ITEM 1. BUSINESS
a. BUSINESS DEVELOPMENT Pismo Coast Village, Inc., the "Registrant" or the "Company," was incorporated under the laws of the State of California on April 2, 1975. The Company's sole business is owning and operating Pismo Coast Village RV Resort, a recreational vehicle resort (hereinafter the "Resort") in Pismo Beach, California. The Resort has continued to enhance its business by upgrading facilities and services to better serve customers.
b. BUSINESS OF ISSUER The Company is engaged in only one business, namely, the ownership and operation of the Resort. The Company generates revenue from rental of camping sites, recreational vehicle storage, recreational vehicle repair and retail sales from a general store and recreational vehicle parts store. Accordingly, all of the revenues, operating profit (loss) and identifiable assets of the Company are attributable to a single industry segment.
Pismo Coast Village RV Resort is a full-service 400 space recreational vehicle resort. Its resort operations include site rentals, RV storage business, video arcade, Laundromat, and other income sources related to the operation. The retail operations include a general store, RV parts store, and RV repair shop. In addition, the Company has a recreation department that provides a youth program and recreational equipment rentals.
PUBLIC AND SHAREHOLDER USERS The present policy of the Company is to offer each shareholder the opportunity for 45 nights of free use of sites at the Resort, 25 nights may be used during prime time and 20 nights during non-prime time. The free use of sites by shareholders is managed by designating the nights of the year as prime time and non-prime time. A prime time night is one that is most in demand, for example, Memorial Day Weekend and the period from June 1 until Labor Day. Non-prime time is that time with the least demand. Each shareholder is furnished annually a calendar that designates the prime and non-prime time nights; it also provides a schedule of when reservations can be made and the procedure for making reservations. Shareholder's free use of sites average approximately 21% to 24% annually (refer to Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, page 9).
SEASONAL ASPECTS OF BUSINESS The business of the Company is seasonal and is concentrated during prime days of the year which are defined as follows: President's Day Weekend, Easter week, Memorial Day Weekend, summer vacation months, Labor Day, Thanksgiving Weekend and Christmas vacation.
WORKING CAPITAL REQUIREMENTS By accumulating reserves during the prime seasons, the Company is able generally to meet its working capital needs during off-season. Industry practice is to accumulate funds during the prime season, and use such funds, as necessary, in the off-season. The Company has arranged, but not used, a $500,000 line of credit to ensure funds are available, if necessary, in the off-season.
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COMPETITION The Company is in competition with nine other RV parks located within a five-mile radius. Since its property is the only property located adjacent to the beach, it has a competitive edge. The Company is recognized as a recreational vehicle resort rather than a park because of its upgraded facilities and amenities which include 39 Channels of Satellite TV, high-speed wireless Internet service throughout the property, a heated pool, a miniature golf course and a recreational program. The Resort is noted for its ability to provide full service which includes RV storage and RV repair and service. The Resort is consistently given high ratings by industry travel guides based on resort appearance, facilities offered, and recreational programs. In November 2007, Pismo Coast Village RV Resort was awarded the designation of 2007/2008 RV Park of the Year, Large Park Category, by the National Association of RV Parks and Campgrounds (ARVC) which has a membership of more than 3,900 properties. Pismo Coast Village RV Resort also received national Park of the Year honors in 1999, 1997, and 1995. In fiscal year 2004, Pismo Coast Village RV Resort was awarded the designation of RV Park of the Year - Mega Park Category 2004 by the California Travel Parks Association (CTPA), now known as the California Association of RV Parks and Campgrounds(CalARVC). These factors allow the Resort to price its site rental fees above most of its competition based on perceived value received.
Competition for the tourist market is strong between the cities on the Central Coast of California. Resort management and staff are involved with the City of Pismo Beach, Chamber of Commerce, Conference and Visitors Bureau, and are major sponsors in cooperative events and advertising. The Resort continues to market off-season discounts and place advertisements in trade publications and industry directories. In addition, the Company places its brochure with companies selling or renting recreational vehicles and has found the Resort's Internet web page to be very effective. The marketing program also targets groups and clubs by offering group discounts, meeting facilities, and catering services. The Company's marketing plan was funded by $58,138 for fiscal year 2010 which was developed out of operating revenues. The major source of the Company's business is repeat business, which has been developed by attention to good customer service and providing quality recreational facilities.
ENVIRONMENTAL REGULATION The Company is affected by federal, state and local antipollution laws and regulations. Due to the nature of its business operations (camping, RV storage and small retail store sales), the discharge of materials into the environment is not considered to be of a significant concern, and the EPA has not designated the Company as a potentially responsible party for clean up of hazardous waste.
The main property of the Resort is located within the boundaries of those lands under the review and purview of the Coastal Commission of the State of California and the City of Pismo Beach. The water and sewer systems are serviced by the City of Pismo Beach. The Company was subject to state and federal regulations regarding the fiscal year 1996 reconstruction of an outflow structure that empties into Pismo Creek at the north boundary of the Resort. Because the Resort is within the wetlands area, the California Coastal Commission required permits for repair and construction to be reviewed by the following agencies: City of Pismo Beach, State Lands Commission, Regional Water Quality Board, State of California, California Department of Fish and Game, State Department of Parks and Recreation and the Army Corps of Engineers.
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EMPLOYEES As of September 30, 2010, the Company employed approximately 56 people with 22 of these on a part-time basis and 34 on a full-time basis. Due to the seasonal nature of the business, additional staff is needed during peak periods and fewer during the off-season. Staffing levels during the fiscal year ranged from approximately 56 employees to 63 employees. Management considers its labor relations to be good.
ADDITIONAL INFORMATION The Company has remained conservative when considering rates and rate increases. As a result of experiencing increasing operational expenses and conducting a local comparative rate study, the Board voted not to increase RV storage, however, there was a two dollar per regular weekend and weekday night site rental rate increase effective January 1, 2010. It is anticipated the proposed rates will continue to market site usage at its highest value and not negatively impact the Company's ability to capture an optimum market share.
c. REPORTS TO SECURITY HOLDERS Pismo Coast Village files quarterly reports, an annual report, and periodic reports, providing the public with current information about the Company and its operations with the Securities and Exchange Commission.
The Company makes available on its website, www.pismocoastvillage.com, access to its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission.
The public may read and copy any materials filed with the Securities and Exchange Commission at the SEC's Public Reference Room located at 100 F Street, N. E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy statements, and other information that the Company files with the SEC.
ITEM 2.
ITEM 2. PROPERTIES
The Company's principal asset consists of the Resort which is located at 165 South Dolliver Street in Pismo Beach, California. The Resort is built on a 26-acre site and includes 400 campsites with full hookups and nearby restrooms with showers and common facilities, such as a video arcade, recreation hall, general store, swimming pool, Laundromat, and three playgrounds.
In 1980, the Company purchased a 2.1 acre parcel of real property located at 2250 22nd Street, Oceano, California, at a price of $66,564. The property is being used by the Company as a storage facility for recreational vehicles. The storage capacity of this lot is approximately 124 units.
In 1981, the Company exercised an option and purchased a 3.3 acre parcel located at 300 South Dolliver Street, Pismo Beach, California, at a price of $300,000. The property, which previously had been leased by the Company, is used primarily as a recreational vehicle storage yard. The storage capacity of this lot is approximately 220 units.
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In 1988, the Company purchased approximately 0.6 acres of property at 180 South Dolliver Street, Pismo Beach, California, across the street from the main property, consisting of a large building with a storefront and one large maintenance bay in the rear. Also, on the property is a smaller garage-type building with three parking stalls. The Company enlarged its recreational vehicle repair operation, added RV storage for approximately eleven units and developed the storefront into a RV parts store. The property was purchased for $345,000, of which $300,000 was financed and paid in full during fiscal year 1997.
On December 31, 1998, the Company closed escrow on a parcel of property to be developed as an additional RV storage facility. The 5.5 acre property is located in Oceano adjacent to existing Company RV storage. On October 14, 1999, construction was completed and the Company received County approval to occupy the premises. The property was purchased for $495,000, of which $395,000 was financed and paid in full in July 2000. Development cost amounted to $195,723 and was allocated from operational cash flow. Storage capacity for this property is approximately 405 units and is currently full. The property is in good condition and being held as collateral for the note on the properties purchased in 2006.
On February 28, 2003, the Company closed escrow on a parcel of property to be developed as an additional RV storage facility. The 4.7 acre property is located in Oceano and was purchased for $650,000, of which $500,000 was financed. The note on this property was paid off in September 2005. The construction permit granted by the County of San Luis Obispo was contingent upon permit approval by the California Coastal Commission. In January 2006, the Commission denied the permit based on wetland conditions. The property is currently being considered for another use.
Due to the continued demand for RV storage and the denial of the aforementioned permit, the Board of Directors elected to purchase additional property. On January 11, 2006, the Company closed escrow on a six-acre property previously developed as an RV storage facility. The purchase price was $2.1 million, and included approximately 80 existing storage customers. This property had been permitted and developed the previous year, and is considered in good condition with a capacity of approximately 264 units.
