<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
[_] TRANSITION REPORT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO _______________.
333-09437
(COMMISSION FILE NUMBER)
COBBLESTONE HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 33-0597600
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3702 VIA DE LA VALLE, SUITE 202
DEL MAR, CA 92014
(ADDRESS OF PRINCIPAL OFFICES) (ZIP CODE)
(619) 794-2602
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
PERIOD)
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 [_].
AS OF MAY 15, 1997, 1,722,449 SHARES OF COBBLESTONE HOLDINGS, INC. COMMON
STOCK, PAR VALUE $.01 PER SHARE, WERE OUTSTANDING.
<PAGE>
COBBLESTONE HOLDINGS, INC.
SECOND QUARTER REPORT ON FORM 10-Q
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1997 (Unaudited) and September 30, 1996............................. 1
Consolidated Statements of Operations (Unaudited) -
Three and six months ended March 31, 1997 and 1996............................ 2
Consolidated Statements of Cash Flows (Unaudited) -
Six months ended March 31, 1997 and 1996...................................... 3
Notes to Consolidated Financial Statements (Unaudited) - March 31, 1997......... 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................... 6
Part II. Other Information
Item 6. Exhibit and Reports on Form 8-K.................................................. 10
Signatures......................................................................................... 11
</TABLE>
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
COBBLESTONE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, SEPTEMBER 30,
1997 1996
------------- --------------
(UNAUDITED) (NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................... $ 1,571,095 $ 6,578,946
Accounts receivable, net............................................ 3,761,072 2,868,190
Current portion of notes receivable, net............................ 1,697,339 1,729,875
Inventory........................................................... 2,918,058 2,202,481
Prepaid expenses and other current assets........................... 1,077,380 1,170,884
------------ ------------
Total current assets................................. 11,024,944 14,550,376
Property, equipment and leasehold interests, net......................... 149,334,495 139,541,003
Notes receivable, net.................................................... 4,032,741 3,889,857
Intangible assets, net................................................... 3,754,692 3,898,185
Other assets, net........................................................ 6,441,488 6,618,684
------------ ------------
$174,588,360 $168,498,105
============ ============
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Accounts payable.................................................... $ 1,907,857 $ 4,101,736
Accrued payroll and related expenses................................ 1,774,647 2,091,719
Accrued interest expense............................................ 2,830,413 2,683,332
Accrued property taxes.............................................. 613,572 1,364,891
Deferred revenue.................................................... 1,849,215 1,460,028
Current portion of long-term debt and capital lease obligations..... 444,177 738,981
Current portion of deferred purchase price.......................... 205,353 387,792
Income taxes payable................................................ 76,884 94,431
Other current liabilities........................................... 1,197,833 1,394,352
------------ ------------
Total current liabilities............................ 10,899,951 14,317,262
Long-term debt and capital lease obligations............................. 122,411,510 108,494,952
Note payable to stockholder/officer...................................... 228,543 224,787
Deferred purchase price.................................................. 640,474 730,941
Long-term deferred revenue............................................... 2,264,969 2,423,707
Deferred income taxes.................................................... 4,184,000 4,184,000
Minority interest........................................................ 378,585 380,985
Redeemable preferred stock, $.01 par value
Authorized shares--10,000,000
Issued and outstanding shares--5,220,376 at March 31, 1997
and September 30, 1996
Liquidation preference of $43,075,700 at March 31, 1997 and
September 30, 1996............................................. 42,241,169 42,241,169
Net capital deficiency:
Common stock, $.01 par value:
Authorized shares--5,000,000
Issued and outstanding shares--1,722,449 at March 31, 1997 and
September 30, 1996........................................ 17,224 17,224
Paid-in capital..................................................... 5,388,983 5,388,983
Accumulated deficit................................................. (14,067,048) (9,905,905)
------------ ------------
Net capital deficiency (8,660,841) (4,499,698)
------------ ------------
$174,588,360 $168,498,105
============ ============
</TABLE>
Note: The balance sheet at September 30, 1996 has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for financial statements.
See accompanying notes.
