SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For Quarter Ended DECEMBER 31, 1998 Commission File No. 0-1957
UPTOWNER INNS, INC.
Exact name of registrant as specified in its charter
West Virginia 55-0457171
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification Number
1415 4th Avenue, Huntington, West Virginia 25701
Address of principal executive office Zip Code
Registrants telephone number, including area code (304) 525-7741
Indicate by check mark whether 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 requirement for the past 90 days.
X Yes No
Indicate the number of Shares outstanding of each of the Issuer's classes
of Common Stock, as of the close of the period covered by this report.
Class Outstanding at DECEMBER 31, 1998
Common Stock-$.50 par value 1,583,563 Shares
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998 AND 1997
ASSETS
DECEMBER 31, JUNE 30,
1998 1997 1998
(Unaudited) (Unaudited)
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CURRENT ASSETS:
Cash $ 271,028 $ 105,938 $ 90,015
Accounts & Notes Rec. 159,614 26,537 23,726
Inventories 15,936 8,195 7,362
Prepaid Expenses 32,604 32,706 51,550
TOTAL CURRENT ASSETS 479,182 173,376 172,653
INVESTMENTS & FUNDS
Notes Receivable 79,832 -0- -0-
TOTAL INVESTMENTS & FUNDS 79,832 -0- -0-
PROPERTY, PLANT AND EQUIPMENT
Land 1,480,612 1,554,112 1,554,112
Building & Improvement 10,637,720 4,989,345 4,989,345
Construction in Progress -0- 3,145,929 5,580,717
Furniture & Equipment 2,452,081 1,463,768 2,250,473
TOTAL 14,570,413 11,153,154 14,374,647
Less: Accumulated Depreciation
and Amortization 3,773,495 3,719,834 3,797,872
TOTAL PROPERTY, PLANT
AND EQUIPMENT 10,796,918 7,433,320 10,576,775
OTHER ASSETS:
Deposits and Other 130,074 127,921 129,287
TOTAL OTHER ASSETS 130,074 127,921 129,287
TOTAL ASSETS 11,486,006 7,734,617 10,878,715
</TABLE>
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998 AND 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, JUNE 30,
1998 1997 1998
(Unaudited) (Unaudited)
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RENT LIABILITIES:
Accounts Payable $ 551,231 $ 610,609 $ 517,587
Accrued Liabilities 114,757 107,052 145,809
Taxes Other Than Federal
Income Taxes 202,682 137,076 200,399
Notes Payable 34,000 -0- -0-
Current Portion Long-Term Debt 1,021,925 272,482 996,925
TOTAL CURRENT LIABILITIES 1,924,595 1,127,219 1,860,720
LONG-TERM LIABILITIES
Notes & Mortgages Payable 7,247,145 4,415,761 6,931,165
TOTAL LONG-TERM LIABILITIES 7,247,145 4,415,761 6,931,165
TOTAL LIABILITIES 9,171,740 5,542,980 8,791,885
STOCKHOLDER'S EQUITY
Common Stock, par value $0.50 per
share; authorized - 5,000,000
shares; issued 1,583,563 791,782 791,782 791,782
Additional Paid-In
Capital 1,032,290 1,032,290 1,032,290
Retained Earnings 490,194 367,565 262,758
TOTAL STOCKHOLDER'S
EQUITY 2,314,266 2,191,637 2,086,830
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 11,486,006 7,734,617 10,878,715
</TABLE>
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE PERIODS ENDED DECEMBER 31, 1998 AND 1997
THREE MONTHS ENDED SIX MONTHS ENDED
12/31/98 12/31/97 12/31/98 12/31/97
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REVENUES:
Rooms $ 782,377 $ 217,030 $ 1,173,972 $ 466,342
Food & Beverage 104,306 87,261 179,676 149,770
Telephone 10,524 6,777 19,214 14,603
Rents 57,962 65,465 118,036 130,399
Other 14,711 15,354 40,467 23,096
TOTAL REVENUE 969,880 391,887 1,531,365 784,210
COSTS AND EXPENSES:
Cost of Sales 60,183 43,095 97,932 76,157
Salaries & Wages 238,531 105,019 427,461 208,028
Other 97,519 51,777 146,969 80,713
General & Administrative 34,901 12,862 69,661 28,092
Advertising 8,717 4,756 19,067 14,609
Utilities 44,177 26,842 84,028 58,488
Repair & Maintenance 20,869 14,318 41,223 30,164
Interest 202,359 48,067 316,281 97,671
Taxes & Licenses 63,200 50,483 113,496 90,090
Insurance 28,183 14,303 49,828 27,257
Deprec. & Amort. 92,832 41,822 151,245 93,777
TOTAL COST & EXPENSES 891,471 413,344 1,517,191 805,046
OPERATING INCOME (LOSS) 78,409 (21,457) 14,174 (20,836)
OTHER INCOME:
Interest Income 783 -0- 1,333 -0-
Gain on Sale of Assets 36,771 -0- 211,929 -0-
TOTAL OTHER INCOME 37,554 -0- 213,262 -0-
NET INCOME (LOSS)
BEFORE TAXES 115,963 (21,457) 227,436 (20,836)
FEDERAL INCOME TAXES
Provision for Taxes
on Income -0- -0- -0- -0-
Deferred Federal
Income Taxes -0- -0- -0- -0-
TOTAL FEDERAL INCOME
TAXES -0- -0- -0- -0-
TOTAL NET INCOME (LOSS) 115,963 (21,457) 227,436 (20,836)
EARNINGS PER SHARE .07 (.01) .14 (.01)
DIVIDENDS PER SHARE -0- -0- -0- -0-
</TABLE>
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<PAGE>
UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
1998 1997
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CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Accrual Basis; from