On April 6, 2006, the Company purchased the 2.2 acre property in Oceano it previously rented from Union Pacific Railroad for RV storage. The purchase price was $925,000 and the condition is considered good. The lot is operating at full capacity with 181 units.
On May 9, 2008, the Company closed escrow on a 19.55 acre property in Arroyo Grande to be developed for RV storage. The purchase price was $3.1 million for the undeveloped land. The Company received a development permit through the County of San Luis Obispo Planning Commission. The development was completed in May 2010 and the storage capacity is expected to be approximately 900 units.
Funding for these acquisitions was obtained through a local lending institution with a balance owed as of September 30, 2010, of $4,636,645.
There is no deferred maintenance on any of the Resort's facilities. The Company's facilities are in good condition and adequate to meet the needs of the shareholder users as well as the public users. The Company continues to develop sufficient revenue from general public sites sales to support a continued positive maintenance program and to meet the demands of shareholders use of free sites.
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Management considers the Company's insurance policies offer adequate coverage for risk and liability exposure.
The Resort, RV Repair Shop and Parts Store, six storage facilities, and the undeveloped property being held, constitute substantially all the Company's property, and are owned in fee. Three storage lots are leased by the Company pursuant to the herein below described leases.
1. TRAILER STORAGE YARDS In 1986 the Company leased a parcel of land 100 feet wide by 960 feet long from the Union Pacific Railroad Corporation. The property is being used by the Company as a storage facility for recreational vehicles. Capital improvements in the amount of $40,000 were made to this property, which provides storage for approximately 181 units. On July 29, 2005, Union Pacific Railroad Corporation sold the property to the Weyrick Family Trust who, after entering into a five-year lease, agreed to sell the property to the Company for $925,000. This transaction was completed April 6, 2006.
Associated with the previously mentioned property, and included within the fenced storage perimeter, is the lease of a ten foot by 960 foot section belonging to Union Pacific Railroad. This lease also allows for the Company's fence to encroach upon the lessor's property. This annual lease is currently $1,739, with a 3% automatic annual increase.
In 1991 the Company developed a lease for a five-acre RV storage lot at the Oceano Airport clear zone as storage for approximately 312 RVs. This lot was developed to replace a 100-unit storage lot that was closed when the lease was not renewed. Construction was completed in January 1992 and capital improvements in the amount of $330,768 were made to this property of which $300,000 was financed and paid in full during Fiscal 1997. The original lease on the storage lot was for five years and the Company has executed a third five-year option with the County of San Luis Obispo which expired December 31, 2006. In response to the Company's request for another five-year extension, the County has answered that, until the Oceano Airport Master Plan is updated, the lease will be a month-to month holdover.
Lease payments for the first year of control and occupancy area were $1,500 per month, $2,000 per month for the second year and continuing years are tied to the "CPI" index. During fiscal year 2010, lease payments were made in the amount of $35,201. Current rent payments are $2,933 and may be impacted in the future by the flood district assessment.
In March of 2006, the Company entered into a seven-year lease with Sheridan Properties LP (formerly Vawter Investments, LP), owners of four acres the Company will utilize for RV storage. The Company developed the property and received concessions through limited free and discounted rent. The property was occupied for storage in June 2006 and stores approximately 146 units.
Lease payments are currently $4,802 per month and will escalate March 1st of each year by the Consumer Price Index (CPI). During fiscal year 2010, lease payments were made in the amount of $57,618.
The Resort leases out areas to other companies to insure that the best service and equipment are available for guest use. These areas are leased from the Company pursuant to the herein below described leases.
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1. RECREATIONAL ARCADE AGREEMENT WITH COIN AMUSEMENTS, INC. This agreement is dated November 1, 2010, and pursuant to this agreement, the Company granted Coin Amusements, Inc. the concession to operate various coin-operated game units at the Resort. The one year term expires on October 31, 2011, and continued renewal is expected without significant impact.
2. WEB SERVICE COMPANY, GOLETA, CA The seven-year lease that expired October 31, 2009 was renewed for another seven years effective September 1, 2009. The lease grants Web Service Company the right to place and service coin-operated laundry machines on the Resort. The agreement provides that 70% of the Lessee's gross income be paid to the Company as rent. On September 10, 2009, Web replaced all 18 washers and 18 dryers with new equipment. Continued renewal is expected without significant impact.
3. PISMO COAST INVESTMENTS The Company renewed a lease agreement with Ms. Jeanne Sousa, a California Corporations Licensed Broker, for the lease of a 200-square foot building at the Resort from which she conducts sales activities in the Company's stock. The term of the lease is for three years commencing on January 1, 2011, and ending on December 31, 2013. Continued renewal is expected without significant impact. Termination or cancellation may be made by either Lessor or Lessee by giving the other party sixty (60) days written notice.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
No pending legal proceedings against the Company other than routine litigation incidental to the business.
ITEM 4.
ITEM 4. (REMOVED AND RESERVED).
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
a. MARKET INFORMATION There is no market for the Company's common stock, and there are only limited or sporadic transactions in its stock. Ms. Jeanne E. Sousa, a licensed broker/dealer, handled sales of the Company shares as Pismo Coast Investments. The last transaction the Company is aware of occurred September 25, 2010, at a price of $28,500 for one share conveyed. This price was used for computation of aggregate market value of Company stock on page 2 of this Report.
b. HOLDERS The approximate number of holders of the Company's common stock on September 30, 2010, was 1,551.
c. DIVIDENDS The Company has paid no dividends since it was organized in 1975, and although there is no legal restriction impairing the right of the Company to pay dividends, the Company does not intend to pay dividends in the foreseeable future. The Company selects to invest its available working capital to enhance the facilities at the Resort.
d. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The Company does not currently have securities authorized for issuance under equity compensation plans.
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e. RECENT SALES OF UNREGISTERED SECURITIES: USE OF PROCEEDS FROM REGISTERED SECURITIES The Company does not have sales of unregistered securities.
f. COMPANY PURCHASES OF EQUITY SECURITIES The Company redeemed 10 shares of Common stock from a single shareholder in the second quarter of fiscal year 2008 for $280,000. In addition, the Company redeemed one share of Common stock from a single shareholder in the fourth quarter of fiscal year 2010 for $28,500. At this time the stock has not been retired.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following analysis discusses the Company's financial condition as of September 30, 2010, compared with September 30. 2009. The discussion should be read in conjunction with the audited consolidated financial statement and the related notes to the financial statement and the other financial information included elsewhere in this Form 10-K.
Certain information included herein contains statements that may be considered forward-looking statements, such as statements relating to anticipated expenses, capital spending and financing sources. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. These risks and uncertainties include, but are not limited to, those relating to competitive industry conditions, California tourism and weather conditions, dependence on existing management, leverage and debt service, the regulation of the recreational vehicle industry, domestic or global economic conditions and changes in federal or state tax laws or the administration of such laws.
OVERVIEW Pismo Coast Village, Inc. operates as a 400 space recreational vehicle resort. The Corporation includes additional business operations to provide its users with a full range of services expected of a recreational resort. These services include a store, video arcade, Laundromat, recreational vehicle repair, RV parts shop and an RV storage operation.
The Corporation is authorized to issue 1,800 shares, of one class, all with equal voting rights and all being without par value. Transfers of shares are restricted by Company bylaws. One such restriction is that transferees must acquire shares with intent to hold the same for the purpose of enjoying camping rights and other benefits to which a shareholder is entitled. Each share of stock is intended to provide the shareholder with the opportunity for 45 nights of free site use per year. However, if the Corporation is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.
Management is charged with the task of developing sufficient funds to operate the Resort through site sales to general public guests by allocating a minimum of 175 sites to general public use and allocating a maximum of 225 sites for shareholder free use. The other service centers are expected to generate sufficient revenue to support themselves and/or produce a profit.
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The Company continues to promote and depend upon recreational vehicle camping as the primary source of revenue. The rental of campsites to the general public provides income to cover expenses, complete capital improvements, and allow shareholders up to forty-five free nights camping annually. Additional revenues come from RV storage and spotting, RV service and repair, on-site convenience store, and other ancillary activities such as laundromat, arcade, and bike rental.
The Company has been fortunate not to have significant impact due to the current economy. The RVing public actively seeks accommodations on the Central Coast despite volatile fuel prices and personal financial uncertainties. RVing offers an affordable outdoor recreational experience, and the Company provides quality facilities and services in a highly popular location. Site occupancy for fiscal year 2010 was down slightly due to weather and impact of economy related issues. Occupancy projections look equal to last year at the beginning of fiscal year 2011. Revenues from ancillary operations such as the General Store, arcade, and bike rental, with the exception of RV service and laundromat, are flat to slightly down at year end. Management feels any significant revenue downturn is directly related to the economy, and this trend will continue well into fiscal year 2011.
