Securities and Exchange Commission Sec Form 17-Q Quarterly Report Pursuant to Section 17 of the Securities Regulation Code and S
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SECURITIES AND EXCHANGE COMMISSION SEC FORM 17-Q QUARTERLY REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17(2)(b) THEREUNDER 1. For the quarterly period ended May 31, 2006 2. Commission identification number 364 3. BIR Tax Identification No 076-000-270-220 4. Exact name of issuer as specified in its charter VICTORIAS MILLING COMPANY, INC. 5. Province, country or other jurisdiction of incorporation or organization Plant site: Victorias City, Negros Occidental 6. Industry Classification Code: (SEC Use Only) 7. Address of registrants principal office Postal Code 9126 Sultana Street corner Honradez Street Barangay Olympia, Makati City 8. Registrant’s telephone number, including area code (02) 896-0381 (02) 899-0485 Fax# (02) 895-4150 9. Former name, former address and former fiscal year, if changed since last report Not Applicable 10. Securities registered pursuant to Sections 8 and 12 of the Code, or Sections 4 and 8 of the RSA Common stock Par value of 1.00 each Authorized 2,563,035,708 shares Subscribed and paid up 1,595,941,983 shares 11. Are any or all of the securities listed on a Stock Exchange? Yes [ x ] No [ ] If yes, state the name of such Stock Exchange and the class/es of securities listed therein: _______________________________ _______________________ 12. Indicate by check mark whether the registrant: (a) has filed all reports required to be filed by Section 17 of the Code and SRC Rule 17 thereunder or Sections 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines, during the preceding twelve (12) months (or for such shorter period the registrant was required to file such reports) Yes [ x ] No [ ] (b) has been subject to such filing requirements for the past ninety (90) days. Yes [ x ] No [ ] PART I--FINANCIAL INFORMATION Item 1. Financial Statements. Financial Statements and, if applicable, Pro Forma Financial Statements meeting the requirements of SRC Rule 68, Form and Content of Financial Statements, shall be furnished as specified therein. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Furnish the information required by Part III, Paragraph (A)(2)(b) of “Annex C”. PART II—OTHER INFORMATION SIGNATURES Pursuant to the requirements of the Securities Regulation Code, the issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. VICTORIAS MILLING COMPANY, INC. Date: July 14, 2006 VICTORIAS MILLING COMPANY, INC. AND SUBSIDIARIES BALANCE SHEETS AS OF MAY 31, 2006 AND AUGUST 31, 2005 (In Thousand Pesos) PARENT CONSOLIDATED May 31 August 31 May 31 August 31 2006 2005 2006 2005 ASSETS CURRENT ASSETS Cash and cash equivalents - note 4 424,261 785,241 473,613 813,306 Receivables, net - note 5 57,328 91,146 91,706 113,232 Inventories, net - note 6 391,642 325,787 444,950 383,188 Prepayments and other current assets - note 7 248,214 168,019 255,881 174,979 Total current assets 1,121,446 1,370,193 1,266,151 1,484,705 INVESTMENTS IN SHARES OF STOCK AND ADVANCES, net - note 8 Subsidiaries 248,884 243,726 Others, at cost 54,588 55,754 54,588 55,754 DEFERRED TAX ASSETS 1,538 893 PROPERTY, PLANT AND EQUIPMENT, net - note 9 5,164,762 5,398,026 5,309,691 5,546,362 OTHER ASSETS, net - note 10 1,771,060 90,214 1,772,984 98,233 TOTAL ASSETS 8,360,739 7,157,914 8,404,951 7,185,947 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses 1,760,638 1,536,886 1,841,049 1,585,562 Current portion of long term debts - note 12 185,648 189,772 4,124 Total current liabilities 1,946,286 1,536,886 2,030,821 LONG TERM DEBTS, net of current portion - note 12 6,978,857 7,215,261 6,985,036 7,228,656 DEFERRED TAX LIABILITY 162,649 162,649 162,649 162,649 CONTINGENT LIABILITY 600,000 600,000 DUE TO UNCONSOLIDATED AFFILIATED COMPANIES 9,758 9,758 13,543 15,876 ACCUMULATED LOSSES IN EXCESS OF INVESTMENT COST - note 18 33,881 33,881 MINORITY INTEREST (16,404) (10,397) CAPITAL DEFICIENCY (1,370,693) (1,800,522) (1,370,693) (1,800,523) TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 8,360,739 7,157,914 8,404,951 7,185,947 See accompanying notes to financial statements VICTORIAS MILLING COMPANY, INC. AND SUBSIDIARIES STATEMENTS OF OPERATION FOR THE PERIOD ENDED MAY 31, 2006 AND 2005 (In Thousand Pesos) PARENT CONSOLIDATED 2006 2005 2006 2005 REVENUES FROM OPERATIONS 3,215,071 2,307,955 3,356,075 2,387,129 COST OF SALES 1,616,540 1,583,041 1,737,941 