640 will become due. The revolving line, which is renewable annually, is due in January 1995. The interest rate on both facilities is one percent in excess of the lender's prime rate.
The Loan Agreement, as amended, requires the Company to maintain stockholders' equity of at least $40,000,000 ($42,000,000 effective July 1, 1994), working capital of at least $2,500,000 and a certain debt to equity ratio. In addition, it places restrictions on the Company's ability to incur additional indebtedness and on its capital expenditures.
Aggregate principal payments are as follows:
Amount
Year ending June 30: 1995 $1,362,114 1996 1,307,716 1997 7,322,285 1998 8,851,594 1999 554,112 Thereafter 5,834,590 $25,232,411
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. Subordinated Debentures
The subordinated debentures, which bore interest at an annual rate of 8.5%, were paid April 15, 1994. The balance at June 30, 1993 of $469,336 is net of unamortized discount of $9,864.
7. Treasury Stock
During the years ended June 30, 1994, 1993 and 1992, there were 3,656, 9,644 and 967 shares of stock purchased for treasury at a cost of $169,188, $490,828 and $56,380, respectively.
8. Income Taxes
At June 30, 1994, the Company has net operating loss carryforwards of approximately $71,300,000 for income tax purposes that expire in years 2000 through 2002. Those carryforwards, which resulted from the merger of Merrimac Corporation into the Company on June 30, 1993, are available to reduce future taxable income, if any, of the Company but not the taxable income of any other member of the Company's group. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities and assets as of June 30, 1994 are as follows:
Deferred tax liabilities: Book basis of fixed assets over tax basis $ 981,000 Book basis of carrying value of investee over tax basis 531,000 Gain not recognized on installment sale for taxpurposes 261,000 1,773,000 Deferred tax assets: Net operating loss carryforwards 24,242,000 Miscellaneous 60,000 24,302,000 Valuation allowance 23,202,000 1,100,000 Net deferred tax liability $ 673,000
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Income Taxes (continued)
Significant components of the provision (credit) for income taxes for the years ended June 30, 1994, 1993 and 1992 are as follows:
Liability Method Deferred Method 1994 1993 1992 Current: Federal $330,000 $(440,000) $100,000 State 575,000 313,000 342,000 Total current 905,000 (127,000) 442,000
Deferred: Federal 133,000 - (100,000) State 17,000 - - Total deferred 150,000 - (100,000) $1,055,000 $(127,000) $342,000
The components of the provision (credit) for deferred income taxes for the years ended June 30, 1994, 1993 and 1992 are as follows:
1994 1993 1992
Depreciation $(21,000) $(223,000) $(27,000) Accrual for future services 136,000 (136,000) - Provision for loss on investments - - (148,000) Partnership income - 315,000 - Other 35,000 44,000 75,000 Provision for deferred income taxes $150,000 $ - $(100,000)
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Income Taxes (continued)
The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax (credit) expense for the years ended June 30, 1994, 1993 and 1992 follows:
Liability Method Deferred Method 1994 1993 1992 Amount Percent Amount Percent Amount Percent
Tax at U.S. statutory rates $ 389,000 34.0% $(509,000) (34.0)% $145,000 34.0%
Increases (reductions) resulting from: Alternative minimum tax 130,000 11.4 - - - - State taxes, net of federal income taxes 391,000 34.2 207,000 13.8 226,000 53.1 Adjustment of prior years under (overaccrual) of income tax 200,000 17.5 (300,000) (20.1) (200,000) (47.0) Minority interest (211,000)(18.5) (50,000) (3.3) (114,000) (26.8) Loss from foreign operations not subject to U.S. federal income taxes 628,000 54.9 174,000 11.6 266,000 62.5 Equity in net loss of investees for which no tax benefit is recognized 167,000 14.6 289,000 19.3 - - Net operating loss carryforwards (712,000)(62.2) - - - - Other items 73,000 6.4 62,000 4.2 19,000 4.6 $1,055,000 92.3% $(127,000) (8.5)% $342,000 80.4%
9. Benefit Plans
The Company and certain subsidiaries have profit-sharing plans covering substantially all nonunion employees. Contributions to one of the plans is discretionary. Total plan costs were approximately $205,000 for each of the years ended June 30, 1994, 1993 and 1992.
The Company's subsidiary Merrimac Corporation ("Merrimac"), had noncontributory pension plans covering certain employees. All covered employees participated in the basic pension plan with benefits based upon years of service. In addition, Merrimac maintained a supplementary plan for salaried employees covered by the basic pension plan. This supplementary plan provided benefits based upon salary and years of credited service, with deductions for employees' primary social security benefits and benefits
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Benefit Plans (continued)
received under the basic plan. The funding policy is to contribute at least the minimum amounts required by the Employee Retirement Income Security Act of 1974 or additional amounts to assure that plan assets will be adequate to provide retirement benefits.