1
<PAGE>
COBBLESTONE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
----------------------------- ----------------------------
1997 1996 1997 1996
----------------------------- ----------------------------
<S> <C> <C> <C> <C>
Operating revenues:
Golf revenues....................................... $13,944,044 $10,364,700 $25,759,281 $19,738,164
Food and beverage revenues.......................... 2,712,508 1,899,586 5,761,745 4,094,965
Pro shop sales...................................... 1,271,721 995,894 2,887,937 2,134,053
Other............................................... 767,713 731,776 1,273,855 1,039,499
----------- ----------- ----------- -----------
Total operating revenues.................. 18,695,986 13,991,956 35,682,818 27,006,681
Operating expenses:
Golf course operations.............................. 11,112,728 7,808,192 22,322,110 16,256,240
Cost of food and beverage........................... 889,832 669,111 1,831,492 1,415,715
Cost of pro shop sales.............................. 852,718 679,176 1,858,916 1,413,254
General and administrative.......................... 947,782 884,815 1,916,329 1,723,545
Depreciation and amortization....................... 2,247,888 1,600,069 4,456,527 3,518,380
----------- ----------- ----------- -----------
Total operating expenses.................. 16,050,948 11,641,363 32,385,374 24,327,134
----------- ----------- ----------- -----------
Income from operations........................................ 2,645,038 2,350,593 3,297,444 2,679,547
Interest expense, net......................................... (3,771,750) (2,544,415) (7,375,271) (5,118,027)
----------- ----------- ----------- -----------
Loss before income taxes...................................... (1,126,712) (193,822) (4,077,827) (2,438,480)
Provision for income taxes.................................... 60,436 15,740 83,316 23,400
----------- ----------- ----------- -----------
Net loss...................................................... $(1,187,148) $ (209,562) $(4,161,143) $(2,461,880)
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
2
<PAGE>
COBBLESTONE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
---------------------------------
1997 1996
---------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss.................................................................... $ (4,161,143) $(2,461,880)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization.......................................... 4,852,222 3,907,432
Deferred interest...................................................... 2,135,554 --
Provision for doubtful accounts........................................ (228,999) (232,575)
Changes in assets and liabilities:
Notes and accounts receivable................................ (313,031) (694,583)
Inventory.................................................... (610,472) (403,915)
Prepaid expenses and other assets............................ (52,227) 202,332
Accounts payable, accrued liabilities and deferred
revenue..................................................... (3,621,692) (1,502,928)
----------- -----------
Net cash used in operating activities....................................... (1,999,788) (1,186,117)
INVESTING ACTIVITIES
Acquisition-related costs................................................... (9,139,627) --
Additions to property, equipment and leasehold interests.................... (4,070,256) (4,811,024)
------------ -----------
Net cash used in investing activities....................................... (13,209,883) (4,811,024)
FINANCING ACTIVITIES
Proceeds from long-term debt................................................ 11,964,000 8,300,000
Debt issuance costs and other debt-related costs............................ -- (186,221)
Principal payments on long-term debt and capital leases..................... (1,489,274) (969,464)
Payments on deferred purchase price......................................... (272,906) (376,979)
------------ -----------
Net cash provided by financing activities................................... 10,201,820 6,767,336
Net increase (decrease) in cash and cash equivalents........................ (5,007,851) 770,195
Cash and cash equivalents at beginning of period............................ 6,578,946 820,608
------------ -----------
Cash and cash equivalents at end of period.................................. $ 1,571,095 $ 1,590,803
============ ===========
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest............................................................... $ 4,697,002 $ 4,728,552
============ ===========
Income taxes, net...................................................... $ 100,863 $ 903,400
============ ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Capital leases entered into................................................. $ 1,003,080 $ 1,834,017
============ ===========
</TABLE>
See accompanying notes.
3
<PAGE>
COBBLESTONE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
1. BASIS OF PRESENTATION
Cobblestone Holdings, Inc. (the "Company"), a Delaware corporation, was
incorporated on January 18, 1994 by shareholders of Cobblestone Golf Group, Inc.
("CGGI"). On January 31, 1994, the Company issued shares of its common and
preferred stock in exchange for all of the shares of CGGI. The Company, through
its wholly-owned subsidiary CGGI, owns and operates golf courses in the United
States, with a current portfolio of 23 golf properties including private country
clubs, semi-private clubs and public (or daily fee) courses. The Company's
courses are concentrated in clusters near metropolitan areas primarily in the
Sunbelt states (including Arizona, California and Texas) which have large
golfing populations and attractive climates.
The Company's business consists primarily of operating golf courses and
related facilities, with revenue generated from membership fees and dues at
private country clubs, greens fees, food and beverage services, golf cart
rentals, retail merchandise sales, driving range fees and lodging fees. The
Company owns 17 courses, leases four courses (subject to long-term leases in
excess of 20 years, including extension options), leases one driving range and
pro shop facility and manages one additional course. The Company's portfolio
includes ten private country clubs, eight public facilities and five semi-
private facilities.
Seasonal weather conditions as well as the timing of new course purchases or
leases may cause the Company's results of operations to vary from quarter to
quarter.
