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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER: 000-26354
TRIMAINE HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
WASHINGTON 91-1636980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
FLOOR 21, MILLENNIUM TOWER, HANDELSKAI 94-96, A-1200, VIENNA, AUSTRIA
(Address of office)
(43) 1 240 25 102
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
------ -----
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes No X
----- -----
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:
Class Outstanding at May 12, 2003
----- -------------------------------
Common Stock, $0.01 15,241,897
par value
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
TRIMAINE HOLDINGS, INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2003
(UNAUDITED)
2
TRIMAINE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
MARCH 31, 2003 DECEMBER 31, 2002
-------------- -----------------
ASSETS
Current Assets
Cash and cash equivalents $ 3,906 $ 3,494
Note receivable 28 728
Real estate held for development and sale 1,249 1,242
Other 405 442
------------- --------------
Total current assets 5,588 5,906
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Investments 14,493 13,741
------------- --------------
$ 20,081 $ 19,647
============= ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 98 $ 45
Accrued liabilities 193 178
Advance from affiliates 565 506
------------- --------------
Total current liabilities 856 729
------------- --------------
Deferred income tax liability 1,111 866
------------- --------------
1,967 1,595
------------- --------------
Shareholders' Equity
Preferred stock 1 1
Common stock 152 152
Additional paid-in capital 16,329 16,331
Deficit (1,140) (707)
Accumulated other comprehensive income 2,772 2,275
------------- --------------
Total equity 18,114 18,052
------------- --------------
$ 20,081 $ 19,647
============= ==============
The accompanying notes are an integral part of these financial statements.
3
TRIMAINE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(UNAUDITED)
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
MARCH 31, 2003 MARCH 31, 2002
-------------- --------------
REVENUES
Investment and other $ (38) $ 251
------------ ------------
(38) 251
------------ ------------
COSTS AND EXPENSES
General and administrative expenses 103 61
Interest 2 3
------------ ------------
105 64
------------ ------------
Income (loss) before income tax (143) 187
Income tax expense (benefit) (10) 97
------------ ------------
Net income (loss) (133) 90
Deficit, beginning of period (707) (683)
Dividends paid on preferred shares (300) (300)
------------ ------------
Deficit, end of period $ (1,140) $ (893)
============ ============
Basic loss per share $ (0.01) $ (0.00)
============ ============
The accompanying notes are an integral part of these financial statements.
4
TRIMAINE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(DOLLARS IN THOUSANDS)
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
MARCH 31, 2003 MARCH 31, 2002
-------------- --------------
Net income (loss) $ (133) $ 90
Other comprehensive gain (loss):
Unrealized gain (loss) on securities, net of taxes 497 (1,419)
------------ -----------
Total comprehensive income (loss) $ 364 $ (1,329)
============ ===========
The accompanying notes are an integral part of these financial statements.
5
TRIMAINE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
MARCH 31, 2003 MARCH 31, 2002
-------------- --------------
Cash Flows from Operating Activities
Net income (loss) from operation $ (133) $ 90
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Changes in current assets and liabilities:
Real estate held for development and sale (7) (66)
Accounts payable and accrued liabilities 68 (72)
Due to affiliate 59 (6)
Deferred income tax liabilities (10) 96
Other 37 (242)
------------ ------------
Net cash provided by (used in)
operating activities 14 (200)
Cash Flows from Investing Activities
Decrease in note receivable 700 -
------------ ------------
Net cash provided by investing activities 700 -
Cash Flows from Financing Activities
Repurchases of common shares (2) (3)
Dividend on preferred shares (300) (300)
------------ ------------
Net cash used in financing activities (302) (303)
------------ ------------
Change in cash and cash equivalents 412 (503)
Cash and cash equivalents, beginning of period 3,494 5,919
------------ ------------
Cash and cash equivalents, end of period $ 3,906 $ 5,416
============ ============
The accompanying notes are an integral part of these financial statements.
6
TRIMAINE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2003
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The interim period consolidated financial statements contained herein have been
prepared by the Registrant pursuant to the rules and regulations of the U.S.
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or
omitted pursuant to such rules and regulations. These interim period statements
should be read together with the audited consolidated financial statements and
accompanying notes included in the Registrant's latest annual report on Form
10-K for the year ended December 31, 2002. In the opinion of the Registrant,
the unaudited consolidated financial statements contained herein contain all
adjustments necessary in order to present a fair statement of the results for
the interim periods presented.
NOTE 2. EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed by dividing income (loss) available
to common shareholders by the weighted average number of common shares
outstanding in the period. The weighted average number of shares outstanding
was 15,242,230 and 15,322,697 for the three month periods ended March 31, 2003
and 2002, respectively. There were no potentially dilutive securities
outstanding during the three months ended March 31, 2003 and 2002.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of the results of operations and financial
condition of TriMaine Holdings, Inc. (the "Corporation") for the three months
ended March 31, 2003 should be read in conjunction with the consolidated
financial statements and related notes included in this quarterly report, as
well as the most recent annual report on Form 10-K for the year ended December
31, 2002 filed with the Securities and Exchange Commission ("SEC").
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2003
Revenues were $(38,000) for the three months ended March 31, 2003, compared to
$0.3 million for the three months ended March 31, 2002, primarily as a result of
an unrealized loss on investments during the current period.
