U.S. SECURITIES ANDEXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-QSB

 

 

| {X}
QUARTERLY REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period endedJune 30, 2001

OR

{  }
TRANSITION REPORT PURSUANT TO      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________  to_________.

Commission File Number000-02290

 

EFFICIENCY LODGE,      INC.
(Exact name of      small business issuer as specified in its charter)
 

Georgia
58-0898219
(State or other      jurisdiction
(I.R.S. Employer
of incorporation      or organization)
Identification      No.)
 

5342 Old Floyd      Road, P. O. Box 635, Mableton, Georgia 30126
(Address of      principal executive offices)
 

(770) 819-0039
(issuer's      telephone number, including area code)
 

Check whether theissuer (1) filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the past 12 months (or for such shorterperiod that the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.

          Yes     /X/          No      /_/

 

Sharesoutstanding of each of the issuer's classes of common equity at June 30,2001: 216,970 shares of Common Stock, no par value.

Transitional Small Business disclosureFormat (check one).

         Yes/_/          No     /X/

 

 

**PART I. FINANCIAL INFORMATION**

**Item 1.          FinancialStatements.**

Efficiency Lodge, Inc.

CONSOLIDATED BALANCESHEETS

 ASSETS

June 30,
December 31,
2001
2000
(Unaudited)
Property and      equipment, net
$
25,530,753 
$
26,169,246 
Cash
1,711,660 
658,427 
Other assets
1,956,016 
2,039,150 
$
29,198,429 
$
28,866,823 
LIABILITIES AND      STOCKHOLDERS’ EQUITY   
Mortgage notes      payable
$
27,692,199 
$
28,305,021 
Other liabilities
935,731 
562,533 
Total      liabilities
28,627,930 
28,867,554    
Stockholders’      equity
Common      stock – no par value, 7,500,000
shares      authorized; 297,900 and 347,900 shares
issued      at June 30, 2001 and December 31,
2000,      respectively
240,216 
280,534 
Accumulated      earnings
1,128,921 
1,088,613 
Other      comprehensive gain
121,662 
119,000 
1,490,799 
1,488,147 
Less      80,930 and 130,930 shares of common
stock      in treasury at cost at June 30, 2001
and      December 31, 2000, respectively
(920,300)
(1,488,878)
570,499 
(731)
$
29,198,429 
$
28,866,823 
 

 

The accompanying notes arean integral part of these statements.

 

-2-

 

Efficiency Lodge, Inc.

CONSOLIDATED STATEMENTSOF EARNINGS(Unaudited)

For the quarters endedJune 30, 2001 and 2000For the six months ended June 30, 2001 and 2000

Quarter Ended        June 30,
Six Months Ended        June 30,
2001
2000
2001
2000
Revenues
$
2,224,862 
$
2,038,389 
$
4,454,821 
$
4,060,480 
Operating expenses
1,273,786 
1,207,027 
2,617,499 
2,341,753 
Operating        income
951,076 
831,362 
1,837,322 
1,718,727      
Other expense        (income)
Interest expense
631,147 
615,456 
1,263,748 
1,224,069 
Gain on sale of        investments
- 
- 
(200,110)
-
Other, net
(102,733)
(44,442)
(147,649)
(52,886)
528,414 
571,014 
915,989 
1,171,183   
Earnings        before income taxes
422,662
260,348 
921,333 
547,544   
Provision for        income taxes
161,940 
85,088 
352,765 
195,088  
Net        earnings
$
260,722 
$
175,260
$
568,568 
$
352,456  
Net earnings per        common share – basic
$
1.20 
$
0.90 
$
2.62 
$
1.86  
Weighted average        number of common
shares outstanding
216,970 
194,630 
216,970 
189,130 
 

 

The accompanying notes arean integral part of these statements.

-3-
 

 

 

Efficiency Lodge, Inc.

CONSOLIDATED STATEMENTOF STOCKHOLDERS' EQUITY(Unaudited)

Sixmonths endedJune 30, 2001
Common      Shares      OutstandingCommon      StockAccumulated      EarningsAccumulated      Other      Comprehensive      GainTreasury      StockTotalBalance      at December 31, 2000216,970       $   280,534         $   1,088,613    $       119,000  $(1,488,878)$      (731)     Cancellation      of 50,000 shares           of common stock in treasury      -             (40,318)        (528,260)        -       568,578       -      Net      earnings for the six months-       -568,568    - - 568,568     Other      comprehensive loss          Change in unrealized gain          on investments      -             -      -          2,662       -         2,662      Comprehensive      earnings-       --    - - 571,230     Balance      at June 30, 2001216,970       $  240,216    $     1,128,921   $       121,662 $   (920,300)$  570,499    
 

The accompanying notes are an integralpart of this statement.

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Efficiency Lodge, Inc.

