Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Statement on Forward Looking Information

The following analysis discusses the Company's financial condition as of June 30, 2026, compared with June 30, 2025. The discussion should be read in conjunction with the unaudited financial statements and the related notes to the financial statements included elsewhere in this Form 10-Q.

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.

Management's Discussion and Analy sis of Financial Condition and Results of Operations

This section is organized as follows:

• Overview: A discussion of the Company's business operations.

• Liquidity and Capital Resources: An analysis of changes in our balance sheets and cash flows, and a discussion of our financial condition and potential sources of liquidity.

• Results of Operations: An analysis and discussion of our financial results comparing our results of operations for the current fiscal year to the prior fiscal year, and of the prior fiscal year compared to the previous fiscal year.

• Critical Accounting Estimates: A discussion of the accounting estimates that we believe are most important to understand the assumptions and judgments incorporated in our reported financial results and forecasts, as well as recent accounting pronouncements that have had or are expected to have a material impact on our results of operations.

Overview

Pismo Coast Village, Inc. operates as a 400-space recreational vehicle resort located along the coast of Central California. The resort offers a full range of services, such as a general store, video arcade, laundromat, and an RV storage operation.

The Company 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 Company 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 for 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.

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 45 free nights camping annually. Additional revenues come from RV storage and spotting, an on-site convenience store, property leases and other ancillary activities such as a restaurant, laundromat, arcade, and recreational activities.

The Central Coast remains a highly sought-after destination for RV enthusiasts actively seeking quality accommodations. RVing continues to provide an affordable and immersive outdoor experience, and the Company is proud to deliver top-tier facilities and services in this popular location.

The outdoor hospitality industry continues to demonstrate resilience and appeal in the first nine months of FY2026. According to KOA's 2025 Camping & Outdoor Hospitality Report (the most recent comprehensive annual survey available), the sector remains strong overall, with camping participation having grown significantly over the past decade-including over 11 million additional households camping in 2024 compared to 2019. Looking ahead, the industry is stabilizing in 2025-2026, with projections for continued interest: around one million new households expected to try camping, 71-72% of campers planning trips, and many viewing it as a cost-effective travel option amid economic considerations. Key attractions of the outdoor experience include spending time in nature (emphasized by a majority of campers), access to classic amenities like fire pits and outdoor seating, and traditional camping accommodations in RVs or tents.

Private campgrounds, such as Pismo Coast Village Resort, remain a top choice for travelers seeking authentic and high-quality outdoor hospitality. In April 2026, Pismo Beach was named the #1 Best Small Coastal Town in the United States by USA TODAY 10 Best Readers' Choice Awards for the second consecutive year. The Company was awarded the Best of the Best Award from RV LIFE, recognizing it as among the top 25% of campgrounds and RV parks in North America stated to be based on authentic reviews from verified RVers-highlighting the Company's guest satisfaction, prime beachfront location, and commitment to excellence.

RV storage remains in demand and a primary revenue source for the Company. As of June 2026, the waitlist for new storage clients exceeds 300. To meet this demand, the Company is progressing with plans to develop an estimated 150-unit storage facility on a new 4.42-acre property in Nipomo. RV storage offers customers several advantages, including eliminating the stress of towing, reducing the need to own a tow vehicle, enabling shared use among family members, and providing added convenience.

Continued investment in resort enhancements remains a top priority to ensure a premier experience for both guests and shareholders. The resort is recognized as a leader in the industry, with accolades from reputable organizations such as Good Sam for its exceptional facilities and high standards. The Company's dedication to quality, value, and customer satisfaction is reflected in its success, driven by repeat business, positive word of mouth, and guest referrals.

The Company's marketing strategy focuses on digital platforms, social media content, advertising in national directories, and placements in leading trade magazines. These initiatives are designed to strengthen the Company's visibility and ensure sustained growth in the highly competitive outdoor hospitality market.

Liquidity and Capital Resources

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 was approximately $1,884,000 in the nine months ended June 30, 2026, compared to approximately $1,891,000 in the same period of 2025. Working capital was $11,210,000 and $10,456,000 at the end of June 30, 2026 and September 30, 2025, respectively.

The Company plans approximately $1,900,000 of additional capital expenditures in fiscal year 2026 to further enhance the Resort facilities and services. The most significant capital project is development of the 4.42-acre property in Nipomo for RV Storage. In addition, the Company remodeled its sales office into an additional accounting office during the quarter ended June 30, 2026 and plans to repair the asphalt on Resort roads as part of its ongoing facility maintenance programs. Funding for these projects is expected to come from normal operating cash flows and cash reserves. These capital expenditures are expected to increase the Resort's value to its shareholders and the general public.

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 ensure funds will be available if required. In anticipation of future large projects, the Board of Directors has instructed management to build operational cash balances. 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.

The Board of Directors continues its previously established policy of adopting a stringent conservative budget for fiscal year 2026, which projects a positive cash flow of approximately $1.0 million from operations. This projection is based on paid site occupancy reflecting similar occupancy as experienced in fiscal year 2025. While the Company projects a positive cash flow, this cannot be assured for fiscal year 2026.