The Company has acquired certain golf facilities through its wholly-owned and
majority-owned subsidiaries. The consolidated financial statements include the
accounts of the Company and such subsidiaries. Intercompany balances and
transactions have been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month period ended March
31, 1997 are not necessarily indicative of the results that may be expected for
the year ended September 30, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended September 30, 1996.
2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
4
<PAGE>
COBBLESTONE HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997
(UNAUDITED)
3. NEW ACCOUNTING STANDARDS
Effective October 1, 1996, the Company adopted SFAS No. 121, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
("SFAS 121"). SFAS 121 requires impairment losses to be recorded on long-lived
assets used in operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets are less than
the assets' carrying amount. SFAS 121 also addresses the accounting for long-
lived assets that are expected to be disposed of. The adoption had no impact on
the Company's financial position or results of operations.
Effective October 1, 1996, the Company adopted SFAS No. 123, Accounting for
Stock-Based Compensation ("SFAS 123"). SFAS 123 established the fair value-based
method of accounting for stock-based compensation arrangements under which
compensation cost is determined using the fair value of the stock option at the
grant date and the number of options vested, and is recognized over the periods
in which the related services are rendered. The Company has elected to continue
with the current intrinsic value-based method, as allowed by SFAS 123, and will
disclose the pro forma effect of adopting the fair value based method in future
fiscal years beginning with the fiscal year ending September 30, 1997.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Operating Revenue. Operating revenue increased to $18.7 million for the
three months ended March 31, 1997 from $14.0 million for the comparable prior
year period, an increase of $4.7 million or 33.6%. Of this increase, $3.0
million is attributable to operating revenue for the two courses acquired by the
Company in June and July of 1996 and $0.7 is attributable to the operating
revenue for the course acquired by the Company in February of 1997. The
remaining $1.0 million is attributable to increased revenue from the Company's
other facilities.
Course-level Operating Expenses. Course-level operating expenses, which
include costs of golf course operations (e.g., salaries, taxes and utilities),
costs of food and beverage sales and costs of pro shop sales increased to $12.9
million for the three months ended March 31, 1997 from $9.2 million for the
comparable prior year period, an increase of $3.7 million or 40.4%. Of this
increase, $2.3 million is attributable to course-level operating expenses for
the two courses acquired by the Company in June and July of 1996 and $0.4 is
attributable to course-level operating expenses for the course acquired by the
Company in February of 1997. The remaining $1.0 million is attributable to
increased course-level operating expenses from the Company's other facilities.
General and Administrative Expenses. General and administrative expenses
primarily consist of corporate salaries and related expenses and legal and
accounting fees. General and administrative expenses were $0.9 for both the
three months ended March 31, 1997 and 1996. Despite the expanded operations, the
Company has been able to maintain its general and administrative expenses at a
relatively constant level. General and administrative expenses as a percentage
of operating revenue was 5.1% for the three months ended March 31, 1997, a
decrease from 6.3% for the comparable prior year period.
Depreciation and Amortization Expense. Depreciation and amortization
expense increased to $2.2 million for the three months ended March 31, 1997 from
$1.6 million for the comparable prior year period, an increase of $0.6 million
or 40.5%. Of this increase, approximately $0.2 million is attributable to the
inclusion of the two courses acquired in June and July of 1996, and the
remainder is due to depreciation and amortization expense on various capital
projects completed since March 31, 1996.
Income from Operations. Income from operations increased to $2.6 million
for the three months ended March 31, 1997 from $2.4 million for the comparable
prior year period, primarily due to the factors described above. Income from
operations as a percentage of operating revenue was 14.1% for the three month
period ended March 31, 1997, a decrease from 16.8% for the comparable prior year
period. The decrease primarily is due to $0.3 million in rent expense associated
with the lease of the course acquired in July of 1996.
Interest Expense, Net. Interest expense, net, increased to $3.8 million for
the three months ended March 31, 1997 from $2.5 million for the comparable prior
period, an increase of $1.3 million or 48.2%. The increase primarily is a result
of a higher level of outstanding debt due to a unit offering by the Company in
June of 1996.
6
<PAGE>
Provision for Income Taxes. The Company recorded a $60,000 provision for
income taxes, which reflects the fact that certain subsidiaries generate taxable
income in individual states and localities notwithstanding the Company's
consolidated loss for financial reporting purposes.
Net loss. Net loss increased to $1.2 million for the three months ended
March 31, 1997 from $0.2 million for the comparable prior year period, primarily
due to the factors described above.