CONSOLIDATED STATEMENTSOF CASH FLOWS(Unaudited)

For the six months endedJune 30, 2001 and 2000

 

  
2001 
2000   
Increase (decrease)      in cash         
Cash flows from      operating activities:    
Net earnings
$
568,568 
$
352,456 
Adjustments to      reconcile net earnings to net    
cash provided by      operating activities:    
Depreciation and      amortization 
585,852  
570,812 
Gain on sale of      fixed assets 
(94,349) 
(43,753)
Gain on sale of      investments 
(200,110) 
- 
Changes in assets      and liabilities:    
Other assets 
(123,767) 
6,897 
Other liabilities 
371,566  
(192,550)
Net cash provided by      operating activities 
1,107,760  
693,862      
Cash flows from      investing activities:    
Payments received on      notes receivable 
12,844  
- 
Purchases of      marketable securities 
(10,000) 
- 
Proceeds from sale      of investments 
377,933  
- 
Capital expenditures 
(113,631) 
(130,745)
Proceeds from sale      of fixed assets 
291,149  
112,000 
Net cash provided by      (used in) investing activities 
558,295  
(18,745)     
Cash flows from      financing activities:    
Payments for      purchase of treasury stock 
-  
(43,475)
Principal payments      on long-term debt 
(612,822) 
(346,123)
Net cash used in      financing activities 
(612,822) 
(389,598)     
Increase in cash and      cash equivalents 
1,053,233  
285,519      
Cash and cash      equivalents, beginning of period 
658,427  
237,091      
Cash and cash      equivalents, end of period
$
1,711,660 
$
522,610      
Cash paid during the      period for interest
$
1,199,448 
$
1,224,069      
Cash paid during the      period for income taxes
$
113,361 
$
195,088 
Supplemental Disclosure ofNon-Cash Financing Activities:On June 1, 2000, theCompany exchanged $499,950 of a note payable for 33,330 shares of common stock, which were previously heldin treasury.

 

The accompanying notes arean integral part of these statements.

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Efficiency Lodge, Inc.

NOTES TO INTERIMCONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Six months ended June30, 2001 and 2000

 

NOTE A – BASIS OFPREPARATION

The accompanyingunaudited interim consolidated financial statements of Efficiency Lodge, Inc.(the “Company”) have been prepared in accordance with accounting principlesgenerally accepted in the United States of America (“US GAAP”) for interimfinancial statements and with the rules and regulations of the Securities andExchange Commission. Accordingly, they do not include all of the information andfootnotes required by US GAAP for complete financial statements. In the opinionof management, all adjustments (consisting of normal recurring accruals)considered necessary for a fair presentation have been included.

The results ofoperations for the quarter ended June 30, 2001 are not necessarily indicative ofthe results that may be expected for the full year. The interim consolidatedfinancial statements should be read in conjunction with the Company’s 2000consolidated financial statements and related notes.

 

NOTE B – BASIC EARNINGSPER SHARE

Basic earnings pershare is computed using the weighted average number of shares of common stockoutstanding. During 2000, the Company completed a 10 for 1 stock split. Allreferences to common stock within the accompanying financial statements havebeen restated to reflect the effect of this stock split.

 

 

 

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**Item 2. Management’sDiscussion and Analysis**
Total assets increased$331,606 from $28,866,823 at December 31, 2000 to $29,198,429 at June 30, 2001.This increase was primarily due to net income for the six months ended June 30,2001 of $568,568 net of principal repayments on long-term debt of $612,822 andan increase in other liabilities of $373,198.

Revenue for the threemonths ended June 30, 2001 was $2,224,862 compared to $2,038,389 for the quarterended June 30, 2000, an increase of $186,473. Although room occupancy decreasedin the second quarter of 2001 due to the slowing economy, revenue increased overthe second quarter of 2000 due to the Austell lodge, which opened September 1,2000. Operating expenses for the three months ended June 30, 2001 totaled$1,273,786 compared to $1,207,027 for the three months ended June 30, 2000, anincrease of $66,759. This increase was primarily due to the opening of theAustell lodge and increased maintenance expenses.

During the second quarterof 2001, the Company purchased real estate and equipment totaling $30,167 andsold two houses for $197,606. The sale of the two houses generated a net gain of$67,206. During the second quarter of 2000, the Company sold one house for again of $43,753.

 

 

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SIGNATURES

 

In accordance with therequirements of the Exchange Act, the Registrant caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.

 

EFFICIENCY LODGE, INC.

 

DATE: August      14,      2001
By: * /s/      W. Ray Barnes* 
       W.      Ray Barnes 
      President      and Chief Executive Officer  
DATE: August 14,      2001
By:  */s/      Bonnie Byers* 
     Bonnie      Byers 
     Secretary/Treasurer
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