Results of Operations

The Company's revenue streams originate primarily from three sources: (a) RV camping site rentals, (b) RV storage & towing fees, and (c) retail sales through a general store. In addition, the Company generates revenue from leases of real property, such as a RV repair facility and cell towers on our real property and from other ancillary services, such as the restaurant, arcade and laundromat.

Three months ended June 30, 2026 compared to the three months ended June 30, 2025

		Three months ended June 30,
		2026						2025
RV camping site rentals	$	2,245,000			73%		$	2,041,000			70%
RV storage and towing fees		526,000			17%			535,000			19%
Retail store sales		205,000			7%			214,000			7%
Property lease income		49,000			1%			58,000			2%
Other ancillary services		65,000			2%			63,000			2%
	$	3,090,000			100%		$	2,911,000			100%

Overall, total revenue was higher in the three months ended June 30, 2026 compared to the same period of 2025 primarily due to site rental rate increases in November 2025 (a $179,000 or 6% increase).

RV camping site rental revenues increased $204,000 (or 10%) to $2,245,000 in the three months ended June 30, 2026 compared to $2,041,000 in the same period of 2025 primarily due to a $20 per night rate increase offset by the impact of 2% lower occupancy during 2026 than 2025. Occupancy was lower in 2026 than 2025 because of the timing of weekends, academic schedules, and holidays during the calendar.

		Three months ended June 30,
		2026						2025
Paid RV camping site nights		18,542			73%			19,800			75%
Unpaid shareholder nights		7,029			27%			6,764			25%
Total Occupancy		25,571			100%			26,564			100%
Occupancy %		70%						73%
Sites Not Occupied		10,829			30%			9,836			27%
Total Capacity		36,400						36,400

RV storage & towing fees decreased $9,000 to $526,000 in the three months ended June 30, 2026 compared to $535,000 in the same period of 2025 due to slightly lower occupancy during the period that impacted towing fees.

Retail store revenues decreased $9,000 to $205,000 in the three months ended June 30, 2026 compared to $214,000 in the same period of 2025 due to the offsetting impact of lower occupancy and seasonal sales incentives for slow moving product. The company strives to maintain consistent pricing, which leads to moderate margins for staples such as groceries, ice, wood, and RV parts; however some upward pricing occurred due to inflationary costs.

Property lease income, which is primarily associated with rental of the RV repair facilities, decreased $9,000 to $49,000 in the three months ended June 30, 2026 compared to $58,000 in same period of 2025 due to breach and subsequent termination of two separate leases by the same tenant for different locations, one in 2025 and one in 2026.

Operating expenses increased $214,000 to $2,065,000 in the three months ended June 30, 2026 compared to $1,851,000 in same period of 2025. The increase is primarily due to a $70,000 increase in employee compensation and related costs, a $56,000 increase in resort-related costs such as landscaping and vehicle expense, a $40,000 increase in legal costs associated with historical employment-related matters, and a $45,000 increase in general and administrative costs.

Cost of goods sold increased $22,000 to $132,000 in the three months ended June 30, 2026 compared to $110,000 in the same period of 2025 primarily due to upward inflationary costs and the mix of products sold in the store.

Depreciation and amortization expense increased $11,000 to $151,000 in the three months ended June 30, 2026 compared to $140,000 in the same period of 2025 due primarily to depreciation on two new tow vehicles and sewer pump equipment placed in service between August and October 2025 as well as new pool heating and office equipment placed into service during April and May 2026.

Other income and expense, net decreased $3,000 to $100,000 in the three months ended June 30, 2026, compared to $103,000 in the same period of 2025, primarily because of additional interest on increased cash reserves, offset by decreased interest rates in 2026 compared to 2025.

Although the supply-demand balance generally remains favorable, future-operating results could be impacted by changes in inflation and the economy that lead to increases or decreases in demand. Depending on the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Changes in demand could limit the Company's ability to pass through inflationary increases in operating costs as higher rates.

Additionally, increases in transportation and fuel costs or sustained recessionary periods could unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive. The company intends to continue to market site usage at its highest value and believes that currently this will not negatively impact the Company's ability to capture an optimum market share.

Nine months ended June 30, 2026 compared to the nine months ended June 30, 2025

		Nine months ended June 30,
		2026						2025
RV camping site rentals	$	5,320,000			70%		$	4,627,000			67%
RV storage and towing fees		1,528,000			20%			1,479,000			21%
Retail store sales		485,000			6%			504,000			7%
Property lease income		149,000			2%			172,000			3%
Other ancillary services		144,000			2%			148,000			2%
	$	7,626,000			100%		$	6,930,000			100%

Overall, total revenue increased in the nine months ended June 30, 2026 compared to the same period of 2025 primarily due to site rental rate increases (a $696,000 or 10% increase).

