<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/ X / JOINT QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
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 1-9319
CALIFORNIA JOCKEY CLUB
(Exact name of registrant as specified in its charter)
Delaware 94-0358820
(State or other jurisdiction (I.R.S. Employer
of incoporation or organization) Identification No.)
2600 S. Delaware Street, San Mateo, California 94402
(Address of principal executive offices) (Zip Code)
(415) 573-4514
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Commission file number 1-9320
BAY MEADOWS OPERATING COMPANY
(Exact name of registrant as specified in its charter)
Delaware 94-2878485
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2600 S. Delaware Street, San Mateo, California 94402
(Address of principal executive offices) (Zip Code)
(415) 574-7223
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
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____.
The number of shares outstanding of each registrant's classes of common stock,
par value $.01 per share, as of the close of business on November 1, 1995, was
as follows:
<TABLE>
<CAPTION>
Registrant Number of Shares
---------- ----------------
<S> <C>
California Jockey Club 5,763,257
Bay Meadows Operating Company 5,763,257
</TABLE>
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
BAY MEADOWS
CALIFORNIA OPERATING ADJUSTMENTS
JOCKEY COMPANY AND AND
CLUB SUBSIDIARY ELIMINATIONS COMBINED
<S> <C> <C> <C> <C>
REVENUES:
Pari-mutuel revenue $ 21,753 $ 21,753
Producer fees 424 424
Admissions, programs, parking and
other racing income 3,530 3,530
Concession sales 1,749 1,749
Rental of racing facility $ 2,757 1,233 $ (2,757) 1,233
Interest and dividend income 355 129 (36) 448
Other income 7 1,065 (11) 1,061
----------- ----------- ----------- -----------
3,119 29,883 (2,804) 30,198
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Purses and incentive awards 8,453 8,453
Commissions paid to guest tracks 1,385 1,385
Producer fees 161 161
Direct operating costs 12,586 12,586
Cost of concession sales 580 580
Depreciation and amortization 710 485 1,195
Racing facility rental 2,768 (2,757) 11
Marketing expense 874 874
General and administrative expense 299 1,990 (11) 2,278
Project development 97 615 712
Interest expense 51 (36) 15
----------- ----------- ----------- -----------
1,106 29,948 (2,804) 28,250
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES 2,013 (65) 1,948
INCOME TAX BENEFIT 30 30
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 2,013 $ (35) $ 0 $ 1,978
=========== =========== =========== ===========
PER SHARE AMOUNTS:
NET INCOME (LOSS) $ .35 $ (.01) $ .34
=========== =========== ===========
DIVIDEND $ .25 $ .25
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,758,458 5,758,458 5,758,458
</TABLE>
See Notes to Financial Statements.
-1-
<PAGE> 3
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
BAY MEADOWS
CALIFORNIA OPERATING ADJUSTMENTS
JOCKEY COMPANY AND AND
CLUB SUBSIDIARY ELIMINATIONS COMBINED
<S> <C> <C> <C> <C>
REVENUES:
Pari-mutuel revenue $ 16,866 $ 16,866
Producer fees 406 406
Admissions, programs, parking and
other racing income 3,271 3,271
Concession sales 1,636 1,636
Rental of racing facility $ 2,531 1,207 $ (2,531) 1,207
Interest and dividend income 279 27 306
Other income 17 703 (11) 709
----------- ----------- ----------- -----------
2,827 24,116 (2,542) 24,401
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Purses and incentive awards 6,714 6,714
Commissions paid to guest tracks 1,100 1,100
Producer fees 152 152
Direct operating costs 10,285 10,285
Cost of concession sales 468 468
Depreciation and amortization 704 534 1,238
Racing facility rental 2,555 (2,531) 24
General and administrative expense 311 2,224 2,535
Marketing expense 829 829
Interest expense 83 (11) 72
----------- ----------- ----------- -----------
1,015 24,944 (2,542) 23,417
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES 1,812 (828) 984
INCOME TAX BENEFIT 348 348
----------- ----------- ----------- -----------
NET INCOME (LOSS) AFTER TAXES $ 1,812 $ (480) $ 0 $ 1,332
=========== =========== =========== ===========
PER SHARE AMOUNTS:
NET INCOME (LOSS) $ .32 $ (.08) $ .24
=========== =========== ===========
DIVIDEND $ .15 $ .15
=========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,753,257 5,753,257 5,753,257
</TABLE>
See Notes to Financial Statements.