The following table sets forth the funded status of the Merrimac pension plans at June 30, 1994 and 1993:
June 30 1994 1993 Accumulated Accumulated Benefits Benefits Exceed Assets Exceed Assets
Actuarial present value of benefit obligations Vested $5,351,000 $5,547,000 Projected benefit obligation 5,351,000 5,547,000
Plan assets (primarily short-term money funds) at fair market value 4,491,000 4,859,000
Plan assets less than projected benefit obligation 860,000 688,000
Unrecognized net gain 375,000 627,000 Net pension liability recognized in the Consolidated Balance Sheet $1,235,000 $1,315,000
Since a significant part of Merrimac's operations has been discontinued, substantially all employees included in the Plan have been terminated and no additional service benefits will accrue to such employees. Pursuant to such benefit curtailment, projected benefit obligation was reduced by $446,000 and included in other revenue for the year ended June 30, 1994.
Net periodic pension cost included the following components:
June 30 1994 1993 1992
Interest cost on projected benefit obligation $372,000 $398,000 $411,000
Actual return on assets (24,000) (369,000) (693,000) Net amortization and deferral (342,000) (62,000) 312,000 Total pension expense (benefit) $ 6,000 $(33,000) $30,000
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Benefit Plans (continued)
The more significant actuarial assumptions used at both June 30, 1994 and 1993 and for the years then ended were:
Measurement of projected benefit obligation: Discount rate 7% Long-term rate of compensation increase N/A Long-term rate of return on plan assets 7%
10. Leases
Leases in the financial statements of lessee:
The Company is the lessee under an operating lease involving land which expires in 2065. Rent expense includes real estate taxes, and in certain instances utilities and maintenance costs, and rentals under a month-to-month lease.
Future minimum rental payments on noncancellable operating leases consisted of the following at June 30, 1994:
Amount Year ending June 30: 1995 $ 8,952 1996 8,952 1997 8,952 1998 8,952 1999 8,952 Thereafter 581,826 $626,586
Total rent expense for all operating leases amounted to approximately $120,000, $122,000 and $118,000, for the years ended June 30, 1994, 1993 and 1992, respectively.
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Leases (continued)
Leases in the financial statements of the lessor:
The Company owns various office buildings, industrial buildings and shopping centers from which it earns rental income under leases with various tenants. Real estate assets held for rental amount to $34,690,247 with accumulated depreciation of $12,710,993 are included in property, plant and equipment in the accompanying consolidated balance sheet at June 30, 1994. Generally leases provide for tenants to pay additional amounts based on real estate taxes and operating expenses incurred to maintain and operate these properties in excess of base year amounts. Lease terms for these properties range from 1 to 20 years.
Future minimum rentals (excluding operating expenses and other items billable to tenants which aggregated approximately $2,700,000, $3,000,000 and $2,500,000 in 1994, 1993 and 1992, respectively) to be received under the above-mentioned leases all of which are classified and accounted for as operating leases, are as follows:
Amount Year ending June 30: 1995 $12,100,000 1996 10,200,000 1997 7,500,000 1998 5,600,000 1999 4,400,000 Thereafter 19,100,000 $58,900,000
11. Commitments and Contingencies
a. In 1985, Whitlock entered into a Consent Order with the South Carolina Department of Health and Environmental Control in which it agreed to clean up the property on which its plant is located and implement a groundwater monitoring program. In December 1990, soil borings and groundwater samples collected from the site revealed the presence of certain substances reflecting the need to continue remediation. During the fiscal years ended June 30, 1994, 1993 and 1992, Whitlock incurred approximately $519,000, $35,000 and $34,000 of costs, respectively, to
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. Commitments and Contingencies (continued)
comply with the consent order; $400,000 of costs incurred during June 30, 1994 in connection with the remediation program had been charged to 1993 operations and was included as a liability on the Company's balance sheet at June 30, 1993. Substantially all clean-up costs have been incurred.
b. The Company, together with the other partners of the Health Care Partnerships, have issued joint and several guarantees on approximately $4,700,000 of Health Care Partnerships' loans which are payable in monthly installments through June 1999.
c. The Company is involved in other litigation which arose in the ordinary course of business. Based on management's assessment of all existing litigation, management believes that the ultimate impact on the Company, if any, will not be material.
12. Related Party Transactions
Certain stockholders, directors, officers or their relatives ("related parties") own interests in certain investments of the Company as follows:
Percent Ownership by Investment The Company Related Party
Bluepoints Company Inc. 80.2% 19.8% (2) Sunscape Associates 50.0% 50.0% The Mondragon Companies 38.0% 50.0% Larfico 62.5% 25.0% Comercorp 62.5% 25.0%
The First Republic Corporation of America and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Related Party Transactions (continued)
Certain transactions were entered into with the above-mentioned related parties and companies in which they have an ownership interest as follows:
Amount Related Party Transactions 1994 1993 1992 Ownership Insurance purchased in participation with the Rosen Group Properties: Premiums incurred $ 310,000 $ 385,000 $ 349,000 - Administrative fee received 75,000 75,000 50,000 - Payable to Rosen Group Properties for premiums above 310,000 276,000 292,000 - Home office rent 95,000 96,000 95,000 100% Loans payable-- Northern Star Textile Corp. - - 500,000 100%(1) Interest on $640,000 Note to A.A. Rosen 56,000 56,000 55,000 -
(1)--On August 29, 1991 the Company obtained a loan of $2,500,000 from Northern Star Textile Corporation, 57% of which is owned by the Rosen family and 43% by the Nimkoff family. The loan bore interest at 1/2% above prime and was payable on demand. The proceeds of the loan were used to pay off a short-term loan to European American Bank which bore interest at the same rate. The Company has repaid the loan.
