<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of theSecurities Exchange
Act of 1934 for the Quarterly Period ended
JUNE 30, 1996 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: 1-3753
--------------
UNITED PARK CITY MINES COMPANY
- --------------------------------------------------------------------------------
(exact name of small business issuer as specified in its charter)
Delaware 87-0219807
- -------------------------------- --------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization.) Identification No.)
P. O. Box 1450, Park City, Utah 84060
- ---------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
(801) 649-8011
- --------------------------------------------------------------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 .
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,721,418
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 2
PART I - FINANCIAL INFORMATION
UNITED PARK CITY MINES COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
1996
----------
ASSETS:
Cash and cash equivalents............... $ 157,537
Accounts receivable..................... 51,464
Prepaid expenses........................ 114,087
Material and supplies inventories....... 100,498
Deferred income taxes................... 475,202
Other................................... 27,001
----------
925,789
----------
Real Estate:
Hidden Meadows development............ 2,604,797
Deferred development costs............ 787,391
----------
3,392,188
----------
Property and Equipment:
Mine shaft, buildings, and equipment.. 4,146,680
Mine tour attraction.................. 4,642,135
Construction-in-progress.............. 73,666
Resort facilities..................... 58,077
Less accumulated depreciation......... (3,696,513)
----------
5,224,045
Land less accumulated depletion of
$1,062,190............................. 7,492,223
Water rights............................ 400,000
----------
13,116,268
----------
Total assets............................ $17,434,245
===========
The accompnaying notes are an integral part of the consolidated financial
statements.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 3
UNITED PARK CITY MINES COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30,
1996
------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable................................... $ 671,057
Accrued liabilities................................ 182,964
Deferred revenue.................................. 500
Bank notes payable................................. 815,330
------------
Total liabilities................................ 1,669,851
------------
Stockholders' equity:
Common stock, $.01 par value:
Authorized: 3,750,000 shares
Issued: 2,701,544 shares...................... 27,015
Capital in excess of par value................... 31,126,187
Accumulated deficit.............................. (15,205,024)
------------
15,948,178
Less cost of treasury stock - 1,294
shares.......................................... (183,784)
Total stockholders' equity....................... 15,764,394
Total liabilities and stockholders' equity......... $ 17,434,245
===========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 4
UNITED PARK CITY MINES COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For Three Months Ended For Six Months Ended
----------------------- ----------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
--------- ---------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Lot sales-Morning Star Estates......... $1,002,750 $ 387,000 $1,552,750
Lot sales-Hidden Meadows............... $ 455,000 755,000
Mine tour attraction................... 318,372 620,979
Sale of land and building.............. 950,000
Sale of land........................... 25,000 25,000
Contract services...................... 34,945 58,065 34,945 116,473
Interest............................... 1,170 32,425 2,990 77,770
Royalties and rentals.................. 47,863 44,313 145,983 153,381
Other.................................. 114,292 750,178 115,719 750,312
---------- ---------- --------- ---------
996,642 1,887,731 3,037,616 2,650,686
---------- ---------- ---------- ----------
Expenses:
Cost of lot sales and selling
expense-Morning Star Estates.......... 625,063 202,298 883,387
Cost of lot sales and selling expense-
Hidden Meadows........................ 238,947 386,685
Mine tour attraction................... 497,383 1,038,978
Cost of land and building sold......... 179,959
Cost of land sold...................... 4,902 4,902
General and administrative costs....... 326,917 306,721 613,417 549,027
Litigation costs....................... 290 64,677 19,206 114,549
Mine maintenance and administrative
costs................................. 261,331 141,394 575,557 394,140
Contract services costs................ 28,751 48,692 28,751 97,365
Depreciation........................... 142,682 49,134 279,240 98,851