RV storage continues to provide a significant portion of the Company's revenue. RV storage provides numerous benefits to the customer including: no stress of towing, no need to own a tow vehicle, use of RV by multiple family members, and convenience.
After years with no debt, the Board of Directors approved expansion of the RV storage program and understood this investment would require substantial financing. Management has made it a high priority to affect timely construction and successful marketing in order to maximize return on this investment.
Ongoing investment in resort improvements has assured resort guests and shareholders a top quality, up-to-date facility. This quality and pride of ownership was evident when the National Association of RV Parks and Campgrounds Park of the Year was awarded to the resort for 2007-08. In addition, in 2008 the resort was the only industry rated "A" park in California for customer satisfaction based on internet visitor surveys collected nationally by Guest Reviews.
The Company's commitment to quality, value, and enjoyment, is underscored by the business's success due to word of mouth and referrals from guests. In addition, investment for online marketing, ads in the two leading national directories, and trade magazine advertising formulates most of the business marketing plan.
CURRENT OPERATING PLANS The Board of Directors continues its previously established policy by adopting a stringent conservative budget for fiscal year 2011, which projects a positive cash flow of approximately $1,126,938 from operations. This projection is based on paid site occupancy remaining even with fiscal year 2010 and receiving new storage customers at a moderate rate. While the Company projects a positive cash flow, this cannot be assured for fiscal year 2011.
FINANCIAL CONDITION The business of the Company is seasonal and is concentrated on prime days of the year which are defined as follows: President's Day Weekend, Easter week, Memorial Day Weekend, summer vacation months, Labor Day, Thanksgiving Weekend, and Christmas vacation. There are no known trends which affect business or affect revenue.
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The Company develops its income from two sources: (a) Resort Operations, consisting of revenues generated from RV site rentals, from RV storage space operations, and from lease revenues from Laundromat and arcade operations by third party lessees; and (b) Retail Operations, consisting of revenues from general store operations and from RV parts and service operations.
The Company has arranged a $500,000 line of credit that is currently not drawn on. Besides the financing referenced in the previous paragraph, the Company has no other liabilities to creditors other than current accounts payable arising from its normal day-to-day operations and advance Resort rental reservation deposits, none of which are in arrears.
LIQUIDITY The Company's policy is to use its ability to generate operating cash flow to meet its expected future needs for internal growth. The Company has continued to maintain sufficient cash so as to not require the use of a short-term line of credit during the off-season period, and the Company expects to be able to do so (although no assurance of continued cash flow can be given).
Net cash provided by operating activities totaled $789,041 in 2010, compared to $1,257,629 in 2009, due to decreased net income, increased depreciation, decrease in deferred income tax, and decrease in prepaid income taxes.
During fiscal year 2010, cash investments of $605,563 included developing twenty acres into RV storage, a new trailer towing truck, and hardware for upgrading the resort's Wi-fi system. During fiscal year 2009, cash investments of $884,275 included upgrading 51 campsites, renovating the pool facility, upgrading the switchgear for incoming electric, and road paving. As of September 30, 2010, the Company carried a debt of $4,636,645 as a result of acquiring the three RV storage properties.
With the possibility of requiring additional funds for planned capital improvements and the winter season, the Company maintains a $500,000 Line of Credit to insure funds will be available if required. In anticipation of future large projects, the Board of Directors has instructed management to build operational cash balances.
Fiscal year 2010's current ratio (current assets to current liabilities) of 1.58 increased from fiscal year 2009's current ratio of 1.51. The increase in current ratio is the result of an increase in cash and cash equivalents, and a decrease in accounts payable and accrued liabilities, a decrease in accrued salaries and vacations, and a decrease in income taxes payable.
Working Capital increased to $727,896 at the end of fiscal year 2010, compared with $665,001 at year end fiscal year 2009. This increase is primarily a result of increased cash and cash equivalents, and a decrease in accounts payable.
CAPITAL RESOURCES AND PLANNED EXPENDITURES The Company plans capital expenditures up to $526,000 in fiscal year 2011 to further enhance the Resort facilities and services. This would include site renovation for 27 sites, road paving on the resort, and a two-door freezer in the General Store. Funding for these projects is expected to be from normal operating cash flows and, if necessary, supplemented with outside financing. These capital expenditures are expected to increase the Resort's value to its shareholders and the general public.
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RESULTS OF OPERATIONS
YEAR TO YEAR COMPARISON
Revenue: Operating revenue, interest and other income decreased below the prior fiscal year ended September 30, 2009, by $51,210, or 0.87%.
Occupancy rates on the previous table are calculated based on the quantity occupied as compared to the total sites available for occupancy (i.e., total occupied to number of total available). Average paid site is based on site revenue and paid sites. Resort support operations include revenues received from the arcade, Laundromat, recreational activities, and other less significant sources.
2010 COMPARED WITH 2009 Resort operations income decreased $40,312, or 0.85%, primarily due to RV storage and spotting activity decreasing $42,110, or 3.6%, below the previous year. While paid site occupancy was down 3.2%, site revenue was up 0.07% due to rate increases.
The decrease in RV storage activity is a reflection of decreased shareholder and general public occupancy and the impact on trailer spotting. RV Storage revenue was down due to restructuring the storage lots and the loss of storage customers due to the economy. Occupancy projections for site rental and RV storage continue to look flat well into 2011.
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Retail operations income decreased $57,798, or 5.2%, due to a $61,832, or 9.0%, decrease in the General Store business. Additionally, the RV Service operation increased $4,033, or 0.95%, above the previous year. Management feels this decrease in retail activity is a reflection on the current economy and resort visitors are more selective on purchases. In an effort to maximize revenue, management continues to stock more appropriate items, more effectively merchandise, and pay greater attention to customer service.
Interest and Other Income increased $64,687, or 474%, above the previous year as a result of selling a small parcel of storage property after a lot line adjustment, and interest on increasing cash and cash equivalents. Reserves are maintained in preparation for capital expenditure projects to improve the Resort's facilities and services.
Operating Expenses increased $72,498, or 1.9%, as a result of employee insurance benefits, workers' compensation, property taxes, vehicle expense, and utilities. Due to increasing medical and workers' compensation insurance expense, management reduced labor 2.8% below the previous year by initiating a wage freeze affecting all employees.
Maintaining a conservative approach, most expense items were managed well below Plan and in many categories below the previous year. The Board of Directors has directed management to continue maintenance projects as needed to provide a first class resort for campers using recreational vehicles.
Interest Expense decreased from $264,511 in fiscal year 2009 to $261,122 in 2010. This 1.3% decrease was due to interest adjustments on financing the RV storage properties.
Income before provision for income taxes of $947,019, a 11.7% decrease below last year, is reflective of the Company's decrease in resort operations and retail operations income, increase in operating expenses, and increased depreciation.
Net income of $513,393 for fiscal year 2010 shows a decrease of $79,092, or 13.3%, below a net income of $592,485 the previous year. This decrease in net income is a reflection of decreased income, and increased operating expenses including depreciation.
INFLATION has not had a significant impact on our profit position. The Company has increased rates which have more than compensated for the rate of inflation.
FUTURE OPERATING RESULTS could be unfavorably impacted to the extent that changing prices result in lower discretionary income for customers and/or increased transportation costs to the Resort. In addition, increasing prices affects operations and liquidity by raising the replacement cost of property and equipment.
FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS: A number of factors, many of which are common to the lodging industry and beyond our control, could affect our business, including the following:
* increased gas prices;
* increased competition from other resorts in our market;
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* increases in operating costs due to inflation, labor costs, workers' compensation and healthcare related costs, utility costs, insurance and unanticipated costs such as acts of nature and their consequences and other factors that may not be offset by increased rates;
* changes in interest rates and in the availability, cost and terms of debt financing;
* changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
* adverse effects of market conditions, which may diminish the desire for leisure travel; and
* adverse effects of a downturn in the leisure industry.
The leisure and travel business is seasonal and seasonal variations in revenue at our resort can be expected to cause quarterly fluctuations in our revenue.
Our revenue is generally highest in the third and fourth quarters. Quarterly revenue also may be harmed by events beyond our control, such as extreme weather conditions, terrorist attacks or alerts, contagious diseases, economic factors and other considerations affecting travel. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, we have to rely on our short-term line of credit for operations.
In the recent past, events beyond our control, including an economic slowdown and terrorism, harmed the operating performance of the leisure industry generally, and if these or similar events occur again, our operating and financial results may be harmed by declines in average daily rates or occupancy.
Carrying our outstanding debt may harm our business and financial results by:
* requiring us to use a substantial portion of our funds from operations to make required payments on principal and interest, which will reduce the amount of cash available to us for our operations and capital expenditures, future business opportunities and other purposes;
* making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions;
* limiting our ability to borrow more money for operations, capital expenditures or to finance acquisitions in the future; and
* requiring us to sell one or more properties, possibly on disadvantageous terms, in order to make required payments of interest and principal.