(2)--At June 30, 1994, the minority share of stockholders' deficiency of Bluepoints Company Inc. amounted to $745,000. Such deficiency results from losses funded by the Company on behalf of the minority shareholders and represents a receivable from the minority shareholders which has been jointly guaranteed by a major stockholder and an officer of the Company.
See Note 4 for other related party information.
13. Other Matters
a. Other revenue for the year ended June 30, 1994 includes $1,321,775 received in full satisfaction of all remaining royalty obligations pursuant to royalty agreement which was terminated.
13. Other Matters (continued)
b. In June 1992, Whitlock Combing Company, Inc. ("Whitlock"), a wholly-owned subsidiary of the Company, sold substantially all of its assets for $3,650,000. A gain of approximately $407,000 on the sale was classified as deferred income, and upon satisfying certain conditions of the sale contract in fiscal 1993, the gain was recognized in income. In the fourth quarter of fiscal 1993 the remaining assets of Whitlock which are being held for sale, were written down by $800,000 to their estimated realizable value of approximately $1,500,000. For the years ended June 30, 1994, 1993 and 1992, respectively, Whitlock had sales of approximately $-0-, $354,000 and $5,271,000 and losses of $563,000, $1,686,000 and $1,220,000.
c. The Company is committed to expend approximately $1.1 million for the construction of space for a new tenant at one of the properties.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
a. and b. Identification of directors and executive officers:
All Positions and Name Age Offices with Registrant Served Since
Irving S. Bobrow 80 Director April 1983
Harry Bergman 52 Director October 1991 Treasurer June 1988 Secretary June 1988
Norman A. Halper 75 Director October 1969 President April 1983
A.A. Rosen 82 Chairman of the Board July 1981
Jonathan P. Rosen 50 Director February 1972 Vice President September 1978
William M. Silverman 52 Director December 1981
Louis H. Nimkoff 32 Vice President June 1988
Robert Nimkoff 33 Director April 1991 Vice President June 1988
Jane G. Weiman 50 Director December 1991
The term of office for all directors and executive officers will expire at the next annual meeting of stockholders, which is anticipated to be held in December 1994, upon the election and qualification of their successors.
c. Not applicable.
d. Family Relationships
Jonathan P. Rosen is the son of A.A. Rosen. Louis H. Nimkoff and Robert Nimkoff are brothers and are the nephews of A.A. Rosen. Jane G. Weiman is the sister-in-law of William M. Silverman and the niece of A.A. Rosen.
e. Business Experience
Irving S. Bobrow is a member of the New York Bar. For more than the past five years, Mr. Bobrow has been a member of the law firm of Bobrow & Rosen in New York City and has engaged in real estate investments for his own account.
William M. Silverman is a member of the New York Bar. For more than the past five years, Mr. Silverman has been a member of the law firm of Otterbourg, Steindler, Houston and Rosen P.C. in New York City.
Jane G. Weiman has been a private investor for more than the past five years. For the past several years Mrs. Weiman has also been an officer of the Board of the Washington D.C. Urban League and an advisor to Washington D.C. Counsel-Member-at-Large, John Ray. Mrs. Weiman became a Director of the Company in December 1991.
All other directors and executive officers have served as such for more than the past five years.
f. Not applicable.
g. Not applicable.
The Company believes, based on written representations received by it, that for the year ended June 30, 1994, all filing requirements under Section 16(a) of the Securities Exchange Act of 1934 applicable to beneficial owners of the Company's securities and the Company's officers and directors were complied with.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The chairman of the Company's Board of Directors has annually reviewed and set the compensation of the Chief Executive Officer of the Company who, in turn, has reviewed and set the compensation of the other officers of the Company. All such compensation is reviewed on or about April 1 of each year taking into consideration (i) the Company's financial performance during the preceding year, (ii) the performance of the employee during that year, and (iii) the need to retain competent executive officers dedicated to the enhancement of the Company's performance in future years by paying salaries comparable to those being paid to such executive officers by other companies involved in similar lines of business.
The following table sets forth all compensation paid or accrued by the Company during the last three fiscal years for services in all capacities to the Chief Executive Officer and each executive officer of the Company whose cash compensation exceeds $100,000.
(a) (b) (c) (i) Name and Annual Other Principal Position Year Compensation Compensation (1)
A.A. Rosen 6-30-94 $223,300 $15,810 Chairman 6-30-93 212,504 12,325 6-30-92 214,038 16,360
Norman A. Halper 6-30-94 223,300 15,810 President and Chief 6-30-93 212,504 12,325 Executive Officer 6-30-92 214,038 16,360
Harry Bergman 6-30-94 137,717 10,359 Secretary--Treasurer 6-30-93 128,693 10,873 6-30-92 119,443 9,838
(1) The Company and certain of its subsidiaries maintain two profit-sharing plans which cover a significant number of their employees. Vesting begins at 20% after two years of service with 100% vesting being reached after six years service. Company contributions to one such plan is at the discretion of the Board of Directors. The Company is required to make minimum contributions to the second plan and, at the discretion of the Board of Directors, may make additional contributions. The executive officers listed above are covered under the second plan and the amount contributed by the Company to such plan on behalf of each executive officer is set forth under the heading "Other Compensation" in the Executive Compensation Summary.
