<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
{X} Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarter Ended March 31, 1997.
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 000-29032
---------
CHAMPION COMMUNICATION SERVICES, INC.
DELAWARE 76-0448005
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1610 WOODSTEAD COURT
SUITE 330 77380
(Address of Principal Offices) (Zip Code)
(281) 362-0144
(Registrant's Telephone Number, including area code.)
Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class Name of Exchange on which Registered
NONE NONE
Securities registered under Section 12(g) of the Exchange Act:
Title of Each Class Name of Exchange on which Registered
Common Stock, par value $.01 per share
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 periods 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 [ ]
Indicate by check mark if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of the Form 10-KSB or any amendment to this Form 10-KSB. Yes [X] No [ ]
State issuer's revenues for is most recent fiscal year. $7,136,582.
As of May 13, 1997, there were 6,103,412 shares of common stock, $0.01 par
value, of the registrant issued and outstanding.
<PAGE> 2
CHAMPION COMMUNICATION SERVICES, INC.
INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
March 31, 1997 and December 31, 1996............................... 1
Statements of Operations -
Three Months Ended March 31, 1997 and 1996 and
Year Ended December 31, 1996....................................... 2
Statements of Cash Flows -
Three Months Ended March 31, 1997 and 1996 and
Year Ended December 31, 1996....................................... 3
Statement of Stockholders' Equity -
Three Months Ended March 31, 1997 and
Year Ended December 31, 1996....................................... 4
Notes to Interim Financials Statements.............................5-10
Earnings Per Share Computations -
Three Months Ended March 31, 1997 and 1996 and
Year Ended December 31, 1996....................................... 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of operations.............12-13
SIGNATURE............................................................................ 14
</TABLE>
<PAGE> 3
CHAMPION COMMUNICATION SERVICES, INC.
BALANCE SHEETS
March 31, 1997 and December 31, 1996
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1997 1996
--------------- ---------------
<S> <C> <C>
Current Assets Unaudited
Cash and cash equivalents $ 1,139,506 $ 1,087,440
Accounts receivable, net of allowance of $88,235 and $51,606 at 537,137 900,061
March 31, 1997 and December 31, 1996 respectively
Inventory 214,951 457,409
Prepaid expenses and other 85,013 70,315
--------------- ---------------
Total Current Assets 1,976,607 2,515,225
--------------- ---------------
Communications equipment and related assets, net 5,192,151 5,475,081
--------------- ---------------
Other assets 675,927 607,999
--------------- ---------------
$ 7,844,685 $ 8,598,305
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 489,673 $ 446,525
Accrued expenses 823,985 690,718
Deferred revenue 1,027,530 1,586,625
Current maturities of notes payable 182,884 185,785
Current maturities of note payable to stockholder -- 1,179,046
--------------- ---------------
Total Current Liabilities 2,524,072 4,088,699
--------------- ---------------
Long Term Liabilities
Notes payable 89,414 151,166
Note payable to stockholder -- 1,620,535
--------------- ---------------
Total Long Term Liabilities 89,414 1,771,701
--------------- ---------------
Stockholders' Equity
Common stock, $0.01 par value, 20,000,000 shares authorized,
6,103,412 shares issued and outstanding at 61,034 61,034
March 31, 1997 and December 31, 1996
Additional paid-in capital 5,166,184 5,166,184
Accumulated earnings (deficit) 3,981 (2,489,313)
--------------- ---------------
Total Stockholders' Equity 5,231,199 2,737,905
--------------- ---------------
$ 7,844,685 $ 8,598,305
=============== ===============
</TABLE>
1
See accompanying notes to financial statements.