Interest............................... 10,619 18,030
---------- ---------- ---------- ----------
1,511,822 1,235,681 3,347,023 2,137,319
---------- ---------- ---------- ----------
Income (loss) before income tax......... $ (515,180) $ 652,050 $ (309,407) $ 513,367
Income tax benefit..................... 70,000
---------- ---------- ---------- ----------
Net income (loss)....................... $ (445,180) $ 652,050 $ (309,407) $ 513,367
========== ========== ========== ==========
Net income (loss) per share............. $(0.16) $0.24 $(0.13) $0.19
Weighted average number of shares
outstanding............................ 2,721,418 2,701,544 2,721,418 2,701,544
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 5
UNITED PARK CITY MINES COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For Six Months Ended
----------------------
June 30, June 30,
1996 1995
---------- ----------
Cash flows from operating activities:
Net income (loss)..................... $ (309,407) $ 513,367
---------- ----------
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation....................... 279,240 98,851
Water rights....................... (400,000)
Increase (decrease) from changes in:
Restricted cash................... (982)
Accounts receivable............... (5,810) (182,704)
Prepaid expenses and inventory.... 112,437 (14,280)
Deferred development costs-other.. (70,497) 825,550
Morning Star Estates development.. 209,206 708,622
Hidden Meadows development........ 161,770 (633,377)
Accounts payable and accrued
liabilities...................... (817,676) 172,488
Customer deposit and deferred
revenue.......................... (102,500)
Retentions payable................ (69,543)
Cost of land and net book value
of building sold................. 183,203
Other............................. (3,244)
---------- ----------
Total adjustments............. (53,871) 504,625
---------- ----------
Net cash provided (used) by operating
activities............................. (363,278) 1,017,992
---------- ----------
Cash flows from investing activities:
Construction-in-progress.............. (27,796) (1,009,215)
Capital expenditures.................. (341,527) (222,592)
---------- ----------
Net cash used by investing activities... (369,323) (1,231,807)
---------- ----------
Cash flows from financing activities:
Proceeds from bank note payable....... 1,012,415
Principal payments on bank note
payable.............................. (496,000)
---------- ----------
Net cash provided by financing
activities............................. 516,415
---------- ----------
Net decrease in cash and cash
equivalents............................ (216,186) (213,815)
Cash and cash equivalents-beginning of
period................................. 373,723 3,446,593
---------- ----------
Cash and cash equivalents-end of period. $ 157,537 $3,232,778
========== ==========
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 6
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
NOTE 1 CONDENSED FINANCIAL STATEMENTS
A. Disclosure
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these financial statements
be read in conjunction with the 1995 Annual Report to Stockholders of United
Park City Mines Company (hereinafter "United Park" or "the Company" or "the
Registrant").
B. Management's Representation
The consolidated balance sheet as of June 30, 1996, the consolidated statement
of operations for the three and six month periods ended June 30, 1996 and 1995
and the consolidated statement of cash flows for the six month periods then
ended have been prepared by the Registrant, without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations, and
cash flows at June 30, 1996 and for all periods presented have been made.
NOTE 2 IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January 1, 1996, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation. The
Company has elected to continue to apply the current stock based compensation
methods pursuant to APB 25 and to furnish the additional disclosures required by
SFAS No. 123. The Company also adopted, as of January 1, 1996, SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets. The adoption of SFAS No.
121 has no impact on the Company's financial statements.
NOTE 3 RECLASSIFICATIONS
Certain amounts from 1995 have been reclassified to conform to the current
year's presentation. These reclassifications have no effect on net loss, total
assets, total liabilities or stockholders' equity.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
Real Estate
- -----------
The Company's wholly owned subsidiary Blue Ledge Corporation (hereinafter "Blue
Ledge") finalized the sale of the one remaining unsold lot in the Morning Star
Estates subdivision during the first six months of 1996. Blue Ledge recognized
a profit of $184,702 on the gross sale of $387,000. The cash proceeds from this
lot sale were used to fund some of the Company's other operations.