SIX MONTHS ENDED MARCH 31, 1997 COMPARED TO SIX MONTHS ENDED MARCH 31, 1996
Operating Revenue. Operating revenue increased to $35.7 million for the
six months ended March 31, 1997 from $27.0 million for the comparable prior year
period, an increase of $8.7 million or 32.1%. Of this increase, $6.0 million is
attributable to operating revenue for the two courses acquired by the Company in
June and July of 1996 and $0.7 is attributable to the operating revenue for the
course acquired by the Company in February, 1997. The remaining $2.0 million is
attributable to increased revenue from the Company's other facilities.
Year over year comparisons at certain of the Company's private clubs are
difficult. During the second half of fiscal 1995 and into fiscal 1996, the
Company had established marketing programs to take advantage of the pent-up
demand in areas surrounding certain of its private clubs. As a result, while
revenues have generally increased at the Company's public and private facilities
for the six months ended March 31, 1997 as compared to the six months ended
March 31, 1996, initiation fee revenues at certain of the Company's private
clubs have decreased.
Course-level Operating Expenses. Course-level operating expenses, which
include costs of golf course operations (e.g., salaries, taxes and utilities),
costs of food and beverage sales and costs of pro shop sales increased to $26.0
million for the six months ended March 31, 1997 from $19.1 million for the
comparable prior year period, an increase of $6.9 million or 36.3%. Of this
increase, $4.8 million is attributable to course-level operating expenses for
the two courses acquired by the Company in June and July of 1996 and $0.4 is
attributable to course-level operating expenses for the course acquired by the
Company in February of 1997. The remaining $1.7 million is attributable to
increased course-level operating expenses from the Company's other facilities.
General and Administrative Expenses. General and administrative expenses
primarily consist of corporate salaries and related expenses and legal and
accounting fees. General and administrative expenses increased to $1.9 million
for the six months ended March 31, 1997 from $1.7 million for the comparable
prior year period, an increase of $0.2 million or 11.2%. The increase in expense
was related to additional overhead to support the Company's expanded operations
during the first quarter of fiscal 1997. General and administrative expenses
were relatively constant for the second quarter of fiscal 1997 and 1996. General
and administrative expenses as a percentage of operating revenue was 5.4% for
the six months ended March 31, 1997, a decrease from 6.4% for the comparable
prior year period.
Depreciation and Amortization Expense. Depreciation and amortization
expense increased to $4.5 million for the six months ended March 31, 1997 from
$3.5 million for the comparable prior year period, an increase of $1.0 million
or 26.7%. Of this increase, approximately $0.3 million is attributable to the
inclusion of the two courses acquired in June and July of 1996, and the
remainder is due to depreciation and amortization expense on various capital
projects completed since March 31, 1996.
Income from Operations. Income from operations increased to $3.3 million
for the six months ended March 31, 1997 from $2.7 million for the comparable
prior year period, primarily due to the factors described above. Income from
operations as a percentage of operating revenue was 9.2% for the six month
period ended March 31, 1997, a decrease from 9.9% for the comparable prior year
period. The decrease primarily is due to $0.6 million in rent expense associated
with the lease of the course acquired in July of 1996.
7
<PAGE>
Interest Expense, Net. Interest expense, net, increased to $7.4 million for
the six months ended March 31, 1997 from $5.1 million for the comparable prior
period, an increase of $2.3 million or 44.1%. The increase primarily is a result
of a higher level of outstanding debt due to a unit offering by the Company in
June of 1996.
Provision for Income Taxes. The Company recorded an $83,000 provision for
income taxes, which reflects the fact that certain subsidiaries generate taxable
income in individual states and localities notwithstanding the Company's
consolidated loss for financial reporting purposes.
Net loss. Net loss increased to $4.2 million for the six months ended March
31, 1997 from $2.5 million for the comparable prior year period, primarily due
to the factors described above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary uses of cash are to fund debt service and maintenance
capital expenditures at its existing facilities (such as landscaping and
purchasing golf cart fleets). The Company also implements one-time upgrade and
renovation capital expenditures at their existing facilities in order to enhance
their appeal to customers and members and to generate additional revenues and
cash flow. Examples of these expenditures are the addition of courses (including
nine hole additions) to existing facilities to increase capacity and clubhouse
renovations to support increased dues and fees. These expenditures are generally
of a non-recurring nature. In addition, the Company implements strategic capital
expenditure programs which enable it to reduce course level operating costs and
improve the efficiency of operations, such as improving the irrigation system,
acquiring more efficient maintenance equipment and other programs which enhance
the marketability and/or reduce the operating expenses of existing facilities.