Compensation of Directors
Each director who is not an officer of the Company is paid $3,000 per quarter.
The following tabular information compares the yearly change in the cumulative stockholder return on the Company's Common Stock against the cumulative return of the Dow Jones Equity Market Index and the Dow Jones Conglomerates Index for the five fiscal years ended June 30, 1994. The stockholder return on the Company's Common Stock has been determined solely based on the price of the Common Stock since there have been no dividends declared on the Common Stock. Since there has been only limited or sporadic quotations for the Common Stock during the five year period, the price of the Common Stock at the relevant dates has been determined by utilizing the price at which the Company purchased shares of Common Stock on the dates closest to each measuring date.
1990 1991 1992 1993 1994 The First Republic Corporation of America 100 92 88 74 60 Dow Jones Equity Market Index 100 108 123 141 143 Dow Jones Independent - Conglomerates 100 110 121 155 156
The paper copy of the performance graph is being submitted to the Securities Exchange Commission pursuant Item 304(d)(2) of Regulation S-T.
(Insert Chart)
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a. Security Ownership of Certain Beneficial Owners
The following table sets forth certain information with respect to all persons who are known to the Company to be the beneficial owner of more than 5% of its common stock as of September 16, 1994:
Name and Address Amount and Nature Title of of Beneficial of Beneficial Percent Class Owner Ownership (1) of Class
Common Mary Nimkoff 108,582 (2) 16.11% 99 Grove Point Westport, Connecticut
Common Jonathan P. Rosen 227,726 (3) 33.78 40 East 69th St. New York, New York
Common Lynn M. Silverman 113,350 16.81 911 Park Avenue New York, New York
Common Jane G. Weiman 113,290 16.81 5610 Wisconsin Avenue Chevy Chase, Maryland
(1)--Except as noted below in Notes (2) and (3), all shares are owned directly by the parties listed in the table.
(2)--Includes 8,060 shares representing her proportionate interest in 19,188 shares owned by Tranel, Inc. Tranel, Inc. is a corporation of which 42%, 15.2%, 34.8%, 4% and 4% of the shares of which are owned by Mary Nimkoff, Jonathan P. Rosen, Miriam N. Rosen, Louis H. Nimkoff and Robert Nimkoff, respectively.
(3)--Includes 2,917 shares representing his proportionate interest in 19,188 shares owned by Tranel, Inc.
b. Security Ownership of Management
The following table sets forth as of September 16, 1994 certain information with respect to security holdings in the Company and Bluepoints, an 80.2% owned subsidiary of the Company, by directors of the Company and all officers and directors as a group:
Common Stock Common Stock of Bluepoints Amount Percent Amount Percent Name of Officer Beneficially of Beneficially of or Director Owned (1) Class Owned Class Irving S. Bobrow 200 .03% Robert Nimkoff 767 (2) .11 Norman A. Halper 400 .06 Jonathan P. Rosen 227,726 33.78 500 (4) 4.95% A.A. Rosen (3) (3) William M. Silverman 200 (5) .03 (5) Jane G. Weiman 113,290 16.81 500 4.95% All officers and directors as a group (8 persons) 344,850 51.16% 1,000 9.90%
(1)--Messrs. Bobrow, Halper, Silverman and Mrs. Weiman own their shares directly. Jonathan P. Rosen owns 224,809 shares directly. See Notes (2) and (3) of the preceding table.
(2)--Robert Nimkoff owns 767 shares representing his proportionate interest in 19,188 shares owned by Tranel, Inc.
(3)--Does not include (a) 6,677 shares representing his wife's (Miriam N. Rosen) proportionate interest in 19,188 shares owned by Tranel, Inc., and (b) 25,082 shares of common stock and 500 shares of Bluepoints owned by his wife directly. A.A. Rosen disclaims beneficial ownership of such shares.
(4)--Owned directly.
(5)--Does not include 113,350 shares of common stock and 500 shares of Bluepoints owned by his wife (Lynn M. Silverman) directly. Mr. Silverman disclaims beneficial ownership of such shares.
c. Changes in Control
The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
a. Transactions with Management and Others
Lynn M. Silverman a principal stockholder of the Company, Jane G. Weiman, a director and principal stockholder of the Company, Jonathan P. Rosen, a director, vice president and principal stockholder of the Company, and Miriam N. Rosen, wife of A.A. Rosen and mother of Jonathan P. Rosen, own in the aggregate 19.8% of the outstanding shares of Bluepoints. The remainder of the shares of Bluepoints is owned by the Company. Lynn M. Silverman is the wife of William M. Silverman, a director of the Company. A.A. Rosen and Jonathan P. Rosen have jointly provided a guarantee to the Company to reimburse it for the minority shareholders proportionate share of losses which have been previously funded by the Company on behalf of the minority shareholders.
Bluepoints holds a second mortgage loan on the industrial center owned by the Company in East Newark, New Jersey. From July 1993 through September 1994, the Company made payments of $149,850 with respect to such loan, $52,430 of which was applied to the payment of interest and $97,420 to amortization of principal. As of September 1, 1994, the outstanding principal balance of the loan was $401,772. The loan bears interest at the rate of 8% per annum, provides for monthly payments of $9,990 and is self-liquidating over a period which expires in July 1998.