During the first six months of 1996, Blue Ledge sold three lots in the Hidden
Meadows subdivision and recognized a profit of $368,315 on the gross sales of
$755,000. The cash proceeds from these lot sales were used to repay bank notes
and fund other Company operations. Blue Ledge closed the sales of two
additional lots in the Hidden Meadows subdivision during July and August of
1996. It is anticipated that the cash proceeds from these sales and future
sales will be used to repay bank notes and fund the Company's other operations.
Capital Expenditures
- --------------------
The Company incurred capital expenditures of approximately $369,323 during the
first six months of 1996, primarily for facilities and equipment used in the
mine tour activities conducted by the Company's wholly owned subsidiary Park
City Silver Mine Adventure, Inc. (hereinafter "Silver Mine Adventure") and for
equipment used in its mine maintenance activities. The Company does not
anticipate similar expenditures during the remainder of 1996.
Silver Mine Adventure
- ---------------------
Silver Mine Adventure opened the mine tour attraction to the public in December,
1995 and over 57,000 visitors have experienced the tour as of the end of June,
1996. The Silver Mine Adventure generated revenue of $620,979 through June 30,
1996. The cash proceeds from this revenue were used to partially fund some of
the tour's operations. The Company anticipates that the cash flows from future
Silver Mine Adventure revenues will be used to fund the tour's operations.
Cash Flow Analysis
- ------------------
The Company's unrestricted cash balance decreased $216,186 during the first six
months of 1996, leaving a cash balance of $157,537 as of June 30, 1996. The cash
balance decreased due to use of cash in the Company's capital expenditures,
construction-in-progress, reduction of accounts payable and operations. The
Company will use a portion of the June 30, 1996 cash balance along with a
portion of the proceeds from future real estate sales and receipts from Silver
Mine Adventure to fund its future operations. The Company has secured bank
financing which it can draw upon to supplement its cash flows if the need
arises. The Company believes that its existing capital resources, cash flows
from operations and supplemental borrowings are sufficient to meet its
anticipated operating requirements for 1996.
RESULTS OF OPERATIONS
1996 Compared with 1995
- -----------------------
During the first six months of 1996, Blue Ledge sold the one remaining Morning
Star Estates lot for total gross proceeds of $387,000 and recognized a profit of
$184,702 or 48% on the sale. During the first six
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 8
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
months of 1995, the Company sold two lots in the Morning Star Estates
subdivision for total gross proceeds of $1,552,750 and recognized a profit of
$669,363 or 43% on the sales.
Blue Ledge sold three lots in the Hidden Meadows subdivision for a profit of
$368,315 or 49% of the gross sales price of $755,000 during the first half of
1996. The Hidden Meadows subdivision did not receive its final approval for
development until April of 1995 and no sales were transacted during the first
half of 1995.
During the first six months of 1996, Silver Mine Adventure generated revenue of
$620,979 and incurred $1,038,978 in expenses. These expenses include some one-
time/non-recurring marketing costs which are not anticipated to continue
throughout 1996. The Silver Mine Adventure has experienced increased numbers of
visitors to the tour as a result of increases in group tour bookings and
increased tourism during the summer months. During the first half of 1996, the
Silver Mine Adventure had over 57,000 visitors or an average of approximately
313 visitors per day. During the month of July, 1996, the Silver Mine Adventure
had an additional 20,000 visitors or an average of approximately 631 visitors
per day. The Company believes that the Silver Mine Adventure will cover its
direct operating costs in 1996 and contribute to the Company's cash flows in the
future.
The Company occasionally sells land and improvements outside of its development
areas as such opportunities occur. The Company made one such sale during the
first quarter of 1996 for gross proceeds of $950,000. After deducting the cost
of land and the net book value of the building sold of $179,959, the Company
recognized a profit of $770,041 or 81% on the sale. During the second quarter
of 1996, the Company made one additional such sale for gross proceeds of $25,000
and, after deducting the cost of land and selling expenses, recognized a profit
of $20,098 or 80% on the sale.