Statement of Income) $ 227,436 $ (20,836)
Add (Deduct) to Reconcile Net Income to
Net Cash Flow:
Accounts Receivable (Increase) Decrease (135,888) (1,334)
Inventories (Increase) Decrease (8,574) (2,199)
Prepaid Expenses Decrease (Increase) 18,946 18,733
Accounts Payable (Decrease) Increase 33,644 (24,702)
Notes Payable (Decrease) Increase 34,000 -0-
Accrued Liabilities (Decrease) Increase (31,052) 3,981
Taxes Other Than Federal Income Tax
Increase (Decrease) 2,283 (55,207)
Increase in Deposits (787) -0-
Depreciation Expense 151,245 93,868
Gain on Sale of Assets (211,929) -0-
NET CASH INFLOWS FROM OPERATIONS 79,324 12,304
CASH FLOW FROM INVESTING ACTIVITIES:
From Collection on Notes Receivable 4,668 -0-
From Sale of Assets 240,625 -0-
From Purchase of Operational Assets (484,584) (1,447,653)
NET CASH INFLOW (OUTFLOW) FROM INVESTING
ACTIVITIES (239,291) (1,447,653)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of Long-Term Debt 476,556 1,346,308
Payment on Notes and Mortgages (135,576) (50,448)
NET CASH INFLOW (OUTFLOW) FROM FINANCING
ACTIVITIES 340,980 1,295,860
Net Increases (Decreases) in Cash Plus Cash
Equivalents for the Six Months 181,013 (139,489)
Cash Plus Cash Equivalents at July 1 90,015 245,427
Cash Plus Cash Equivalents at December 31 271,028 105,938
Cash Paid for Interest in the Six Months 334,848 97,671
Cash Paid for Income Taxes in The Six Months -0- -0-
</TABLE>
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UPTOWNER INNS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998
1. The financial statements presented reflect UpTowner Inns, Inc.,
and its consolidated subsidiary: Motel and Restaurant Supply.
2. The foregoing statements are unaudited; however, in the opinion
of Management, all adjustments (comprising only normal recurring
accruals) necessary for a fair presentation of the financial
statements have been included. A summary of the Corporation's
significant accounting policies is set forth in Note 1 to the
Consolidated Financial Statements in the Corporation's Annual
Report to shareholders and Form 10-K for June 30, 1998.
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UPTOWNER INNS, INC., AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1998
With the continued success of the new facility opened in August, 1998,
the revenues for six months have reached $.14 per share (up from a loss of
$.01 in the six month period last year). The revenues from rooms increased
152% due mainly to the room revenues of the new hotel. Other revenues
increased due to the new operation adding food and beverage income, telephone
income and other income. The rent revenues continue to decrease (down 9%)
due to the sale of some of the rental properties. These sales created almost
$212,000 of the $227,000 reported; however, the operating income of the
second quarter reached $78,409 (compared to a loss of $21,457 in the same
period in 1997). The expenses are up 88% with very large increases due to
more personnel and higher overhead to operate the new facility. The debt
structure is substantially higher, which has resulted in a 224% increase
in interest expenses.
The liquidity improved slightly from.15 to .25 comparing December 31,
1997 and December 31, 1998. It improved from .09 to .25 since June 30, 1998.
The Statement of Cash Flows indicates a continued improvement in the cash
balance, but the increase was mainly due to increased borrowing. The
liquidity is likely to weaken further in the next quarter and then improve
when the travel season returns. Efforts to restructure debt continue and
should be completed in the next quarter, but the results will be less than
needed to restore the liquidity to a favorable position.
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<PAGE>
UPTOWNER INNS, INC., AND SUBSIDIARIES
SIGNATURES
DECEMBER 31, 1998
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.
UPTOWNER INNS, INC.
(Registrant)
Date: January 26, 1999 By /s/ Violet Midkiff
Violet Midkiff
President
Date: January 26, 1999 By /s/ James R. Camp
James R. Camp
Treasurer
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1998
<CASH> 271,028
<SECURITIES> 0
<RECEIVABLES> 159,614
<ALLOWANCES> 0
<INVENTORY> 15,936
<CURRENT-ASSETS> 479,182
<PP&E> 14,570,413
<DEPRECIATION> 3,773,495
<TOTAL-ASSETS> 11,486,006
<CURRENT-LIABILITIES> 1,924,595
<BONDS> 0
0
0
<COMMON> 791,782
<OTHER-SE> 1,032,290
<TOTAL-LIABILITY-AND-EQUITY> 11,486,006
<SALES> 104,306
<TOTAL-REVENUES> 969,880
<CGS> 60,183
<TOTAL-COSTS> 891,471
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 202,359
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 78,409
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115,963
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