Our resort has a need for ongoing renovations and potentially significant capital expenditures in connection with improvements, and the costs of such renovations or improvements may exceed our expectations.
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Occupancy and the rates we are able to charge are often affected by the maintenance and capital improvements at a resort, especially in the event that the maintenance of improvements are not completed on schedule, or if the improvements result in the closure of the General Store or a significant number of sites. The costs of capital expenditures we need to make could harm our financial condition and reduce amounts available for operations. These capital improvements may also give rise to additional risks including:
* construction cost overruns and delays;
* a possible shortage of available cash to fund capital improvements and the related possibility that financing of these expenditures may not be available to us on favorable terms;
* uncertainties as to market demand or a loss of market demand after capital improvements have begun;
* disruption in service and site availability causing reduced demand, occupancy, and rates; and
* possible environmental issues.
We rely on our executive officers, the loss of whom could significantly harm our business.
Our continued success will depend to a significant extent on the efforts and abilities of our C.E.O. and General Manager, Jay Jamison. Mr. Jamison is important to our business and strategy and to the extent that were he to depart and is not replaced with an experienced substitute, Mr. Jamison's departure could harm our operations, financial condition and operating results.
Uninsured and underinsured losses could harm our financial condition, and results of operations.
Various types of catastrophic issues, such as losses due to wars, terrorist acts, earthquakes, floods, pollution or environmental matters, generally are either uninsurable or not economically insurable, or may be subject to insurance coverage limitations, such as large deductibles or co-payments. Our resort is located on the coast of California, which has been historically at greater risk to certain acts of nature (such as severe storms, fires and earthquakes).
In the event of a catastrophic loss, our insurance coverage may not be sufficient to cover the full current market value or replacement cost of our lost properties. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in the resort, as well as the anticipated future revenue from the resort. In that event, we might nevertheless remain obligated for any notes payable or other financial obligations related to the property. Inflation, changes in building codes and ordinances, environmental considerations and other factors might also keep us from using insurance proceeds to replace or renovate the resort after it has been damaged or destroyed. Under these circumstances, the insurance proceeds we receive might be inadequate to restore our economic position on the damaged or destroyed property.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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REPORT OF INDEPENDENT REGISTERED -------------------------------- PUBLIC ACCOUNTING FIRM ----------------------
To the Board of Directors and Stockholders of Pismo Coast Village Inc. Pismo Beach, California
We have audited the accompanying balance sheets of Pismo Coast Village, Inc. (a California corporation) as of September 30, 2010 and 2009, and the related statements of income and retained earnings and cash flows for the years then ended. 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 the standards of the Public Company Accounting Oversight Board (United States). 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 Pismo Coast Village, Inc. as of September 30, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
BROWN ARMSTRONG ACCOUNTANCY CORPORATION
Bakersfield, California November 13, 2010
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The accompanying notes are an integral part of these financial statements.
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The accompanying notes are an integral part of these financial statements.
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The accompanying notes are an integral part of these financial statements.
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PISMO COAST VILLAGE, INC. ------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- SEPTEMBER 30, 2010 AND 2009 ---------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ---------------------------------------------------
A. Nature of Business ------------------
Pismo Coast Village, Inc. (Company) is a recreational vehicle camping resort. Its business is seasonal in nature with the fourth quarter, the summer, being its busiest and most profitable.
B. Inventory ---------
Inventory has been valued at the lower of cost or market on a first-in, first-out basis. Inventory is comprised primarily of goods in the general store and parts in the RV repair shop.
C. Depreciation and Amortization -----------------------------
Depreciation of property and equipment is computed using straight line method based on the cost of the assets, less allowance for salvage value, where appropriate. Depreciation rates are based upon the following estimated useful lives:
D. Earnings Per Share ------------------
The earnings per share are based on the 1,789 shares issued and outstanding. The financial statements report only basic earnings per share, as there are no potentially dilutive shares outstanding.
E. Cash and Cash Equivalents -------------------------
For purposes of the statements of cash flows, the Company considers all highly liquid investments including certificates of deposit with maturities of three months or less when purchased, to be cash equivalents.
F. Concentration of Credit Risk ----------------------------
At September 30, 2010, the Company had cash deposits in excess of the $250,000 federally insured limit with Santa Lucia Bank of $1,451,145; however, in the past the Company has used an Excess Deposit Insurance Bond which secures deposits up to $1,500,000. It has recently been stated by bank regulators that this insurance bond is not enforceable. The FDIC's Temporary Transaction Account Guarantee Program provides unlimited coverage for non-interest bearing accounts until December 31, 2013. Santa Lucia Bank is participating in the Temporary Liquidity Guarantee Program which is a requirement to obtain the non-interest bearing coverage.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) - ---------------------------------------------------------------
G. Use of Estimates ----------------
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
H. Revenue and Cost Recognition ----------------------------
The Company's revenue is recognized on the accrual basis as earned based on the date of stay. Expenditures are recorded on the accrual basis whereby expenses are recorded when incurred, rather than when paid.
I. Advertising -----------
The Company follows the policy of charging the costs of non-direct response advertising to expense as incurred. Advertising expense was $58,138 and $60,152 for the years ended September 30, 2010 and 2009, respectively.
J. Income Taxes ------------
The Company uses the asset and liability method of accounting for deferred income taxes. Deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities. Deferred tax assets or liabilities at the end of each period are determined using the tax rate in effect at that time. ASC Topic 740 requires that amounts recognized in the Balance Sheet related to uncertain tax positions be classified as a current or noncurrent liability, based upon the expected timing of the payment to a taxing authority. The Company had no material uncertain tax positions as of September 30, 2010 or 2009.
K New Accounting Pronouncements -----------------------------
"Standards Adopted":
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133, which changes the disclosure requirements for derivative instruments and hedging activities. Enhanced disclosures are required to provide information about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company does not expect the effects of this bulletin to have any affect on its financial statements. In accordance with FASB Accounting Standards Codification (ASC) effective for years ending after September 15, 2009, SFAS 161 is now FASB ASC 815.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) - ---------------------------------------------------------------
In May 2009, the Financial Accounting Standards Board (FASB) issued authoritative guidance, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. We implemented this guidance during the first quarter of fiscal 2010 and we expanded our disclosures accordingly. See Note 11 to these financial statements.
In June 2009, the FASB approved the FASB Accounting Standards Codification (ASC), which after its effective date of July 1, 2009 is the single source of authoritative, nongovernmental U.S. Generally Accepted Accounting Principles (GAAP). The Codification reorganizes all previous U.S. GAAP pronouncements into roughly 90 accounting topics and displays all topics using a consistent structure. All existing standards that were used to create the Codification are now superseded, replacing the previous references to specific Statements of Financial Accounting Standards (SFAS) with numbers used in the Codification's structural organization. The adoption of this authoritative guidance did not have a material impact on our financial statements. We have updated our disclosures accordingly.
In January 2010, the FASB issued Accounting Standards Update (ASU) No. 2010-06 "Improving Disclosures about Fair Value Measurements." The ASU amends previously issued authoritative guidance and requires new disclosures and clarifies existing disclosures and is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. As this requires only additional disclosures, the guidance will have no impact on the Company's financial position or results of operations.
NOTE 2 - PISMO COAST VILLAGE RECREATIONAL VEHICLE RESORT AND RELATED ASSETS - ---------------------------------------------------------------------------
At September 30, 2010 and 2009, property and equipment included the following:
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 3 - LINE OF CREDIT - -----------------------
The Company has a revolving line of credit for $500,000 with Santa Lucia Bank, expiring March 2011. The interest rate is variable at one percent over West Coast Prime with an initial rate of 6.00 percent at September 30, 2010. The purpose of the line of credit is to augment operating cash needs in off-season months. There were no outstanding amounts as of September 30, 2010 or 2009.
NOTE 4 - NOTE PAYABLE - ---------------------
The Company secured permanent financing on the purchase of storage lot land in Arroyo Grande with Santa Lucia Bank. The loan was refinanced on April 6, 2006 and consolidated with a note for the purchase of another storage lot in Oceano, California. The total loan currently outstanding is $1,752,389, and was financed over a period of ten years at a variable interest rate currently at 5.00%. The lot in Oceano was formerly leased for $4,800 per month and was purchased for $925,000. The payments are currently $12,760 per month interest and principal. The Company also secured permanent financing on the purchase of another storage lot in Arroyo Grande, California with Santa Lucia Bank. The loan originated on May 8, 2008. The total loan currently outstanding is $2,884,062 and financed over a period of ten years at a variable interest rate currently at 5.5%. The payments are currently $16,566 per month interest and principal. The Company secured a vehicle lease with Donahue Transportation Services Corp on a 2008 Tow Truck. The loan originated on December 9, 2009. The total loan currently outstanding is $48,551 and financed over a period of even years at an interest rate of 8.39%. The payments are currently $799 per month interest and principal.