Interest income decreased 96% during the first two quarters of 1996, when
compared with the first two quarters of 1995. The decrease in interest income
is due to smaller cash balances available for investment and lower interest
rates offered on investments during 1996.
The Company received $34,945 for contract services during the second quarter of
1996. During the first quarter of 1996, the Company did not perform any
contract services work. However, the Company received $116,473 for contract
services during the first and second quarters of 1995.
The substantial decrease in other revenues during the first half of 1996, when
compared to the first half of 1995, is the direct result of a one-time
settlement in 1995 with a third party of costs related to tunnel maintenance
work. The settlement was a non-recurring event.
General and administrative expense increased 12% during 1996, when compared with
1995. The increase is primarily due to increased staff and increased costs
associated with general operations.
During the first six months of 1996, the Company incurred legal fees of $19,206
in connection with the Resort Litigation to dispose of the remaining aspects of
this litigation. This litigation was dismissed with prejudice in 1995 (refer to
the Company's 1995 Annual Report to Stockholders for a more complete
description). During the first six months of 1995, the Company incurred legal
fees of $114,549 in connection with this litigation.
Increased labor and material costs resulted in an increase in mine maintenance
and administrative costs of approximately 46% during the first half of 1996 when
compared with the first half of 1995. The increase in such costs is due to the
Company's intensified efforts in its tunnel maintenance activities.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Charges for depreciation increased 183% during the first six months of 1996 when
compared with the same period in 1995. This increase is a result of additional
capital assets used in the Company's operations, primarily associated with the
mine tour attraction operated by Silver Mine Adventure.
The Company incurred interest in the amount of $18,030 on bank borrowings used
to fund its operations during the six months ended June 30, 1996. The Company
did not make such borrowings during the same period of 1995.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 10
PART II.
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders held May 29, 1996, votes were cast as
follows for the election of directors:
FOR WITHHELD
- ---------------------------------------------------
Alan L. Gordon 2,469,349 10,220
- ---------------------------------------------------
Joseph S. Lesser 2,470,343 9,226
- ---------------------------------------------------
Edwin L. Osika, Jr. 2,469,358 10,211
- ---------------------------------------------------
William H. ("Hank") Rothwell 2,469,464 10,105
- ---------------------------------------------------
No other matters were submitted to be voted upon by the stockholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit 27 - Financial Data Schedule for electronic filers is filed with this
Form 10-QSB pursuant to Item 601(c) of Regulation S-B.
No reports on Form 8-K were filed during the period covered by this Form 10-QSB.
<PAGE>
Form 10-QSB
United Park City Mines Company
June 30, 1996
Page 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
United Park City Mines Company
--------------------------------
(Registrant)
/s/ Edwin L. Osika, Jr. /s/ Dale J. Harrison
------------------------ ------------------------
Edwin L. Osika, Jr. Dale J. Harrison
Executive Vice President, Controller
Secretary, and Treasurer (Chief Accounting Officer)
(Principal Financial Officer and
Duly Authorized Officer)
Date: August 13, 1996
---------------
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and consolidated statement of operations for the
quarter ended June 30, 1996 and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 157,537
<SECURITIES> 0
<RECEIVABLES> 55,464
<ALLOWANCES> 0
<INVENTORY> 100,498
<CURRENT-ASSETS> 925,789
<PP&E> 8,920,558
<DEPRECIATION> 3,696,513
<TOTAL-ASSETS> 17,434,245
<CURRENT-LIABILITIES> 1,669,851
<BONDS> 0
0
0
<COMMON> 27,015
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 17,434,245
<SALES> 1,142,000
<TOTAL-REVENUES> 3,037,616
<CGS> 588,983
<TOTAL-COSTS> 588,983
<OTHER-EXPENSES> 2,740,010
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,030
<INCOME-PRETAX> (309,407)
<INCOME-TAX> 0
<INCOME-CONTINUING> (309,407)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (309,407)
<EPS-PRIMARY> (0.13)
<EPS-DILUTED> (0.13)
</TABLE>