The Company's corporate office is located in a building owned by 302 Fifth Ave. Associates, a partnership owned 100% by A.A. Rosen, Miriam Rosen and Jonathan Rosen. The Company is a month-to-month tenant, paying rent of $7,709 per month, which the Company believes is comparable to other rentals in the areas.
A.A. Rosen owns 50% of Isca C.A. and Langomorro CIA, Ltda. (collectively referred to as "Mondragon"), two Ecuadorian Corporations engaged in shrimp farming operations. In the current fiscal year substantially all of Mondragon shrimp production, approximately $600,000 was sold to Bluepoints. A.A. Rosen also holds a $640,000 note payable by Bluepoints which note was originally issued in May 1991 in connection with the acquisition by Bluepoints of a 38% interest in Mondragon and an additional 12-1/2% interest in Larfico Larvas Del Pacifico S.A., an Ecuadorian Corporation which owns and operates a shrimp hatchery and Comercorp S.A. which owns certain real property in Ecuador. From July 1, 1993 through August 21, 1994 A.A. Rosen received $56,000 in interest on the $640,000 note.
b. Certain Business Relationships
The Company and its subsidiaries purchase substantially all of their property, casualty and liability insurance through participation with a group of other entities controlled by A.A. Rosen and Jonathan P. Rosen (the "Rosen Group Properties"). This procedure enables the group to obtain negotiated insurance rates. During the fiscal years ended June 30, 1994, 1993 and 1992, total premiums incurred by the Company and its subsidiaries under this arrangement amounted to approximately $310,000, $385,000 and $349,000, respectively. The Company received fees of $75,000 in fiscal 1994 and 1993 and $50,000 in fiscal 1992, representing charges to the group for administrative services performed by Company personnel in connection with the foregoing. At June 30, 1994 approximately $310,000 was payable to Rosen Group Properties.
Tranel Inc. and Statecourt Enterprises, Inc. each owns a 25% interest in 167-unit garden complex located in Orlando, Florida in which the Company owns the remaining 50%. Tranel Inc. is owned by Mary Nimkoff, Jonathan P. Rosen, Miriam N. Rosen, Robert Nimkoff and Louis H. Nimkoff (see Item 12) and Statecourt Enterprises, Inc. is owned 48% by A.A. Rosen, 20% by Jonathan P. Rosen and 32% by the Miriam N. Rosen Trust.
c. Indebtedness of Management
A.A. Rosen owns 25% of the outstanding stock of Larfico, an Ecuadorian corporation that owns a hatchery that produces post-larval shrimp and 50% of the outstanding stock of Mondragon, an Ecuadorian company engaged in shrimp farming operations. Bluepoints beneficially owns 62.5% of the outstanding stock of Larfico and all of the outstanding stock of Emporsa, an Ecuadorian corporation engaged in shrimp farming operations. As of August 31, 1994, Larfico was indebted to Bluepoints for $196,667 of loans made by Bluepoints to Larfico at various dates between November 8, 1985 and August 5, 1988. Such loans bear interest at 1% over the prime rate in effect at European American Bank and are due August 1995. Since July 1, 1993, the largest aggregate amount of outstanding indebtedness from Larfico to Bluepoints was $196,667.
Since July 1, 1993, the largest amount of outstanding indebtedness from Emporsa and Larfico to Mondragon was $1,010,000 of loans which is the balance at June 30, 1994. Such loans bear no interest and have no fixed maturity. Since July 1, 1993, the largest amount of outstanding indebtedness from Mondragon to Larfico and Emporsa was $208,000. The balance at June 30, 1994 was $157,000. Said indebtedness has no fixed maturity and is noninterest bearing.
As of June 30, 1994, Emporsa and Larfico were indebted to A.A. Rosen for $87,000 of loans. Such loans bear interest at prime plus 1% and have no fixed maturity. Since July 1, 1993, the largest amount of outstanding indebtedness from Emporsa and Larfico to A.A. Rosen was $87,000.
As of August 31, 1994, Bluepoints was indebted to the Company for $11,838,000 of loans made by the Company to Bluepoints at various dates between November 8, 1985 and August 31, 1994. Such loans bear interest at the rate of 1% over the prime rate in effect at European American Bank and are due on demand or at various dates through September 1995. Since July 1, 1993, the largest aggregate amount of outstanding indebtedness from Bluepoints to the Company was $11,838,000. A substantial portion of the foregoing loans was used by Bluepoints to acquire and fund the Ecuadorian shrimp operations.
d. Not applicable.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K
a. 1. Financial Statements
The following financial statements of The First Republic Corporation of America and Subsidiaries are included in Part II, Item 8:
Reports of Independent Auditors Consolidated Balance Sheets__June 30, 1994 and 1993 Consolidated Statements of Income__Years Ended June 30, 1994, 1993 and 1992 Consolidated Statements of Retained Earnings__Years Ended June 30, 1994, 1993 and 1992 Consolidated Statements of Cash Flows__Years Ended June 30, 1994, 1993 and 1992 Notes to Consolidated Financial Statements
a. 2. Financial Statement Schedules:
Schedule II__Amounts Receivable from Related Parties and Underwriters, Promotors, and Employees Other Than Related Parties Schedule VIII__Valuation and Qualifying Accounts Schedule IX__Short-Term Borrowings Schedule X__Supplementary Income Statement Information Schedule XI__Real Estate and Accumulated Depreciation Schedule XII__Mortgage Loans on Real Estate
All other schedules have been omitted because they arenot applicable or the required information is shown in the financial statements or the notes thereto.
b. Reports on Form 8-K
None
c. Exhibits
3 Articles of Incorporation and bylaws
(i) Articles of Incorporation are incorporated by reference to Form 10-K for the fiscal year ended June 30, 1981.