Principal payments of the note payable are as follows:
NOTE 5 - FAIR VALUE MEASUREMENTS - --------------------------------
The authoritative guidance for fair value measurements establishes a three- tier fair value hierarchy, which prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as unadjusted quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for use when little or no market data exists, therefore requiring an entity to develop its own assumptions.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 5 - FAIR VALUE MEASUREMENTS (Continued) - --------------------------------------------
The Company's financial instruments consist primarily of cash and cash equivalents, marketable securities, trade receivables, and accounts payable. The fair values of cash and cash equivalents, trade receivables, and accounts payable approximate their carrying values due to the short-term nature of these instruments.
Fair values of assets and liabilities measured on a recurring basis at September 30, 2010 and 2009 are as follows:
NOTE 6 - COMMON STOCK - ---------------------
Each share of stock is intended to provide the shareholder with a maximum free use of the park for 45 days per year. If the Company is unable to generate sufficient funds from the public, the Company may be required to charge shareholders for services.
A shareholder is entitled to a pro rata share of any dividends as well as a pro rata share of the assets of the Company in the event of its liquidation or sale. The shares are personal property and do not constitute an interest in real property. The ownership of a share does not entitle the owner to any interest in any particular site or camping period.
The Company redeemed one share of Common stock from a single shareholder in the current year for $28,500. At this time the stock has not been retired.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 7- INCOME TAXES - --------------------
The provision for income taxes is as follows:
The deferred tax assets (liabilities) are comprised of the following:
The deferred tax assets (liabilities) consist of the following temporary differences:
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 7 - INCOME TAXES (Continued) - ---------------------------------
The effective income tax rate varies from the statutory federal income tax rate as follows:
The Company uses the asset-liability method of computing deferred taxes in accordance with FASB Accounting Standards Codification (ASC) Topic 740 (previously Statement of Financial Accounting Standard No. 109, "Accounting for Income Taxes"). The difference between the effective tax rate and the statutory tax rates is due primarily to the effects of the graduated tax rates, state taxes net of the federal tax benefit and nondeductible variable costs of shareholder usage.
ASC Topic 740 requires, among other things, the recognition and measurement of tax positions based on a "more likely than not" (likelihood greater than 50%) approach. As of September 30, 2010, the Company did not maintain any tax positions that did not meet the "more likely than not" threshold and, accordingly, all tax positions have been fully recorded in the provision for income taxes. It is the policy of the Company to consistently classify interest and penalties associated with income tax expense separately from the provision for income taxes. No interest or penalties associated with income taxes have been included in this calculation, or separately in the Statement of Operations and Retained Earnings, and no significant increases or decreases are expected within the following twelve-month period. Although the Company does not maintain any uncertain tax positions, tax returns generally remain subject to examination by the Internal Revenue Service for fiscal years ending on or after September 30, 2007 and by the California Franchise Tax Board for fiscal years ending on or after September 30, 2006.
NOTE 8 - OPERATING LEASES - -------------------------
The Company leases two pieces of property to use as storage lots. One is leased under a seven-year agreement beginning March 1, 2007 for $4,802 based on the Consumer Price Index.
The second lot is located in Oceano, California and is leased at $2,933 per month. The lease has converted to a month-to-month lease; however, the lessor is considering a long-term renewal at this time.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 8 - OPERATING LEASES (Continued) - -------------------------------------
The Company has a five-year lease obligation for a copier. Rental expense under this operating lease is $432 per month.
Future minimum lease payments under the second property lease and the obligation to lease equipment are as follows:
Rent expense under these agreements was $94,558 and $94,511 for the years ended September 30, 2010 and 2009, respectively.
NOTE 9 - EMPLOYEE RETIREMENT PLANS - ----------------------------------
The Company is the sponsor of a 401(k) profit sharing pension plan, which covers substantially all full-time employees. Employer contributions are discretionary and are determined on an annual basis. The contribution to the pension plan, for the years ended September 30, 2010 and 2009, is $54,215 and $48,021, respectively.
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PISMO COAST VILLAGE, INC. - ------------------------- NOTES TO FINANCIAL STATEMENTS - ----------------------------- SEPTEMBER 30, 2010 AND 2009 - ---------------------------- ------
NOTE 10 - OPERATING EXPENSES - ----------------------------
Operating expenses for the years ended September 30, 2010 and 2009 consisted of the following:
NOTE 11 - SUBSEQUENT EVENTS - --------------------------- The Company evaluates subsequent events through the date the financial statements are issued, which for the year ended September 30, 2010 is November 13, 2010. No material subsequent events were identified during this period.
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INDEPENDENT AUDITOR'S REPORT ---------------------------- ON ADDITIONAL INFORMATION -------------------------
To the Board of Directors and Stockholders of Pismo Coast Village, Inc. Pismo Beach, California
Our report on our audits of the basic financial statements of Pismo Coast Village, Inc. as of September 30, 2010 and 2009 appears on page 3. Those audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The statements of income (unaudited) for the three months ended September 30, 2010 and 2009 are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audits of the basic financial statements, and accordingly, we express no opinion on it.
BROWN ARMSTRONG ACCOUNTANCY CORPORATION
Bakersfield, California November 13, 2010
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ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
ITEM 9A(T).
ITEM 9A(T). CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, under the direction of our Chief Executive Officer and Chief Financial Officer (who is our principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of September 30, 2010 (the end of the period covered by this report). Based on that evaluation, our principal executive officer and our principal accounting officer concluded that these disclosure controls and procedures were effective as of such date.
INTERNAL CONTROL OVER FINANCIAL REPORTING Our management is also responsible for establishing internal control over financial reporting ("ICFR") as defined in Rules 13a-I5(f) and 15(d)-15(f) under the 1934 Act. Our ICFR are intended to be designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our ICFR are expected to include those policies and procedures that management believes are necessary that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and our directors; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect of financial statement preparation and may not prevent or detect misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.
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As of September 30, 2010, management assessed the effectiveness of the Company's internal control over financial reporting (ICFR) based on the criteria for effective ICFR established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on conducting such assessments by smaller reporting companies and non-accelerated filers. Based on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures were effective as of September 30, 2010.
This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this Annual Report.
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B. OTHER INFORMATION Inapplicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
a. The Company's Directors were chosen at the Shareholder's Annual Meeting held January 16, 2010. The Directors serve for one year, or until their successors are elected. The names, ages, background and other information concerning the Directors, including other offices held by the Directors with the Company, are set forth below.
The following is a list of the Company's Directors and Executive Officers setting forth their functions and experience. There is no understanding or agreement under which the Directors hold office.
LOUIS BENEDICT, Director Age 83 Louis Benedict served in the U. S. Navy from 1944 to 1946, and again during the Korean War, from 1952 to 1953. He attended the University of Southern California, majoring in electrical engineering, and following that earned a B.S. degree in electrical engineering at the University of Colorado. Mr. Benedict was employed from 1957 to 1962 as a project engineering manager with Lockheed Missiles and Space, from 1962 to 1964 as a vice president with William A. Revelle Corporation, and from 1964 to 1966 as an engineering section manager with Lockheed Missiles and Space. From 1966 to 1975, he was employed as the director of subcontract administration with Litton Industries, from 1975 to 1994 as vice president of contract administration for Datametrics Corporation, and from 1994 until his retirement in 1998 as a consultant in the field of U. S. defense contracts administration. Mr. Benedict has served on the Board of Directors since November 2002.
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KURT BRITTAIN, Director and Vice President - Secretary Age 80 After his Marine Corps service, Mr. Brittain was employed for more than thirty-three years by Orange County, California, prior to his retirement in 1986. His background includes public works, flood control and manager of the county's harbors, beaches and parks system. He was in charge of three harbors, seven beaches and more than twenty-six parks, three of which were camping parks. He has completed extension courses in business administration, management, recreation and real estate. Mr. Brittain has been a member of the Board from March 1990 to July 1999 and from January 2002 to present, serving one year as Vice President - Administration and five years as Executive Vice President. He is currently serving a ninth year as Vice President - Secretary.
HARRY BUCHAKLIAN, Director Age 78 Harry Buchaklian has a B.A. degree from C.S.U.F. in industrial arts, and a secondary level teaching credential in laboratory electronics and small engine repair. His career included employment as an assistant manager with Western Auto Stores, electronics instructor at Fresno Technical College and technical supervisor for Sears Roebuck. He retired from Sears Roebuck in 1994. He has been a member of the Board from March 1981 to January 1992 and from September 1995 to present, serving one year as Executive Vice President, and as a chairman of the Policy and Audit Committees. Mr. Buchaklian is currently chairman of the Environmental, Health and Safety Advisory Committee.
RODNEY ENNS, Director Age 57 Rodney Enns has a B.S. in computer engineering from California State University, Fresno, and a secondary math teaching credential from the state of California. He was president, owned and operated, Ennsbrook Ent., an incorporated poultry enterprise, from 1975 to 1995. Mr. Enns then worked as an electrical engineer at Voltage Multiplers, Inc., and was promoted to senior engineer before leaving in August 2005. He is currently teaching high school mathematics at Mission Oak High School in Tulare, California. He has been a member of the Board of Directors since November 2007.