1,640,979 GROSS PROFIT 1,598,531 724,914 1,618,134 746,150 OTHER INCOME 143,650 58,917 145,766 61,373 1,742,180 783,831 1,763,900 807,523 SELLING EXPENSES 31,266 25,737 33,834 25,737 ADMINISTRATIVE EXPENSES 143,736 142,423 153,721 156,753 OTHER OPERATING EXPENSES 651,198 40,640 651,198 40,640 INCOME FROM OPERATIONS 915,981 575,031 925,149 584,393 FINANCING COST 492,160 468,691 494,475 471,702 EQUITY IN NET INCOME (SHARE IN LOSSES) OF INVESTEE COMPANIES 6,008 4,947 PROVISION FOR INCOME TAX 845 1,404 NET INCOME FOR THE PERIOD 429,829 111,287 429,829 111,287 EARNINGS PER SHARE 0.27 0.07 0.27 0.07 See accompanying notes to financial statements VICTORIAS MILLING COMPANY, INC. AND SUBSIDIARIES STATEMENTS OF OPERATION FOR THE QUARTER ENDED MAY 31, 2006 AND 2005 (In Thousand Pesos) PARENT CONSOLIDATED 2006 2005 2006 2005 REVENUES FROM OPERATIONS 1,177,504 851,226 1,221,194 863,839 COST OF SALES 542,117 569,489 580,252 574,877 GROSS PROFIT 635,386 281,737 640,942 288,962 OTHER INCOME 53,302 21,768 55,091 22,576 688,688 303,505 696,033 311,538 SELLING EXPENSES 13,488 11,790 14,569 11,790 ADMINISTRATIVE EXPENSES 30,866 58,136 34,304 62,549 OTHER OPERATING EXPENSES 539,167 1,313 539,167 1,313 INCOME FROM OPERATIONS 105,230 232,266 107,993 235,886 FINANCING COST 182,873 155,805 183,658 156,842 EQUITY IN NET INCOME (SHARE IN LOSSES) OF INVESTEE COMPANIES 1,839 2,083 PROVISION FOR INCOME TAX 139 500 NET INCOME FOR THE PERIOD (75,804) 78,544 (75,804) 78,544 EARNINGS PER SHARE (0.04) 0.05 (0.04) 0.05 See accompanying notes to financial statements VICTORIAS MILLING COMPANY, INC. AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED MAY 31, 2006 AND 2005 PARENT CONSOLIDATED 2006 2005 2006 2005 CASH FLOWS FROM OPERATING ACTIVITIES: Net income for the period 429,829 111,287 429,829 111,287 Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 331,441 286,817 333,046 289,485 Foreign currency differences (50,756) (50,756) Provision for contingent liability 600,000 600,000 (Increase) decrease in receivables 33,818 37,748 21,526 38,498 (Increase) decrease in inventories (65,855) (120,501) (61,762) (133,533) (Increase) decrease in prepayments and other current assets (80,195) 110,180 (81,547) 110,260 Increase in accounts payable and accrued expenses 223,753 198,187 248,271 205,124 Net cash provided by operating activities 1,422,035 623,718 1,438,607 621,121 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in property, plant and equipment, net (98,177) (201,229) (96,375) (200,458) (Increase) decrease in other assets (1,680,846) 1,842 (1,674,751) 3,360 Net cash used in investing activities (1,779,023) (199,387) (1,771,126) (197,098) CASH FLOWS FROM FINANCING ACTIVITIES: Decrease in long term debts - (26,802) - (29,894) (Increase) decrease in investments in and advances to affiliated companies and others - net (3,992) (1,590) (7,174) 147 Net cash used in financing activities (3,992) (28,392) (7,174) (29,747) NET INCREASE IN CASH AND CASH EQUIVALENTS (360,980) 395,939 (339,693) 394,276 CASH AND CASH EQUIVALENTS Beginning of period 785,241 629,090 813,306 658,388 End of period 424,261 1,025,029 473,613 1,052,664 VICTORIAS MILLING COMPANY, INC. AND SUBSIDIARIES STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE PERIOD ENDED MAY 31, 2006 AND 2005 (In thousand pesos) PARENT CONSOLIDATED May 31 May 31 2006 2005 2006 2005 CAPITAL STOCK Authorized - 2,563,035,708 shares at P1 par value each Issued - 1,595,957,670 shares 1,595,957 1,595,957 1,595,957 1,595,957 Less - shares held in treasury (15) (15) (15) (15) Issued and outstanding 1,595,942 1,595,942 1,595,942 1,595,942 REVALUATION INCREMENT IN PROPERTY, PLANT AND EQUIPMENT Beginning of year, net of depreciation charged to operations 302,063 617,619 302,063 617,619 Share in revaluation increment in property, plant and equipment of subsidiaries - - Decrease in revaluation increment due to rail line and rolling stock items written off - - Increase in revaluation increment due to appraisal - - Application of revaluation increment against deficit - - 302,063 617,619 302,063 617,619 DEFICIT Beginning of the year (3,698,527) (3,574,164) (3,698,527) (3,574,164) Priod period adjustments Share in prior period adjustments of a subsidiary Net Income (loss) for the period 429,829 111,287 429,829 111,287 End of the year (3,268,698) (3,462,877) (3,268,698) (3,462,877) CAPITAL DEFICIENCY (1,370,693) (1,249,315) (1,370,693) (1,249,315) See accompanying notes to financial statements VICTORIAS MILLING COMPANY, INC.