(ii) Bylaws are incorporated by reference to Form 10-K for the fiscal year ended June 30, 1992.
21 Subsidiaries of the Company
27 Financial Data Schedule
The First Republic Corporation of America and Subsidiaries
Schedule II__Amounts Receivable from Related Parties and Underwriters, Promoters, and Employees Other Than Related Parties
- - ------------------------------------------------------------------------------ Col. A Col. B Col. C Col. D Col. E - - ------------------------------------------------------------------------------ Deductions Balance at End Period ------------------ ---------------------- (1) (2) (1) (2) Name of Balance at Additions Amounts Amounts Current Not Current Debtor Beginning Collected Written of Period Off - - ------------------------------------------------------------------------------ June 30, 1994
Due from $283,000 $462,000 $745,000 certain ---------------------- --------- sharehol- ders (a)
June 30, 1993
Due from None $283,000 $283,000 certain --------------------- --------- sharehol- ders (a)
(a)__Represents receivables from minority shareholders of Bluepoints Company Inc., which has been jointly guaranteed by a major stockholder and an officer of the Company.
The First Republic Corporation of America and Subsidiaries
Schedule VIII__Valuation and Qualifying Accounts
Col. A Col B Col. C Col. D Col. E - - ---------------------------------------------------------------------------- Additions ----------------------- Description Balance at Charges to Charges to Deductions Balance at Beginning Cost and Other Accts Describe End of of Period Expenses Describe Period - - ------------------------------------------------------------------------------ Year ended June 30, 1994:
Allowance $158,213 $150,000 $155,033(a) $153,180 for doubt- ====================== ========================= ful accnts
Year ended June 30, 1993:
Allowance $ 84,297 $ 73,916 $ - $158,213 for doubt- ====================== ========================= ful accnts
Year ended June 30, 1992:
Allowance $102,797 $ 18,500(a) $ 84,297 for doubt- ========== ========================= ful accnts
(a) Amounts charged off and credits issued, net of recoveries on accounts previously written off.
The First Republic Corporation of America and Subsidiaries
Schedule IX__Short-Term Borrowings
- - ------------------------------------------------------------------------------ Col. A Col. B Col. C Col. D Col. E Col. F - - ------------------------------------------------------------------------------ Category of Aggrete Balance at Weighted Maximum Average Weighted Short-Term Borrowings End of Average Amount Amount Average Period Interest Outstanding Outstanding Interest Rate During the During the During the Period Period(d) Period(e) - - ------------------------------------------------------------------------------- Year ended June 30, 1994: Domestic (a) $2,100,000 8.25 $2,600,000 $1,565,000 7.25 Foreign (b) 468,016 21.7 630,964 519,000 21.7
Year ended June 30, 1993: Domestic (c) (f) $2,200,000 7.0 $5,250,000 $1,300,000 7.0 Foreign (b) 630,964 15.0 630,964 582,592 14.63
Year ended June 30, 1992: Domestic (c) (f) $ 670,765 6.5 $12,200,000 $8,865,000 7.4 Foreign (b) 550,315 22.0 939,619 642,000 21,27
(a)__The general terms of the notes are unsecured and payable on demand and are issued under lines of credit. (b)__The general terms of the notes vary from unsecured payment on demand to payable within a year. (c)__The general terms of the notes are payable on demand and are issued under lines of credit, secured by the real estate of the East Newark Industrial Center. (d)__The average amount outstanding during the period was computed by dividing the total of month-end principal balances or the total of month-end daily average balances by the number of months in the period. (e)__The weighted average interest rate during the period was computed by dividing the actual interest expense by average short-term debt outstanding. (f)__The balance above reflects the impact of the Company's refinancing on its line of credit (see Note 5 to the Consolidated Financial Statements).
The First Republic Corporation of America and Subsidiaries
Schedule X__Supplementary Income Statement Information
- - ---------------------------------------------------------------------------- Col. A Col. B - - ---------------------------------------------------------------------------- Item Charged to Costs and Expenses - - ---------------------------------------------------------------------------- Year ended June 30, 1994: 1. Maintenance and repairs $2,627,896 2. Depreciation and amortization of intangible assets * 3. Taxes, other than payroll and income taxes: Real estate taxes 3,028,221 Sundry other taxes * 4. Royalties None 5. Advertising costs *
Year ended June 30, 1993: 1. Maintenance and repairs $2,597,848 2. Depreciation and amortization of intangible assets * 3. Taxes, other than payroll and income taxes: Real estate taxes 2,913,650 Sundry other taxes * 4. Royalties None 5. Advertising costs *
Year ended June 30, 1992: 1. Maintenance and repairs $3,035,418 2. Depreciation and amortizationof intangible assets * 3. Taxes, other than payroll and income taxes: Real estate taxes 2,691,468 Sundry other taxes * 4. Royalties None 5. Advertising costs *
* Amounts for depreciation and amortization of intangible assets, advertising and sundry other taxes are not presented as such amounts are less than 1% of total sales and revenues.