DOUGLAS EUDALY, Director Age 79 Douglas Eudaly has an associate of arts degree from Fresno City College in elementary education, and a bachelor's degree in elementary education from Fresno State College. He has done doctoral studies at Nova University in Ft. Lauderdale, Florida, and received a Ph.D. from Clayton Theological Institute in Clayton, California. He holds life teaching credentials for elementary and junior high schools, and administrative credentials for preschool through adult school. In 1991 Dr. Eudaly retired from the Fresno Unified School District with thirty-one years of service credit--the last five years as program director for the Disability Awareness Program. He was president of the Fresno Teachers' Association in 1970-1971, as well as chairman of the district's negotiating council and served one term as chief negotiator. He served three years as president of the board of directors for Friendship Center for the Blind, and as chairman of several advisory committees for food banks and other nonprofit organizations. He served more than three years as the deacon chairman at the Evangelical Free Church of Fresno. Dr. Eudaly has served on the Board since January 2002.
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WILLIAM FISCHER, Director Age 77 William (Bill) Fischer and his spouse Joy reside in Simi Valley. He served four years in the U. S. Air Force during the Korean War. He is a graduate of California State University, Northridge, with a B.S. degree in accounting. He worked in the aerospace, entertainment and public utility industries until 1969 when he was hired by Getty Oil Company's corporate office as an accounting supervisor. Texaco, Inc. acquired Getty Oil in 1985, and he was promoted to Manager of Benefits Plan's Accounting. Mr. Fischer was responsible for the Savings/Thrift, 401(k), and ESOP Plans administration until 1989 when he elected early retirement. He was a financial consultant to various companies until 2006. Mr. Fischer also was active in residential real estate from 1989 to 1997, and currently has an active real estate broker's license. He is a member of the Veterans of Foreign Wars, Elks, Moose, and Knights of Columbus organizations. He looks forward to contributing his financial background to the Board. Mr. Fischer has been on the Board since January 2002.
WAYNE HARDESTY, Director Age 76 Wayne Hardesty graduated from Arizona State University in 1955. He was commissioned an Ensign from the Naval Office Candidate School in Newport, Rhode Island in 1956, and was immediately assigned to the Navy Area Audit Office in Los Angeles for duty at U.S.C. and General Dynamics-Pomona. He entered civil service in 1959, and remained with the Audit Office until 1973, at which time he became a price analyst for the U. S. Air Force at Norton Air Force Base working on the Minuteman Project. Mr. Hardesty received his MBA from Southern Illinois University in 1980. He retired from civil service in 1988 and became self-employed, primarily in tax preparation for both individual and business returns. He became a licensed Enrolled Agent in 1989 and currently operates Hardesty Financial Services in Ontario, California. Mr. Hardesty has been a member of the Board since September 2008.
R. ELAINE HARRIS, Director Age 72 R. Elaine Harris retired in 1990 from Pacific Telephone with thirty-one year's service, starting in the business office, then advancing to facility administrator the last ten years of that time. She was active with the Jaycettes Club and has worked on several political campaigns. She is now enjoying retirement and feels very blessed serving on the Board since January 2000. She is looking forward to continuing serving the shareholders.
DENNIS HEARNE, Director Age 72 Dennis Hearne holds an A.A. degree in business administration from Hartnell Junior College. He served two years in the Navy. Prior to retirement, he was employed in a family agriculture business, L. A. Hearne Company, located in the Salinas Valley for thirty-seven years, and presently serves as the company's chairman of the board. Mr. Hearne has also served on the board of directors of the California Feed and Grain Association in Sacramento and the California Crop Improvement Association in Davis. He is a member of Knights of Columbus, serving as treasurer and financial secretary for fifteen years. Mr. Hearne is a volunteer fireman with more than thirty-five years service in King City, and is the fire department's treasurer. He has been a member of the Board of Directors since September 2006.
GLENN HICKMAN, Director and Executive Vice President Age 77 Glenn Hickman has a B.A. in business and a secondary teaching credential from Fresno State University. His occupation prior to retirement in 1995 was as a financial analyst and office supervisor for Cal Resources, a subsidiary of Shell Oil Company. Mr. Hickman has been a member of the Board since July 1999 and is currently serving a ninth year as Executive Vice President.
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TERRIS HUGHES, Director Age 61 Terris (Terry) Hughes holds an A.A. degree from Bakersfield Junior College in police science. He was employed by Cal Resources LLC for twenty-three years, from 1973 to 1997, holding the position of senior training technician for the last ten years of that time. He is currently employed as an internal consultant for Aera Energy LLC, an oil industry company formed in 1997 between the Shell Oil and Mobil Oil Corporations. His duties are to serve as a behavior base safety advisor and provide safety training to Aera Energy LLC employees. Mr. Hughes has been a member of the Board since January 1996 and served one year as Vice President - Policy.
GARRY NELSON, Director Age 60 Garry Nelson is the President and General Manager of Vintage Nurseries, which specializes in grapevines and pomegranates. A graduate of Cal Poly San Luis Obispo, Mr. Nelson has been involved in agriculture for more than thirty-six years. Prior to his employment at Vintage Nurseries, he was vice president and chief operating officer for Belridge Farms for many years. Mr. Nelson has served on the Shafter City Council for the past seventeen years, serving as mayor for six of those years, and was recently reelected for a fifth four-year term. He has also served on the board of Bakersfield Memorial Hospital Foundation and on numerous agricultural industry boards. Mr. Nelson has served on the Board since November 2008.
RONALD NUNLIST, Director and Vice President - Operations Age 72 Ronald Nunlist was employed in the oil business for many years. From 1995 to 1997, he was employed as an operations foreman by Cal Resources LLC, an oil industry company owned by Shell Oil Corporation. From 1997 until his retirement in 1999, Mr. Nunlist was employed as a logistics specialist by Aera Energy LLC, an oil industry company formed between the Shell Oil and Mobil Oil Corporations. Mr. Nunlist presently serves as a planning commissioner for the City of Shafter, California. He has been a member of the Board since January 1986, serving five years as President, and is currently serving a ninth year as Vice President - Operations.
GEORGE PAPPI, JR., Director Age 48 Mr. Pappi's current occupation is as a fire claims representative for State Farm Insurance. Other positions held during his twenty years of employment with State Farm Insurance include office manager, property and bodily injury adjustor, fire and casualty (with extensive construction background), risk management and commercial insurance. He graduated from Cal Poly Pomona with a B.S. in management and human resources. He resides in La Verne, California, and is actively involved in local community and church activities and the United Way organization. Mr. Pappi has been a member of the Board of Directors since January 2004.
JERALD PETTIBONE, Director and President Age 84 Jerry Pettibone sold and retired from his company, Pettibone Signs, in Santa Cruz in 1988. He started the company which operated statewide in 1960. Active in trade associations, he served on the board of directors of the National Electric Sign Association, and on the board of directors of the World Sign Association, serving as national president in 1985 and 1986. He served on the board of directors of the California Electric Sign Association for twenty-two years and was elected a director emeritus. He has been a member of the Board since January 1993, including three years as Chief Financial Officer, and is currently serving a fourteenth year as President.
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DWIGHT PLUMLEY, Director Age 57 Dwight Plumley attended College of the Sequoias studying electronic engineering and construction real estate. In 1973, he started in the produce equipment industry working for Packers Manufacturing Inc. as a service and installation supervisor. In 1979, he became employed by Pennwalt Corporation, an international equipment producer, as a project manager and supervisor. Mr. Plumley purchased Packers Manufacturing Inc. in 1987, and, as President, produces fruit and vegetable packing and processing systems, from small to multimillion dollar projects, nationwide and internationally. He has also served on the board of directors for Yosemite Bible Camp, a 60-acre facility for up to 350 campers and staff from 1994 to 2006, and served as church Deacon from 1984 to 2004. Mr. Plumley has been a member of the Board of Directors since January 2010.
GARY WILLEMS, Director Age 56 Gary Willems holds a B.A. degree in music education and a California life teaching credential from Fresno Pacific University. Since July 1, 2007, Mr. Willems has been employed as the Visual and Performing Arts Coordinator and also is the Administrator at the Dunlap Leadership Academy Charter School (an on-line High School) at Kings Canyon Unified School District. Prior to that, he was a Band Director for thirty years in the Dinuba/Reedley area, and was also Head Marching Band Director of the Reedley High School Band from 1985 to 2007. He is an active member of the California Band Directors' Association and is the past president of Fresno and Madera counties' Music Educators' Association. Mr. Willems has served on the Board of Directors since January 2001.