<PAGE> 4
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS OF OPERATIONS
For the three months ended March 31, 1997 and 1996 and the
year ended December31, 1996
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996 1996
--------------- --------------- ---------------
Unaudited
<S> <C> <C> <C>
Revenues $ 5,195,027 $ 2,026,569 $ 7,136,582
--------------- --------------- ---------------
Operating expenses:
Cost of sales 1,578,279 1,459,929 5,226,733
Provision for doubtful accounts 33,000 27,042 117,000
Depreciation and amortization 219,822 188,839 799,870
General and administrative expenses 628,933 609,173 2,270,984
--------------- --------------- ---------------
Total Operating Expenses 2,460,034 2,284,983 8,414,587
--------------- --------------- ---------------
Operating Income (Loss) 2,734,993 (258,414) (1,278,005)
--------------- --------------- ---------------
Other income (expenses):
Net gain (loss) on disposal of fixed assets (189,730) 2,088 (78,230)
Interest income 9,702 5,481 18,774
Interest expense (61,671) (65,979) (281,503)
--------------- --------------- ---------------
Income (Loss) before income taxes 2,493,294 (316,824) (1,618,964)
Income taxes -- -- --
--------------- --------------- ---------------
Net income (loss) $ 2,493,294 $ (316,824) $ (1,618,964)
=============== =============== ===============
Weighted average common shares and common stock
equivalents outstanding 6,103,412 4,715,803 5,084,146
=============== =============== ===============
Net income (loss) per common share $ 0.41 $ (0.07) $ (0.32)
=============== =============== ===============
</TABLE>
2
See accompanying notes to financial statements.
<PAGE> 5
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS
OF CASH FLOWS
For the three months ended March 31, 1997, 1996
and the year ended December 31, 1996
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996 1996
------------- ------------- -------------
<S> <C> <C> <C>
Cash flows from operating activities: Unaudited
Net income (loss) $ 2,493,294 ($ 316,824) ($ 1,618,964)
Adjustments to reconcile net income (loss) to
net cash (used in)provided by operating activities:
Depreciation and amortization 219,822 188,839 799,870
Bad debt expense 33,000 24,000 117,000
Gain (loss) on disposal/sale of fixed assets 189,730 (2,088) 78,230
Change in assets and liabilities:
Accounts receivable 362,924 145,166 (27,441)
Inventory 242,458 (16,242) (215,336)
Prepaid expenses (14,698) (3,678) 84,876
Other assets (42,928) (115,791) (374,345)
Accounts payable 43,148 (45,846) (226,870)
Accrued expenses 133,267 (87,132) 265,321
Deferred revenue (559,095) (600,936) (122,544)
------------- ------------- -------------
Net cash (used in)provided by operating activities 3,100,922 (830,532) (1,240,203)
------------- ------------- -------------
Cash flows from investing activities:
Additions to property and equipment (255,238) (42,398) (375,497)
Proceeds from sale of fixed assets 70,616 -- 132,473
------------- ------------- -------------
Net cash used in investing activities (184,622) (42,398) (243,024)
------------- ------------- -------------
Cash flows from financing activities:
Proceeds from sale of stock -- -- 1,743,190
Proceeds from sale of warrants -- -- --
Proceeds from the issuance of subscribed stock -- 51,944 51,944
Repayment of notes payable (2,864,234) (90,756) (396,921)
------------- ------------- -------------
Net cash provided by financing activities (2,864,234) (38,812) 1,398,213
------------- ------------- -------------
Net increase in cash and cash equivalents 52,066 (911,742) (85,014)
Cash and cash equivalents at beginning of period 1,087,440 1,172,454 1,172,454
------------- ------------- -------------
Cash and cash equivalents at end of period $ 1,139,506 $ 260,712 $ 1,087,440
============= ============= =============
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest $ 87,710 $ 39,088 $ 186,709
============= ============= =============
</TABLE>
3
See accompanying notes to financial statements.