The First Republic Corporation of America and Subsidiaries
Schedule XI__Real Estate and Accumulated Depreciation
Year ended June 30, 1994
Column A Column B Column C Column D - - ------------------------------------------------------------------------------ Initial Cost to Cost Capitalized Company Subsequent to --------------------- Acquisition ------------------ Description Encumberances Land Buildings and Additions Carrying Related Assets Costs - - ------------------------------------------------------------------------------ 250 W. 39th St. Building, New York, NY- Eighteen Story $ 437,559 $1,155,129 $(603,978) office building
Waltham Engineeing Center, Waltham, MA- Seventeen multi- story Industrial 188,573 2,163,945 290,169 buildings
Sheraton Inn Motor Hotel- Syracuse, Liverpool NY 1,651,923 3,970,445 Hotel operations
Video Film Center, New York, NY- Ten Story office $ 6,000,000 625,000 3,439,061 721,293 building
East Newwark, NJ- Thirty multi- stroy indrustrial 10,877,790(b) 605,089 4,068,693 (2,549,279) buildings
Greensboro Plaza, Greensboro, NC- 379,947 1,696,953 Shopping center
Greensboro South, Greensboro, NC- 2,975,004 419,739 1,350,376 1,382,866 Shopping center
Nyanza Building Woonsocket, Rhode Island-, Four story 60,000 1,288,139 (1083,733) industrial building
Richmond Shopping Center, Richmond, VA- Shopping 293,814 758,886 53,830 center
First Republic Office Park, Liverpool, NY Two, two-story 1,800,000(c) 351,600 4,124,526 (12,758) office buildings
Virginia Beach Shoping Center, Virginia Beach, 2,688,630 250,241 772,113 247,836 VA-, Shopping center
The First Republic Building Corp., Liverpool, NY- 413,779 5,681,562 Motor hotel(c)
Jefferson National Bank Building-Mami, FL-, Six story 2,044,409 5,643,015 office building
Brookhaven Shopping Center, Brookhaven, 1,927,185 521,798 3,632,019 (599,153) PA, Shopping Center
260 Merrimac Street Newburyport, MA Three story 195,213 377,317 office building
Melbourne, FL Vacant land 1,439,714 3,150 ___________________________________________________ Totals $26,268,609 $8,226,475 $37,803,657 $1,820,688 ===================================================
The First Republic Corporation of America and Subsidiaries
Schedule XI__Real Estate and Accumulated Depreciation (continued)
Year ended June 30, 1994
Column E Column F Column G Column H Column I - - ------------------------------------------------------------------------------ Gross Amount at which Life on which Carried at Close of Period(a) Department in - - ----------------------------- Latest Income Buildings Date of Statements is and Related Accumulated Construc- Date Computed Land Assets Total Depreciation tion Acquire - - ------------------------------------------------------------------------------
$437,559 $551,151 $988,710 $103,245 5/19/67 5--15 years
188,573 2,454,114 2,642,687 654,347 7/1/62 10--20 years
5,622,368 5,622,368 3,909,369 3/17/69 5--15 years
625,000 4,160,354 4,785,354 3,025,834 10/4/68 33--1/3 years
605,089 1,519,414 2,124,503 675,661 3/11/63 21--1/3 years
379,947 1,696,953 2,076,900 1,550,009 12/1/74 21--1/3 years
706,906 2,446,075 3,152,981 1,432,225 12/1/74 21--1/3 years
60,000 204,406 264,406 56,643 11/1/68 10--20 years
360,507 746,023 1,106,530 561,285 3/15/76 25 years
351,600 4,111,768 4,463,368 917,288 10/1/85 5--40 years
397,338 872,852 1,270,190 544,025 3/30/76 25-31.5 years
413,779 5,681,562 6,095,341 5,349,227 9/21/62 10-25 years
2,044,409 5,643,015 7,687,424 1,104,713 4/27/88 31--1/2 years
149,456 3,405,208 3,554,664 1,881,744 12/16/76 5--33 years
195,213 377,317 572,530 203,974 11/25/87 10--25 years
1,442,864 1,442,864 - - ------------------------------------------------- $8,358,240 $39,492,580 $47,850,820 $21,969,589 =================================================
(a)__Cost for Federal income tax purposes approximates amounts reflected in Column E. (b)__A mortgage is held by the bank who provides a line of credit to the Company. (See Note 5 to the Consolidated Financial Statements.) (c)__Assets of the First Republic Building Corp. are also pledged as collateral for the Onondaga County Industrial Development Agency Bonds. (See Note 5 to the Consolidated Financial Statements.)