Costs and expenses were $0.1 million for the three months ended March 31, 2003
and 2002 . Interest expense decreased marginally in the three months ended
March 31, 2003 from the same period of 2002.
The Corporation had a net loss of $0.1 million in the three months ended March
31, 2003, compared to net income of $0.1 million in the same period of 2002.
LIQUIDITY AND CAPITAL RESOURCES
The Corporation had cash and cash equivalents of $3.9 million at March 31, 2003,
compared to $3.5 million at December 31, 2002. The Corporation had real estate
held for development and sale of $1.2 million at March 31, 2003 and December 31,
2002.
Operating activities provided cash of $14,000 in the three months ended March
31, 2003, compared to using cash of $0.2 million in the three months ended March
31, 2002. An increase in real estate held for development and sale used cash of
$7,000 in the current period, compared to $0.1 million in the comparative period
of 2002. An increase in accounts payable and accrued liabilities provided cash
of $0.1 in the three months ended March 31, 2003, compared to a decrease in same
using cash of $0.1 million in the same period in 2002. An increase in amounts
due to an affiliate provided cash of $0.1 million in the three months ended
March 31, 2003, compared to a decrease in same using cash of $6,000 in the same
period of 2002. Changes in other assets provided cash of $37,000 in the current
period, compared to using cash of $0.2 million in the comparative period in
2002.
Investing activities provided cash of $0.7 million in the three months ended
March 31, 2003, primarily as a result of repayments received on a note
receivable.
Financing activities used cash of $0.3 million in the three months ended March
31, 2003 and 2002, primarily as a result of the payment of dividends on the
Corporation's preferred stock.
8
The Corporation has no commitments for capital expenditures in relation to its
undeveloped real estate, although it may need to provide funds for
pre-development work on certain parcels in order to enhance their marketability
and sale value.
The Corporation believes that its assets should enable the Corporation to meet
its current ongoing liquidity requirements.
CRITICAL ACCOUNTING POLICIES
Reference is made to the Corporation's annual report on Form 10-K for the fiscal
year ended December 31, 2002 for information concerning critical accounting
policies.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
The statements in this report that are not based on historical facts are called
"forward-looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995. These statements appear in a number of
different places in this report and can be identified by words such as
"estimates", "projects", "expects", "intends", "believes", "plans", or their
negatives or other comparable words. Also look for discussions of strategy that
involve risks and uncertainties. Forward-looking statements include statements
regarding the outlook for our future operations, forecasts of future costs and
expenditures, the evaluation of market conditions, the outcome of legal
proceedings, the adequacy of reserves, or other business plans. You are
cautioned that any such forward-looking statements are not guarantees and may
involve risks and uncertainties. Our actual results may differ materially from
those in the forward-looking statements due to risks facing us or due to actual
facts differing from the assumptions underlying our estimates. Some of these
risks and assumptions include those set forth in reports and other documents we
have filed with or furnished to the SEC, including in our annual report on Form
10-K for the year ended December 31, 2002. We advise you that these cautionary
remarks expressly qualify in their entirety all forward-looking statements
attributable to us or persons acting on our behalf. Unless required by law, we
do not assume any obligation to update forward-looking statements based on
unanticipated events or changed expectations. However, you should carefully
review the reports and other documents we file from time to time with the SEC.
9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Reference is made to the Corporation's annual report on Form 10-K for the fiscal
year ended December 31, 2002 for information concerning market risk.
ITEM 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Corporation carried out an
evaluation, under the supervision and with the participation of the
Corporation's principal executive officer and principal financial officer, of
the effectiveness of the design and operation of the Corporation's disclosure
controls and procedures. Based on this evaluation, the Corporation's principal
executive officer and principal financial officer concluded that the
Corporation's disclosure controls and procedures are effective in timely
alerting them to material information required to be included in its periodic
reports filed with the SEC. It should be noted that the design of any system of
controls is based in part upon certain assumptions about the likelihood of
certain events, and there can be no assurance that any design will succeed in
achieving its stated goals under all future conditions, regardless of how
remote. In addition, the Corporation reviewed its internal controls, and there
have been no significant changes in its internal controls or in other factors
that could significantly affect those controls subsequent to the date of their
last evaluation.
10
PART II. OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the Corporation's annual report on Form 10-K for the fiscal
year ended December 31, 2002 for information concerning legal proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
99.1 - Certification
(b) REPORTS ON FORM 8-K
None.
11
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated: May 15, 2003
TRIMAINE HOLDINGS, INC.
By: /s/ Michael J. Smith
----------------------------------
Michael J. Smith, President, Chief
Financial Officer and Director
12
CERTIFICATION
I, Michael J. Smith, certify that:
1. I have reviewed this quarterly report on Form 10-Q of TriMaine Holdings,
Inc. (the "Registrant");
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the Registrant as of, and for, the periods presented in
this quarterly report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others with
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the audit
committee of the Registrant's board of directors (or persons performing
the equivalent functions):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the Registrant's
ability to record, process, summarize and report financial data
and have identified for the Registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Registrant's
internal controls; and
6. The Registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 15, 2003
/s/ Michael J. Smith
-------------------------------------
Michael J. Smith
President and Chief Financial Officer
13
EXHIBIT 99.1