<PAGE> 6
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the three months ended March 31, 1997 and
For the years ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
Common Common Additional Total
stock Common stock paid-in Accumulated Stockholders'
shares stock subscribed capital deficit Equity
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 4,258,000 $ 37,540 $ 5,040 $ 2,086,420 ($ 12,350) $ 2,116,650
------------ ------------ ------------ ------------ ------------ ------------
Conversion of Common stock
subscribed to Common stock -- 5,040 (5,040) (5,981) -- (5,981)
Issuance of Common stock 437,085 4,371 -- 585,694 -- 590,065
Common stock subscribed -- -- 385 51,559 -- 51,944
Issuance of Common stock
warrants -- -- -- 719,000 -- 719,000
Net loss for 1995 -- -- -- -- (857,999) (857,999)
------------ ------------ ------------ ------------ ------------ ------------
Balance at December 31, 1995 4,695,085 $ 46,951 $ 385 $ 3,436,692 ($ 870,349) $ 2,613,679
============ ============ ============ ============ ============ ============
Conversion of Common stock
subscribed to Common stock 38,477 385 (385) -- -- --
Issuance of Common stock 769,850 7,698 -- 1,735,492 -- 1,743,190
Conversion of Common stock
warrants 600,000 6,000 -- (6,000) -- --
Net loss for 1996 -- -- -- -- (1,618,964) (1,618,964)
------------ ------------ ------------ ------------ ------------ ------------
Balance at December 31, 1996 6,103,412 $ 61,034 $ -- $ 5,166,184 ($ 2,489,313) $ 2,737,905
============ ============ ============ ============ ============ ============
Net income for 1997 (unaudited) -- -- -- -- 2,493,294 2,493,294
------------ ------------ ------------ ------------ ------------ ------------
Balance at March 31, 1997 6,103,412 $ 61,034 $ -- $ 5,166,184 $ 3,981 $ 5,231,199
============ ============ ============ ============ ============ ============
Unaudited
</TABLE>
4
See accompanying notes to financial statements.
<PAGE> 7
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
(a) Description of Business
Champion Communication Services, Inc. (the Company)
is a provider of high powered community repeater dispatch
services operating within the 450 - 512 MHz and 800 MHz
frequency band in the United States. The Company's customers
consist primarily of business and government agencies located
in both metropolitan and rural geographic regions. The
Company provides customers with equipment sales and service,
and radio rentals.
(b) Basis of Presentation
The accompanying financial statements have been
prepared in accordance with accounting principles generally
accepted in the United States. The differences between
accounting principles generally accepted in the United States
and Canada would not have a material impact on the
accompanying financial statements.
(c) Cash and Cash Equivalents
For purposes of the statements of cash flows, the
Company considers all highly liquid financial instruments
purchased with an original maturity of three months or less
to be cash equivalents.
(d) Inventory
The Company's inventory consists primarily of
two-way radios, parts and accessories. The Company uses the
average cost method of accounting for inventory. The balance
recorded at March 31, 1997 and December 31, 1996 is the lower
of average cost or market. The Company also included $278,000
of costs for spectrum to be sold in 1997 in the December 31,
1996 inventory balance.
(e) Communications Equipment and Related Assets
Communications equipment and related assets are
recorded at cost. Depreciation is computed on a straight-line
basis over the estimated useful lives of the assets ranging
from five years for other fixed assets to ten years for
communications equipment.
5
<PAGE> 8
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(1) Summary of Significant Accounting Policies, (continued)
(f) Income Taxes
In accordance with U.S. generally accepted
accounting principles, deferred tax assets and liabilities
are recognized for the future tax consequences attributable
to differences between the financial statement carrying
amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable
income in the years which those temporary differences are
expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the
enactment date.
(g) Fair Value of Financial Instruments
Fair value estimates are made at discrete points in
time based on relevant market information. These estimates
may be subjective in nature and involve uncertainties and
matters of significant judgment and therefore cannot be
determined with precision.
The Company believes that the carrying amounts of
its current assets and current liabilities approximate the
fair value of such items due to their short-term nature. The
carrying amount of long-term debt approximates its fair value
because the interest rates approximate market and there has
been no significant change in the credit risk of the Company.
(h) Revenue Recognition
The standard industry billing cycle for radio
dispatch service is generally for three, six and twelve month
intervals. The Company defers amounts billed in advance and
recognizes revenue as the related services are provided.