The First Republic Corporation of America and Subsidiaries
Schedule XI--Real Estate and Accumulated Depreciation (continued)
Year ended June 30
1994 1993 ------------------------------------------------------ Real Estate Accumulated Real Estate Accumulated Owned Depreciation Owned Depreciation ------------------------------------------------------ The following is a reconciliation of the real estate owned and accumulated depreciation, beginning and end of the year:
Balance, beginning $47,118,995 $21,230,995 $47,348,779 $20,372,773 of year
Additions including transfers from construc- tions-in-progress during year 1,590,811 1,597,580 855,696 1,943,702
Deductions: Write-offs of fully depreciated assets (858,986) (858,986) (1,085,480) (1,085,480) ------------------------------------------------------ Balance, end of year $47,850,820 $21,969,589 $47,118,995 $21,230,995 ======================================================
-------------------------------- Real Estate Accumulated Owned Depreciation
$46,262,669 $18,928,345
1,532,243 1,890,561
(446,133) (446,133) - - ---------------------------------- $47,348,779 $20,372,773 ==================================
Note: Includes assets used in the real estate and hotel operations.
The First Republic Corporation of America and Subsidiaries
Schedule XII__Mortgage Loans on Real Estate
- - ------------------------------------------------------------------------------ Col. A Col. B Col. C Col. D Col. E Col. F Col. G Col. H - - ------------------------------------------------------------------------------ Description Interest Final Periodic Prior Face Carrying Principal Rate Maturity Payments Liens Amount Amount Amount of Date Terms of of loans Mortgages Mortgages Subject (c) to Delinquent Principal or Interest - - ------------------------------------------------------------------------------- First lien on December motel-, Miami 8.00% 1, 1996 $ 7,338 None $688,903 $ 688,903 None Beach Florida
First lien on building- 11.50 December 10,165(a) None 934,215 934,215 $934,215 Bronx, NY 1, 1992
35 First lien on condominiums Orlando, FL 7.4-10.5 December (approximately 1, 1994 all had out- to 21,000(b) None 2,016,897 2,016,897 None standing balances February --------------------- of between 1, 1996 $55,000 to $66,500)
Totals $3,640,015 $3,640,015 =======================
(a)__Balloon payment of $954,000 was due December 1, 1992. The note was extended on a month-to-month basis under the same terms and conditions and in August 1994, foreclosure proceedings were commenced by the Company (see Note 3 to the consolidated financial statements). (b)__Payment terms of mortgages are monthly payments for seven years and remaining principal balance due at that time. (c)__Cost for Federal income tax purposes approximates amounts reflected in Column F.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE FIRST REPUBLIC CORPORATION OF AMERICA
By /s/ Norman A. Halper -------------------------------------- Norman A. Halper, Chief Executive and Chief Operating Officer
By /s/ Harry Bergman -------------------------------------- Harry Bergman, Chief Financial and Chief Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Date -----------------------------------
/s/ Harry Bergman - - ------------------------------------ Harry Bergman, Director
/s/ Irving S. Bobrow - - ------------------------------------- Irving S. Bobrow, Director
/s/ Norman A. Halper - - -------------------------------------- Norman A. Halper, Director
/s/ Robert Nimkoff - - -------------------------------------- Robert Nimkoff, Director
/s/ A.A. Rosen - - -------------------------------------- A.A. Rosen, Director
/s/ Jonathan P. Rosen - - -------------------------------------- Jonathan P. Rosen, Director
Exhibit 21 The First Republic Corporation of America
List of Subsidiaries
The First Republic Building Corp. Bluepoints Company Inc. Bluepoints Company Inc. of Maryland Hanora Spinning Inc. Quality Yarns Inc.
Whitlock Combing Company, Inc. Hanora South Inc.
J & M Dyers Inc. FRC of Delaware Inc. FRCA Sunscape Corp.
Midland Health Care Inc. Midland at Rochelle Park Inc. Midland Health Care at Logan Manor Inc. Marchelot S.A.
Exhibit 27 The First Republic Corporation of America and Subsidiaries
Artile 5 FD5__10-K
At June 30, 1994 and for Year then ended June 30, 1994
Item Description - - ----------------------------------------------------------
Cash and cash items $1,316,144 Marketable securities - Notes and accounts receivable-trade 5,647,090 Allowances for doubtful accounts 153,180 Inventory 4,731,545 Total current assets 13,975,355 Property, plant and equipment 69,431,186 Accumulated depreciation 29,276,551 Total assets 80,163,628 Total current liabilities 9,412,274 Bonds, mortgages and similar debt 23,870,298 Preferred stock-mandatory redemption - Preferred stock-no mandatory redemption - Common stock 1,175,261 Other stockholders' equity 41,088,455 Total liabilities and stockholders' equity 80,163,628 Net sales of tangible products 23,717,207 Total revenues 46,702,373 Cost of tangible goods sold 20,704,424 Total costs and expenses applicable to sales and revenues 22,606,782 Other costs and expenses - Provision for doubtful accounts and notes 150,000 Interest and amortization of debt discount 2,248,497 Income before taxes and other items 1,142,670 Income tax expense 1,055,000 Income continuing operations 87,670 Discontinued operations - Extraordinary items 300,000 Cumulative effect-changes in accounting principles 1,173,000 Net income or loss 1,560,670 Earnings per share-primary 2.31 Earnings per share-fully diluted 2.31