JACK WILLIAMS, Director, Chief Financial Officer and Vice President - Finance Age 60 Mr. Williams graduated from San Diego State University in 1974 with a B.S. in accounting. Following that, he has been employed in the field of accounting in a variety of industries, including agriculture, construction, heavy equipment sales, and manufacturing. He was employed as a financial analyst by Texaco Oil Corporation in the Bakersfield area from 1997 until 1999, and as Chief Financial Officer for Goodwill Industries of South-Central California from March 2000 to November 2004. Mr. Williams was an interim-controller for Diversified Utilities Services, a position he held from April 2005 to December 2005. He established his own C.P.A. practice in 1983, which he continues to own and operate. Mr. Williams has been a member of the Board since January 1995, and is currently serving a fourteenth year as Chief Financial Officer and Vice President - Finance.
b. OTHER OFFICERS AND SIGNIFICANT EMPLOYEES JAY JAMISON, Chief Executive Officer/General Manager and Assistant Corporate Secretary Age 57 Jay Jamison has been employed by the Company since June 1997 as General Manager and serves as Assistant Corporate Secretary. In March 2007, the Board changed his title to Chief Executive Officer/General Manager. He has a B.S. degree in Agricultural Management from Cal Poly San Luis Obispo, graduating in 1976. Mr. Jamison was raised on his family's guest ranch, Rancho Oso, in Santa Barbara County, which included a recreational vehicle park, resident summer camp, equestrian facilities and numerous resort amenities. He worked on the ranch throughout his childhood and after college. The family business was sold in 1983, at which time Mr. Jamison was hired by Thousand Trails, Inc., a private membership resort, as a Resort Operations Manager. His last ten years at Thousand Trails were spent managing a 200-acre, 518-site, full-service resort near Hollister, California. He also managed Thousand Trails resorts in Acton and Idyllwild in Southern California. Prior to his employment with the Company, Mr. Jamison was a General Manager with Skycrest Enterprises in
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Redding and managed Sugarloaf Marina and Resort on Lake Shasta in Northern California between January 1995 and June 1997. He is a member of the Resort and Commercial Recreation Association and is also a member of the American Quarter Horse Association. Mr. Jamison was appointed to and has served as a commissioner on the Pismo Beach Conference and Visitors Bureau since February 1998, including serving as Chair from August 1999 until February 2009. At the National Association of RV Parks and Campground's Annual Convention in November 1999, Mr. Jamison was appointed to the ARVC Board of Directors representing the ten western states. At the 2001 Annual Convention, he was elected Treasurer of the National Association, a position he held until he termed out December 2005. In June of 2002, Mr. Jamison was installed as a Director on the Board for the San Luis Obispo County Chapter of the American Red Cross, and served as Board Chairman from June 2006 until July 2008; he still remains on the Board. In February 2006, Mr. Jamison was elected to serve as a commissioner on the California Travel and Tourism Commission, which markets California to potential domestic and international visitors, a position he still holds.
c. FAMILY RELATIONSHIPS There are no familial relationships between the Directors nor between the Directors and the Officers.
d. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS To the knowledge of the Company, none of the officers or directors have been personally involved in any bankruptcy or insolvency proceedings. To the knowledge of the Company, none of the directors or officers have been convicted in any criminal proceedings (excluding traffic violations and other minor offenses) or are the subject of a criminal proceeding which is presently pending, nor have such persons been the subject of any order, judgment, or decree of any court of competent jurisdiction, permanently or temporarily enjoining them from acting as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director or insurance company, or from engaging in or continuing in any conduct or practice in connection with any such activity or in connection with the purchase or sale of any security, nor were any of such persons the subject of a federal or state authority barring or suspending, for more than 60 days, the right of such person to be engaged in any such activity, which order has not been reversed or suspended.
e. AUDIT COMMITTEE FINANCIAL EXPERT Our Board of Directors has determined that it does not have a member of its audit committee that qualifies as an "audit committee financial expert" as defined in Item 401(e) of Regulation S-B, and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We believe that the members of our Audit Committee are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Due to the fact that the directors of Pismo Coast Village do not receive compensation for the services they provide in that capacity, the Company has been unable to nominate and retain a director with the required expertise to stand for election to the Board of Directors. However, until the time that our Audit Committee has a qualified audit committee financial expert, we believe our engagement of Glenn, Burdette, Phillips, and Bryson (GBPB), Certified Public Accountants, satisfies this requirement. GBPB provides the Company's quarterly compilation of the balance sheets and the related statements of operations, and retained earnings, and cash flows in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.
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f. CODE OF ETHICS On November 8, 2003, the Company's board of directors adopted the introduction to our code of ethical conduct. After further review, consideration was given to adopting a more comprehensive and detailed Code. At the meeting of the Executive Committee held June 19, 2009, the committee approved a recommendation to present a revised Code of Ethics to the full board for adoption. At the Board of Director's meeting held July 18, 2009, the Board unanimously approved the revised and complete Code of Ethics that applies to all the Company's employees and directors, including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions.
The complete text of the revised Code of Ethics is filed with this Form 10-K as Exhibit 14. In addition, the Company has posted the Code of Ethics on its website, www.pismocoastvillage.com.
g. SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities within specified time periods to file certain reports of ownership and changes in ownership with the SEC. The Company is not aware of any failure to file reports or report transactions in a timely manner during the fiscal year ended September 30, 2010, by any director or officer.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information regarding compensation awarded, paid to, or earned by the chief executive officer of Pismo Coast Village, Inc. for the three years ended September 30, 2008, 2009 and 2010. No other person who is currently an executive officer or employee of Pismo Coast Village, Inc. earned salary and bonus compensation exceeding $100,000 during any of those years.
COMPENSATION DISCUSSION AND ANALYSIS The following Compensation Discussion and Analysis describes the material elements of compensation for the executive officer identified in the Summary Compensation Table contained above.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Personnel and Compensation/Benefits Committee consists of Glenn Hickman (Chairman), who is an executive officer of the Company serving as Executive Vice President; Kurt Brittain, who is an executive officer and serves as Vice President - Secretary; Terris Hughes, director of the Company; Jerald Pettibone, who is an executive officer and serves as President and Chairman of the Board; Gary Willems, director of the Company; and Jack Williams, who is an executive officer of the company and serves as Chief Financial Officer and Vice President - Finance. All of the members of the Personnel and Compensation/Benefits Committee during 2010 were non-employee directors. There are no other compensation committee interlocks between the Company and other entities involving the Company's executive officers.
COMPENSATION COMMITTEE REPORT The Personnel and Compensation/Benefits Committee of the Company's Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Securities and Exchange Commission Regulation S-K with management, and based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's 10-K report.
As more fully described below, the Personnel and Compensation/Benefits Committee, made up of members of the Board of Directors, reviews the total direct compensation programs for the CEO.
Notably the salary and other benefits payable to the named executive officer are set forth in an employment agreement which is discussed below.
The CEO reviews the base salary, annual bonus and long-term compensation levels for other employees of the Company. The Personnel and Compensation/Benefits Committee reviews and approves the compensation received by the CEO's direct reports. The entire Board of Directors remains responsible for significant changes to or adoption of new employee benefit plans.
a. CASH COMPENSATION PAYABLE TO OUR NAMED EXECUTIVE OFFICER The named executive officer receives a base salary payable in accordance with the company's normal payroll practices and pursuant to a contract between this officer and Pismo Coast Village, Inc. (which contract is described in more detail below). Based on knowledge of the industry and Pismo Coast Village, Inc. performance (including its earnings and stock price performance, and successful resort operations), the Board believes that the CEO's base salary is less than those that are received by comparable officers with comparable responsibilities in similar companies.
In the future, when reconsidering salaries for executives, the Board will do so by evaluating their responsibilities, experience and the competitive marketplace. More specifically, the Board expects to consider the following factors in determining the executive officers' base salaries:
* The executive's leadership and operational performance and potential to enhance long-term value to the Company's shareholders;
* Performance compared to the financial, operational and strategic goals established for the Company;
* The nature, scope and level of the executive's responsibilities;
* Competitive market compensation paid by other companies for similar positions, experience and performance levels; and
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* The executive's current salary, the appropriate balance between incentives for long-term and short-term performance.
b. STOCK OPTION PLAN BENEFITS Not applicable.
c. ELEMENTS OF "ALL OTHER COMPENSATION" The amounts reflected in the column labeled "other compensation" in the above Summary Compensation Table consist of compensation paid to the named executive officer from benefits received from our 401(k) plan.
The Company provides a 401(k) Safe Harbor Plan which was adopted effective October 1, 2005. All employees are eligible to participate in this Plan after one year of employment and work at least 1,000 hours per year and attained age 21. Employees are fully vested when their participation begins. The Company matches employee contributions up to 4% of compensation.
d. EMPLOYMENT AGREEMENT WITH OUR NAMED EXECUTIVE OFFICER The Company has entered into an employment agreement with the named executive officer. The material terms of this agreement is summarized as follows:
Mr. Jamison is the Chief Executive Officer/General Manager, Assistant Corporate Secretary. On October 1, 2008, the Company entered into an employment contract with Mr. Jamison. The Board of Directors extended this contract through September 30, 2013 and provided Mr. Jamison with a salary increase effective October 1, 2008. This currently provides for a salary of $132,672, plus health insurance, cost reimbursement, and certain other benefits.