(i) Differences Between Generally Accepted Accounting Principles
in the United States and Canada
The Company prepares its financial statements in
accordance with generally accepted accounting principles in
the United States. The following summarizes significant
differences between United States and Canadian generally
accepted accounting principles:
6
<PAGE> 9
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(1) Summary of Significant Accounting Policies, (continued)
(i) Differences Between Generally Accepted Accounting Principles
in the United States and Canada, (continued)
(i) Income Taxes: Generally accepted accounting principles in
Canada require the deferred method of accounting for income
taxes with the calculation of deferred tax assets and
liabilities through the application of historical tax rates.
Benefits attributable to net operating loss carryforwards
cannot be recorded unless there is virtual certainty that
such net operating loss carryforwards will be utilized.
(ii) Earnings (Loss) per Common Share: Generally accepted
accounting principles in Canada require that common stock
equivalents not be included in the earnings (loss) per share
calculation. As noted above, common stock equivalents have
been ignored due to their antidilutive effect.
(2) Notes Payable
During the year ended December 31, 1996, the Company incurred
installment notes payable of $256,982 to finance certain communication
equipment purchases. At March 31, 1997 and December 31, 1996, the
total balance outstanding related to the installment notes payable was
$232,782 and $322,161, respectively. The notes are payable in monthly
installments and mature from 1997 to 1999. The notes bear interest at
rates ranging from 11% to 12.75% per year and are secured by
communications equipment.
During 1995, the Company entered into a revolving note
payable with a maximum credit line of $100,000 bearing interest at
17.9% after 90 days. At March 31, 1997 and December 31, 1996, the
outstanding balances on the credit line were $39,515 and $14,790,
respectively. The credit line is being used to finance the acquisition
of inventory and is repaid when inventory is sold or at the agreed
upon date. Each advance expires 360 days from the date of the advance.
In 1994, Champion Communications Company (CCC) advanced the
Company $3,177,506 for the acquisition of base stations and the
related customers. On November 15, 1995, $377,925 of the note and
$162,075 of accrued interest payable was converted to 400,000 shares
of common stock at $1.35 per share. The remaining balance of
$2,799,581 was paid in full in March 1997. The note bore interest at a
prime rate, (8.25% at December 31, 1996), and was secured by the
Company's communications equipment and spectrum. CCC is a Subchapter S
corporation, wholly owned by Albert F. Richmond, Chief Executive
Officer and a founding stockholder of the Company.
7
<PAGE> 10
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(2) Notes Payable, (continued)
The combined aggregate maturities of the installment notes
payable and the note payable to stockholder for each of the five years
following December 31, 1996 are as follows:
<TABLE>
<CAPTION>
<S> <C>
1997 $155,970
1998 76,524
1999 39,803
2000 -
2001 -
--------
$272,297
========
</TABLE>
(3) Related Party Transactions
No related party general and administrative expenses were
incurred during the year ended December 31, 1996. During the year
ended 1995, the Company incurred approximately $62,000 in general and
administrative expenses (primarily personnel charges) allocated from
Olympic Natural Gas Company, a company in which Albert F.
Richmond served as Chief Executive Officer during 1995.
Additionally, during 1995 the Company allocated approximately
$23,000 in general and administrative expenses to Olympic Natural Gas
Company.
The Company is currently using an 800 MHz trunking license
belonging to CCC. The Company exercised its option to purchase the
license on April 1, 1997.
(4) Stockholders' Equity
On September 25, 1996, the Company sold 619,350 shares of
common stock in a Canadian initial public offering at $2.73 (Cdn.
$3.70) per share. In connection with the initial public offering, an
additional 150,500 shares of common stock were sold at $2.73 per share
to 41 investors by the Company.
8
<PAGE> 11
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(4) Stockholders' Equity, (continued)
In conjunction with the 769,850 common shares issued on
September 25, 1996, each share of common stock sold included one
common share purchase warrant. The warrants are exercisable at Cdn.
$5.00 per share any time before March 25, 1998. The Company has the
right to accelerate conversion of the warrants if the average price
for the common stock is at least Cdn. $5.50 for ten consecutive days.
The Company granted options to the underwriting agent of the
Canadian initial public offering to purchase 50,000 common shares for
a period of eighteen months from the completion of the public offering
at Cdn. $3.70 per share.