RV camping site rental revenues increased $693,000 (or 15%) to $5,320,000 in the nine months ended June 30, 2026 compared to $4,627,000 in the same period of 2025 primarily due to a $20 per night rate increase offset by the impact of 2% lower occupancy during 2026 than 2025. Occupancy was lower in 2026 than 2025 because of the timing of weekends, academic schedules, and holidays during the calendar quarter.

		Nine months ended June 30,
		2026						2025
Paid RV camping site nights		47,760			67%			50,292			69%
Unpaid shareholder nights		23,163			33%			22,680			31%
Total Occupancy		70,923			100%			72,972			100%
Occupancy %		65%						67%
Sites Not Occupied		38,277			35%			36,228			33%
Total Capacity		109,200						109,200

RV storage & towing fees increased $49,000 to $1,528,000 in the nine months ended June 30, 2026 compared to $1,479,000 in the same period of 2025 due to a $5 per month rate increase effective January 2025 that was fully realized starting in January 2026 for clients that are billed annually. RV storage lots remained at full capacity at period end.

Retail store revenues decreased $19,000 to $485,000 in the nine months ended June 30, 2026 compared to $504,000 in the same period of 2025 due to the offsetting impact of lower occupancy and seasonal sales incentives for slow moving product. The company strives to maintain consistent pricing, which leads to moderate margins for staples such as groceries, ice, wood, and RV parts; however, some upward pricing occurred due to inflationary costs.

Property lease income, which is primarily associated with rental of the RV repair facilities, decreased $23,000 to $149,000 in the nine months ended June 30, 2026 compared to $172,000 in same period of 2025 due to breach and subsequent termination of two separate leases by the same tenant for different locations, one in 2025 and one in 2026.

Operating expenses increased $323,000 to $6,116,000 in the nine months ended June 30, 2026 compared to $5,793,000 in same period of 2025. The increase is primarily due a $203,000 increase in legal, consulting, and general and administrative expenses, along with a $102,000 increase in employee-related expenses and $18,000 increase in resort-related costs.

Cost of goods sold increased $63,000 to $321,000 in the nine months ended June 30, 2026 compared to $258,000 in the same period of 2025 primarily due to upward inflationary cost of products and the mix of products sold in the store.

Depreciation and amortization expense increased $44,000 to $461,000 in the nine months ended June 30, 2026 compared to $417,000 in the same period of 2025 due primarily to depreciation on two new tow vehicles and sewer pump equipment placed in service between August and October 2025 as well as new pool heating and office equipment placed into service during April and May 2026.

Other income and expense, net decreased $13,000 to $274,000 in the nine months ended June 30, 2026, compared to $287,000 in the same period of 2025, primarily because of additional interest on increased cash reserves, offset by decreased interest rates in 2026 compared to 2025.

Although the supply-demand balance generally remains favorable, future-operating results could be impacted by changes in inflation and the economy that lead to increases or decreases in demand. Depending on the nature of business and economic cycles and trends, rates may be adjusted accordingly, if deemed necessary. Changes in demand could limit the Company's ability to pass through inflationary increases in operating costs as higher rates.

Additionally, increases in transportation and fuel costs or sustained recessionary periods could unfavorably impact future results. However, the Company believes that its financial strength and market presence will enable it to remain extremely competitive. The company intends to continue to market site usage at its highest value and believes that currently this will not negatively impact the Company's ability to capture an optimum market share.

Seasonality

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 weekend, Thanksgiving week, and Christmas/New Year's week.

Occupancy is impacted by weather patterns, as demand decreases during the rainy season and also in years with more rain. Additionally, occupancy within any particular quarter is impacted by the timing of weekends and holidays within that calendar quarter. Due the seasonal impact, fall and winter months derive less revenue and profit than the rest of the year. Revenue, paid occupancy and income (loss) from operations for the past ten quarters were as follows:

Occupancy during the three months ended June 30, 2026 was slightly less than the same period of 2025 due primarily to the timing of weekends, academic schedules, and holidays. Revenue for the three months ended June 30, 2026 was higher than the same period of 2025, due primarily to the $20 per night site rate increases established November 2025. Income from operations for the three months ended June 30, 2026 decreased compared to the same period of 2025 due to increasing revenue offset by increasing costs and expenses primarily associated with an increase in legal, HR, consulting, and employee-related costs.

Occupancy during the quarter ending September 30, 2026 is expected to be seasonally higher than the three months ended June 30, 2026, because it includes the beginning of the summer, resulting in higher revenue and profitability.

Critical Accounting Estimates

The Company's financial statements are prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosure of contingent assets and liabilities. In some cases, management could reasonably have used different accounting policies and estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected.

Management bases estimates upon past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates. Our critical accounting policies are described in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of our 2025 Annual Report on Form 10-K.

Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Financial Statements, which have been prepared in accordance with U.S. GAAP. Our significant accounting policies are more fully described in Note 2, Significant Accounting Policies, in the Notes to Financial Statements of our 2025 Annual Report on Form 10-K. There were no changes to our significant accounting policies during the nine months ended June 30, 2026.