Pismo Coast Village may also terminate the contract for cause, upon Mr. Jamison's death or disability, or without cause. If Pismo Coast Village terminates the contract for cause, it only must compensate Mr. Jamison through the date of termination. If Pismo Coast Village terminates the contract without cause, Pismo Coast Village must pay Mr. Jamison nine month's salary.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS GRANTED DURING THE LAST FISCAL YEAR Not applicable.
LONG TERM INCENTIVE PLANS Except as described in our 401(k) plan, the Company did not have a long-term incentive plan during the fiscal years ended September 30, 2010 or 2009.
REPORT ON RE-PRICING OF OPTIONS/SARS Not applicable.
COMPENSATION OF DIRECTORS During fiscal year 2010, none of the Company's directors received cash remuneration for their service. However, the directors are entitled to reimbursement for out-of-pocket costs and expenses incurred on behalf of the Company, and mileage reimbursement for travel to and from meetings upon request. Since this reimbursement is on a fully accountable basis, there is no portion treated as compensation. In addition, they are entitled to use of the Resort for attending meetings and are provided with food and refreshments in connection with Board Meetings. The aggregate value of the foregoing during the fiscal year ended September 30, 2010, was estimated at $24,518.
OPTIONS, WARRANTS OR RIGHTS The Company has no outstanding options, warrants or rights to purchase any of its securities.
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INDEBTEDNESS OF MANAGEMENT No member of management was indebted to the Company during it's last fiscal year.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS Not applicable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
a. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS No person owns beneficially of record more than 5% of the Company's securities.
b. SECURITY OWNERSHIP OF MANAGEMENT. The following sets forth the securities beneficially owned, directly, by all directors and officers as a group as of September 30, 2010:
*Amount of Ownership: All such shares are owned beneficially and of record, and there are no additional shares known to the Company for which the listed beneficial owner has the right to acquire beneficial ownership as specified in Rule 13D-3(d)(1) of the Exchange Act.
c. CHANGES IN CONTROL Not applicable.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE There have been no transactions during the past two years, or proposed transactions, to which the Company was or is to be a party, in which any of the officers, directors, nominees, named shareholders, or family members of any such persons, had or is to have a direct or indirect material interest, other than transactions where competitive bids determine the rates or charges involved, or where the amount involved does not exceed $120,000, or where the interest of the party arises solely from the ownership of securities of the Company and the party received no extra or special benefit that was not shared by all shareholders.
EMPLOYMENT AGREEMENTS See Item 10, Executive Compensation--Employment contracts and termination of employment and change in control arrangements, for a discussion of the current employment contracts between Pismo Coast Village and Mr. Jamison.
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OTHER ARRANGEMENTS During the fiscal years 2010 and 2009, Pismo Coast Village paid for various hospitality functions and for travel, lodging and hospitality expenses for spouses who occasionally accompanied directors when they were traveling on company business. Management believes that the expenditures were to Pismo Coast Village's benefit.
CERTAIN BUSINESS RELATIONSHIPS None.
(1)-(5) INDEBTEDNESS OF MANAGEMENT None.
TRANSACTIONS WITH PROMOTERS Not applicable.
DIRECTOR INDEPENDENCE Our board of directors consists of shareholders of the Resort and therefore are not considered to be "independent" as defined by Section 121A of the American Stock Exchange Listing Standards. The board considers all relevant facts and circumstances in its determination of independence of all members of the board (including any relationships set forth in this Form 10-K under the heading "Certain Related Person Transactions"). As disclosed above, the Audit Committee, the Nominating Committee and the Personnel and Compensation/Benefits Committee members are not considered to be independent.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The following table discloses the fees that the Company was billed for professional services rendered by its independent public accounting firm, Brown Armstrong Accountancy Corporation, in each of the last two fiscal years.
(1) Reflects fees billed for the audit of the Company's consolidated financial statements included in its Form 10-K and review of its quarterly reports on Form 10-Q.
(2) Reflects fees, if any, for consulting services related to financial accounting and reporting matters.
(3) Reflects fees billed for tax compliance, tax advice and preparation of the Company's federal tax return.
(4) Reflects fees, if any for other products or professional services not related to the audit of the Company's consolidated financial statements and review of its quarterly reports, or for tax services.
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(5) AUDIT COMMITTEE'S PREAPPROVAL POLICIES AND PROCEDURES For the fiscal years ending September 30, 2010 and September 30, 2009, all audit related services, tax services and other services were pre-approved by the Audit Committee, which concluded that the provision of such services by Brown Armstrong were compatible with the maintenance of that firm's independence in the conduct of its auditing function.
(6) No effort expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year was attributed to work performed by persons other than the accountant's full-time, permanent employees.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
EXHIBITS AND INDEX OF EXHIBITS
1. Financial Statements included in this Form 10-K Report:
Description Page - ---------------------------------------------------------------
Accountant's Report for 2010.................................16
Balance Sheets as of September 30, 2010 and 2009.............17
Statements of Income and Retained Earnings for the years ended September 30, 2010 and 2009.............18
Statements of Cash Flows for the years ended September 30, 2010 and 2009.............19
Notes to Financial Statements For the years ended September 30, 2010 and 2009.............20
Accountant's Report on Additional Information................29
Statements of Income (Unaudited) for the three months ended September 30, 2010 and 2009......30
2. Exhibits filed with this Form 10-K Report:
Exhibit No. Description of Exhibit ----------- -------------------------------------------------------------- 14 Code of Ethics
31.1 Certification of the President of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Executive Officer (principal executive officer) of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3 Certification of the Chief Financial Officer (principal financial officer and principal accounting officer) of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of
32.1 Certification of the President of the Company Pursuant to 18 U.S.C. Subsection 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
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32.2 Certification of the Chief Executive Officer (principal executive officer) of the Company pursuant to 18 U.S.C. Subsection 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
32.3 Certification of the Chief Financial Officer (principal financial officer and principal accounting officer) of the Company pursuant to 18 U.S.C. Subsection 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
REPORTS ON FORM 8-K Item 5.02 - DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS filed as an exhibit to Registrant's Form 8-K filed January 20, 2010 and incorporated herein by reference.
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SIGNATURES ----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PISMO COAST VILLAGE, INC.
By: /S/ JERALD PETTIBONE Date: NOVEMBER 13, 2010 Jerald Pettibone, President and Chairman of the Board
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.
By: /S/ JAY JAMISON Date: NOVEMBER 13, 2010 Jay Jamison, Chief Executive Officer, General Manager and Assistant Corporate Secretary (principal executive officer)
By: /S/ JACK WILLIAMS Date: NOVEMBER 13, 2010 Jack Williams, Chief Financial Officer, Vice President - Finance and Director (principal financial officer and principal accounting officer)
By: /S/ JERALD PETTIBONE Date: NOVEMBER 13, 2010 Jerald Pettibone, President and Chairman of the Board and Director
By: /S/ GLENN HICKMAN Date: NOVEMBER 13, 2010 Glenn Hickman, Executive Vice President and Director
By: /S/ KURT BRITTAIN Date: NOVEMBER 13, 2010 Kurt Brittain, Vice President - Secretary and Director
By: /S. RONALD NUNLIST Date: NOVEMBER 13, 2010 Ronald Nunlist, Vice President - Operations and Director
By: /S/ LOUIS BENEDICT Date: NOVEMBER 13, 2010 Louis Benedict, Director
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By: /S/ HARRY BUCHAKLIAN Date: NOVEMBER 13, 2010 Harry Buchaklian, Director
By: /S/ RODNEY ENNS Date: NOVEMBER 13, 2010 Rodney Enns, Director
By: /S/ DOUGLAS EUDALY Date: NOVEMBER 13, 2010 Douglas Eudaly, Director
By: /S/ WILLIAM FISCHER Date: NOVEMBER 13, 2010 William Fischer, Director
By: /S/ WAYNE HARDESTY Date: NOVEMBER 13, 2010 Wayne Hardesty, Director
By: /S/ R. ELAINE HARRIS Date: NOVEMBER 13, 2010 R. Elaine Harris, Director
By: /S/ DENNIS HEARNE Date: NOVEMBER 13, 2010 Dennis Hearne, Director
By: /S/ TERRIS HUGHES Date: NOVEMBER 13, 2010 Terris Hughes, Director
By: /S/ GARRY NELSON Date: NOVEMBER 13, 2010 Garry Nelson, Director
By: /S/ GEORGE PAPPI, JR. Date: NOVEMBER 13, 2010 George Pappi, Jr., Director
By: /S/ DWIGHT PLUMLEY Date: NOVEMBER 13, 2010 Dwight Plumley, Director
By: /S/ GARY WILLEMS Date: NOVEMBER 13, 2010 Gary Willems, Director
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