Upon the completion of the initial public offering, a third
party was granted options, in conjunction with the special warrant
offering, to purchase 60,000 common shares during the period of three
years from September 25, 1996 at a price of Cdn. $3.70 per share.
Of the 6,103,412 issued and outstanding shares of common
stock at March 31, 1997 and December 31, 1996, 3,110,400 shares owned
by the chief executive officer and president were placed in escrow
with Equity Transfer Services, Inc., in connection with the Company's
initial public offering in Canada. The securities are to be released
from escrow as follows: 10% on April 30, 1997, 20% on each of July 31,
1997, July 31, 1998, and July 31, 1999; and 30% on July 31, 2000.
During 1996, 38,477 shares of common stock, which were
subscribed as of December 31, 1995, were issued at $1.35 per share.
The 504,000 shares of subscribed common stock as of December 31, 1994
were issued during early 1995.
During November 1995, 600,000 special warrants were issued to
third parties for $1.35 per share, totaling $729,000, net of offering
expenses. The primary terms of the special warrants include the
exchange of one special warrant for one common share in the capital of
Champion for no additional consideration. On October 2, 1996, these
warrants were converted to 600,000 shares of common stock.
9
<PAGE> 12
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(5) Major Suppliers
The Company has entered into dealer agreements with two
principal communication equipment suppliers. Both dealer agreements
may be terminated at any time by the suppliers or the Company without
cost. Termination of either of these agreements would have a
materially adverse effect on the Company.
10
<PAGE> 13
CHAMPION COMMUNICATION SERVICES, INC.
EARNINGS PER SHARE COMPUTATIONS
For the three months ended March 31, 1997 and 1996
and the year ended December 31, 1996
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996 1996
--------------- --------------- ---------------
PRIMARY EARNINGS PER SHARE Unaudited
<S> <C> <C> <C>
Net income (loss) applicable to common stock $ 2,493,294 ($ 316,824) ($ 1,618,964)
--------------- --------------- ---------------
Shares used in earnings per share computations 6,103,412 4,715,803 5,084,146
Net income (loss) per weighted average common share $ 0.41 ($ 0.07) ($ 0.32)
=============== =============== ===============
FULLY DILUTED EARNINGS PER SHARE
Net income (loss) applicable to common stock $ 2,493,294 ($ 316,824) ($ 1,618,964)
--------------- --------------- ---------------
Shares used in earnings per share computations 6,103,412 4,715,803 5,084,146
Net income (loss) per weighted average common share $ 0.41 ($ 0.07) ($ 0.32)
=============== =============== ===============
COMPUTATION OF SHARES USED IN EARNINGS PER SHARE
COMPUTATIONS - PRIMARY
Outstanding common shares at beginning of period 6,103,412 4,695,085 4,695,085
Weighted average common shares issued during period -- 20,718 389,061
--------------- --------------- ---------------
Weighted average common shares used in earnings
per share computation 6,103,412 4,715,803 5,084,146
=============== =============== ===============
COMPUTATION OF SHARES USED IN EARNINGS PER SHARE
COMPUTATIONS - FULLY DILUTED
Outstanding common shares at beginning of period 6,103,412 4,695,085 4,695,085
Weighted average common shares issued during period -- 20,718 389,061
--------------- --------------- ---------------
Weighted average common shares used in earnings
per share computation 6,103,412 4,715,803 5,084,146
=============== =============== ===============
</TABLE>
11
<PAGE> 14
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations - Quarters ended March 31, 1997 and 1996
Revenues were $5,200,000 for the quarter ended March 31, 1997, an
increase of 157% compared with revenues of $2,030,000 for the quarter ended
March 31, 1996. The noticeable increase was generated by the closing of a
portion of one of several agreements the Company had negotiated in 1996 for the
sale of non-core spectrum. In March 1997, $3,560,000 of spectrum sale revenue
was generated as compared with no sales in the quarter ended March 31, 1996.