As part of its business strategy, the Company will require cash to continue to
acquire, lease or manage additional golf courses and the related facilities and
to complete any targeted renovations. The Company expended $9.1 million on
acquisition-related costs and $4.1 million on capital improvements during the
six months ended March 31, 1997. As of March 31, 1997, the Company had
approximately $3.6 million of long-term commitments for one-time capital
expenditures with respect to a golf facility.
Based upon the current level of operations and anticipated growth, the
Company believes that cash flow from operations, together with available
borrowings under the Company's credit facility and other sources of liquidity,
will be adequate to meet the Company's anticipated future requirements for
working capital, capital expenditures and scheduled payments of principal and
interest on its indebtedness. There can be no assurance, however, that the
Company's business will generate sufficient cash flow from operations or that
future working capital borrowings will be available in an amount sufficient to
enable the Company to service its indebtedness or make necessary capital
expenditures.
The Company intends to fund these expenditures primarily with operating
cash flow and borrowings under its credit facility. The credit facility provides
for borrowings of up to $50.0 million, of which $45.0 million is available to
fund future acquisitions of golf courses and capital expenditures at such
courses and certain capital improvements at existing courses, and $5.0 million
of which is available for general working capital purposes. The total borrowing
availability under the $45.0 million portion of the credit facility will
decrease over the term of the facility beginning September 30, 1998. The credit
facility provides that the Company may not make any acquisitions or upgrade
capital expenditures when Funded Debt plus certain projected upgrade capital
expenditures is greater than 6.5x of Adjusted EBITDA (each as defined in the
credit facility), with certain adjustments for notes receivable, reducing over
time. This 6.5x Funded Debt to Adjusted EBITDA test is reduced in subsequent
years. The credit facility also imposes other limitations on the ability of the
Company with respect to borrowings. In addition, as of March 31, 1997, the
Company had $1.6 million of cash on hand to meet its working capital and other
needs.
Historically, the Company has financed its operations through borrowings
under bank credit facilities and equity contributions by its stockholders. As of
March 31, 1997, the Company's stockholders have invested a total of $47.6
million of equity to fund the expansion of the Company and its golf course
portfolio.
8
<PAGE>
For the six month period ended March 31, 1997, net cash used by operating
activities was $2.0 million versus $1.2 million in the comparable prior year
period. The primary component of this change is the payment of accounts payable
balances.
During the six month period ended March 31, 1997, net cash used in
investing activities was $13.2 million versus $4.8 million in the prior
comparable period. Expenditures for the six months ended March 31, 1997
consisted of $9.1 million in acquisition-related costs and $4.1 million in
capital expenditures.
During the six month period ended March 31, 1997, net cash provided by
financing activities was $10.2 million versus $6.8 million in the prior
comparable period. During the six months ended March 31, 1997, the Company
borrowed $9.0 million under its acquisition facility and $3.0 under its working
capital revolver. During that same period, the Company repaid $1.2 million under
its working capital revolver and paid $0.6 million in principal of its other
existing obligations. At March 31, 1997, borrowings under the $50 million credit
facility totaled $10.8 million.
RECENT DEVELOPMENTS
In February of 1997, the Company purchased a 36-hole private country club
located near Tampa, Florida. Additionally, the Company purchased an 18-hole
public golf course located near Atlanta, Georgia in April of 1997 bringing the
total number of golf properties in the Company's portfolio to 24.
9
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the six
month period ended March 31, 1997.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COBBLESTONE HOLDINGS, INC.
Date: May 15, 1997 By: /s/ Stefan C. Karnavas
----------------------------------
Stefan C. Karnavas
Chief Financial Officer (Duly Authorized
Officer and Principal Financial and
Accounting Officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 1,571,095
<SECURITIES> 0
<RECEIVABLES> 10,902,570
<ALLOWANCES> 2,346,496
<INVENTORY> 2,918,058
<CURRENT-ASSETS> 11,024,944
<PP&E> 168,640,796
<DEPRECIATION> 19,477,391
<TOTAL-ASSETS> 174,588,360
<CURRENT-LIABILITIES> 10,899,951
<BONDS> 0
42,241,169
0
<COMMON> 17,224
<OTHER-SE> (8,678,065)
<TOTAL-LIABILITY-AND-EQUITY> 174,588,360
<SALES> 8,649,682
<TOTAL-REVENUES> 35,682,818
<CGS> 3,690,408
<TOTAL-COSTS> 32,385,374
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 138,855
<INTEREST-EXPENSE> 7,375,271
<INCOME-PRETAX> (4,077,827)
<INCOME-TAX> 83,316
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