VERY HOT!!!!!! FYNI... this is why this stock is moving up...real company with real numbers: up over 100% today..get in while you can
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SEC FILING - EDGAR Online
More Info: Current Quote
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Recent Filings: | | Jun 1997 (Annual Rpt) | Mar 1998 (Qtrly Rpt)
More filings for FYNI available from EDGAR Online
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March 2, 1998
FORESTRY INTERNATIONAL INC (FYNI)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION OR PLAN OF
OPERATION.
Results of Operations
The first quarter ended March 31, 1997 saw results of the newly acquired subsidiary Dixieland Forest Products Incorporated in our results. As such, activity and sales were up considerably from the same period in 1996. The company continues to focus on diversification into a full spectrum of timber industry products and services. Specifically the company has targeted a chip mill operation in Louisiana which management feels will be a good synergistic fit with Dixieland's timber brokerage and purchasing expertise. The company is also considering a pole mill operation for inclusion in their asset base, which again would fit the vertical diversification parameters management has set as an objective going forward. Beyond these two projects, management continues to seek other acquisition opportunities and merger candidates in the forest products industry, and expects these activities to provide additional growth in the coming year.
Cash was used in the three months ended March 31, 1997 to pay accounts payable and accrued expenses in the amount of $303,145. The company also paid principal on notes payable in the amount of $ 1,213,446. and purchased property and equipment in the amount of $26,760. Depreciation and amortization expense was $ 46,059. The sale of the company's 1634 acre Dickson Plantation, in Hancock County, Georgia for $ 1.234 million resulted in a reduction of a $927,500 long term liability. The balance was applied to
an outstanding IRS account, reducing this liability to zero as well.
Revenues during the three months ended March 31, 1997 totaled $1,236,837, exclusively from Dixieland Forest Products compared to sales of $213,115 for the year ended March 1996. It is anticipated that the balance of fiscal 1997 will see a substantial increase in revenues as the full impact of the Dixieland acquisition takes hold. Net income for the quarter ended March 31, 1997 was a loss of $427,031 compared to a loss of $1,431,369 for the year ended March 31, 1996.
The cost of sales in the quarter increased to 1,090,775 compared to virtually zero as Dixieland's operations were consolidated into the company's operation. Operating expenses increased to 490,635 for the three month period ended March 31, 1997 compared to 304,529 for the year ended March 31, 1996.
There are no income taxes due for the quarter ended March 31, 1997. The company also owed approximately $63,303 to the Arizona State Commission, and is currently in discussion for a settlement schedule. Management believes a favorable arrangement will be worked out within the next few quarters.
Management believes that all or a portion of the principal amount of a note payable of approximately $930,000 may not be a legally valid obligation of the Company as a result of the Company's failure to receive consideration for the indebtedness incurred under prior management. The Company has been notified that Dylan Hutton, the party to whom the note has been made payable, has attempted to assign its obligations under the note in the process of liquidation and the Company has been contacted by various parties alleging to be holders of the obligation from the Company. The Company, at the present time, has not determined whether to contest the payment of the note or to affirmatively seek a declaratory judgement that no indebtedness is owing. Prior to taking any further action the Company intends to further
consult with counsel and, if possible, to negotiate a compro- mise
resolution with the parties who
are alleging that they are the holders of the
note.
Liquidity & Capital Resources
During the quarter ended March 31, 1997, the company's cash needs were met partially by internal cash flow from Dixieland, and partially from a working capital infusion of $314,356 from the previous sale of restricted common stock.
As of March 31, 1997 the company owed approximately $40,000 in unpaid taxes, arising from penalties and interest from the company's 1993 and 1994 federal and state corporate tax return filings. This amount is down from the original amount of $382, 243, and management is currently working out a favorable payment schedule with the government. These taxes relate to the income which resulted in the sale of securities in fiscal 1993, and 1994, which had been the most significant source of liquidity to the company at that point. Currently management is lessening the company's dependency on the sale of securities for its capital requirements, and seeking alternate sources, such as institutional credit financing as well as internal cash flow.
As of March 31, 1997 the company owed $4,019,774 in short and long term debt to various parties which was evidenced by notes and capital lease payable. Management believes it will be successful in its efforts to repay long term debt out of operations, and refinancing, although there can be no assurances of this. Accounts payable decreased by $303,145 in the quarter.
Management also believes operating costs during fiscal 1997 should be met by internal cash flow and bank credit facilities, although there is no assurance of this. The company will not be able to expand its forestry operations without capital from outside sources, which have not been identified as of March 31, 1997.
Going forward management intends to considerably reduce the use of restricted stock sales as a method of providing for operating capital. Funds were last obtained during November 1996 from the sale of restricted stock and the acquisition of Dixieland Forest Products was completed in December 1996. Funds in the amount of $1,975,000 were raised and $1,125,000 in excess of the purchase price cash need of $850,000 was obtained to reduce debt and provide for operating capital.
GO FYNI
jim |