Network Services revenue for the quarter ended March 31, 1997 was $1,270,000 or
11% less than the $1,430,000 of revenue earned for the quarter ended March 31,
1996. Equipment sales, service and rentals revenues decreased 40% from $600,000
for the quarter ended March 31, 1996 to $360,000 for the quarter ended March
31, 1997 in large part due to the elimination of direct sales and the service
division from the business plan of the Company.
Costs and expenses were $1,640,000 for the quarter ended March 31,
1997 up 9% from $1,500,000 for the quarter ended March 31, 1996. This increase
in cost includes $430,000 of cost for the sale of spectrum as compared with no
costs for spectrum sales in the first quarter of 1996. Network Services expense
increased to $970,000 for the quarter ended March 31, 1997 as compared to
$940,000 for the same quarter in 1996. Additionally, the costs and expenses for
equipment sales, service and rental decreased to $240,000 for the quarter ended
March 31, 1997 from $550,000 for the same quarter in 1996, a decrease of 56%,
due to the elimination of direct sales and the service division.
General and administrative expenses were $630,000 for the quarter
ended March 31, 1997, an increase of 3% from the $610,000 of expense for the
quarter ended March 31, 1996.
For the period ended March 31, 1997, the Company recorded a loss on
the sale of assets of $20,000 as compared with a gain of $2,000 on the sale of
assets for the period ended March 31, 1996. The Company has held assets in
inventory for refurbishment and enhancement to be reused at new buildout
locations. During the first quarter of 1997 the Company identified assets in
this inventory that would not be economically advantageous to reuse. In the
quarter ended March 31, 1997, the Company recognized a loss on the disposal of
these assets in the amount of $170,000 compared with no loss for the same
period in 1996.
Financial Condition and Liquidity
The Company had $1,140,000 in cash and cash equivalents at March 31,
1997 as compared with $1,087,000 at December 31, 1996. The working capital of
the Company was a negative $550,000 at March 31, 1997 as compared with a
negative $1,570,000 at December 31, 1996. The
12
<PAGE> 15
increase in working capital is attributed to the first quarter spectrum sale
proceeds and the resulting repayment of the note payable to Champion
Communications Company.
Cash flows from operating activities were $3,100,000 and a negative
$830,000 for the quarters ended March 31, 1997 and 1996, respectively.
The Company anticipates that additional funds will be generated from
the closing of the remaining sales agreements for non-core 800 MHz band
systems. There is no assurance, however, that the Company will be able to
continue to raise additional funds from the sale of non-core 800 MHz band
systems and non-strategic communication installations. Failure to do so could
have a material adverse effect on the Company's cash flow and expansion
abilities. The Company anticipates procuring additional funding for expansion
through long-term senior debt and equity or mezzanine financing in the last
quarter of 1997.
As of March 31, 1997, the company owed $270,000 to three commercial
lenders with varying repayment terms.
13
<PAGE> 16
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, thereto duly authorized.
CHAMPION COMMUNICATION SERVICES, INC.
By: /s/ PAMELA R. COOPER
----------------------------------------
Pamela R. Cooper
Chief Financial Officer, Treasurer and
Controller
Date: May 14, 1997
14
<PAGE> 17
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,139,506
<SECURITIES> 0
<RECEIVABLES> 625,372
<ALLOWANCES> 88,235
<INVENTORY> 214,951
<CURRENT-ASSETS> 85,013
<PP&E> 6,788,081
<DEPRECIATION> 1,595,930
<TOTAL-ASSETS> 7,844,685
<CURRENT-LIABILITIES> 2,524,072
<BONDS> 0
<COMMON> 61,034
0
0
<OTHER-SE> 5,170,165
<TOTAL-LIABILITY-AND-EQUITY> 7,844,685
<SALES> 5,195,027
<TOTAL-REVENUES> 5,195,027
<CGS> 0
<TOTAL-COSTS> 2,460,034
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 33,000
<INTEREST-EXPENSE> 61,671
<INCOME-PRETAX> 2,493,294
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,493,294
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,493,294
<EPS-PRIMARY> .41
<EPS-DILUTED> .41
</TABLE>