-2-
<PAGE> 4
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
BAY MEADOWS
CALIFORNIA OPERATING ADJUSTMENTS
JOCKEY COMPANY AND AND
CLUB SUBSIDIARY ELIMINATIONS COMBINED
<S> <C> <C> <C> <C>
REVENUES:
Pari-mutuel revenues $ 9,839 $ 9,839
Producer fees 215 215
Admissions, programs, parking and
other racing income 1,257 1,257
Concession sales 801 801
Rental of racing facility $ 1,353 608 $ (1,353) 608
Interest and dividend income 126 47 (36) 137
Other income 3 291 (7) 287
----------- ----------- ----------- -----------
1,482 13,058 (1,396) 13,144
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Purses and incentive awards 3,879 3,879
Commissions paid to guest tracks 610 610
Producer fees 161 161
Direct operating costs 5,007 5,007
Cost of concession sales 274 274
Depreciation and amortization 229 167 396
Racing facility rental 1,359 (1,353) 6
Marketing expense 422 422
General and administrative expense 116 651 (7) 760
Project development 86 451 537
Interest expense 41 (36) 5
----------- ----------- ----------- -----------
431 13,022 (1,396) 12,057
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE TAXES 1,051 36 1,087
PROVISION FOR INCOME TAX 16 16
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 1,051 $ 20 $ 0 $ 1,071
=========== =========== =========== ===========
NET INCOME PER SHARE $ .18 $ .01 $ .19
=========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 5,763,257 5,763,257 5,763,257
</TABLE>
See Notes to Financial Statements.
-3-
<PAGE> 5
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
BAY MEADOWS
CALIFORNIA OPERATING ADJUSTMENTS
JOCKEY COMPANY AND AND
CLUB SUBSIDIARY ELIMINATIONS COMBINED
<S> <C> <C> <C> <C>
REVENUES:
Pari-mutuel revenues $ 8,560 $ 8,560
Rights and producer fees 250 250
Admissions, programs, parking and
other racing income 1,196 1,196
Concession sales 732 732
Rental of racing facility $ 1,191 691 $ (1,191) 691
Interest and dividend income 106 9 115
Other income 3 278 (2) 279
----------- ----------- ----------- -----------
1,300 11,716 (1,193) 11,823
----------- ----------- ----------- -----------
COSTS AND EXPENSES:
Purses and incentive awards 3,580 3,580
Commissions paid to guest tracks 562 562
Producer fees 142 142
Direct operating costs 4,259 4,259
Cost of concession sales 218 218
Depreciation and amortization 234 176 410
Racing facility rental 1,191 (1,191)
General and administrative expense 91 1,046 1,137
Marketing expense 398 398
Interest expense 49 (2) 47
----------- ----------- ----------- -----------
325 11,621 (1,193) 10,753
----------- ----------- ----------- -----------
INCOME BEFORE TAXES 975 95 1,070
PROVISION FOR INCOME TAX BENEFIT 348 348
----------- ----------- ----------- -----------
NET INCOME AFTER TAXES $ 975 $ 443 $ 0 $ 1,418
=========== =========== =========== ===========
NET INCOME PER SHARE $ .17 $ .08 $ .25
=========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 5,753,257 5,753,257 5,753,257
</TABLE>
See Notes to Financial Statements.
-4-
<PAGE> 6
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS OPERATING
COMPANY AND SUBSIDIARY
COMBINED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 10,365 $ 9,356
Securities available for sale (at fair value) 1,350 1,375
Securities held to maturity (at cost) 3,809 6,570
Amounts held on deposit for Thoroughbred horse owners 2,474 3,003
Accounts receivable (net of allowance for doubtful accounts
of $82 in 1995 and $97 in 1994) 999 1,351
Prepaid expenses and other current assets 921 188
-------- --------
Total current assets 19,918 21,843
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,182 1,182
Racing plant 24,494 23,812
Tennis facilities 308 308
Equipment and leasehold improvements 9,914 8,454
-------- --------
Total 35,898 33,756
Accumulated depreciation and amortization (20,291) (19,211)
-------- --------
Property, plant and equipment - net 15,607 14,545
-------- --------
INVESTMENTS AND OTHER ASSETS (net of accumulated amortization of
$1,183 in 1995 and $1,083 in 1994) 261 398
-------- --------
TOTAL $ 35,786 $ 36,786
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,244 $ 3,163
Accrued liabilities 3,615 3,216
Accrued purses 1,129 1,850
Due to Thoroughbred horse owners 2,474 3,003
Income taxes payable 32 372
Uncashed pari-mutuel tickets and vouchers 2,896 2,421
-------- --------
Total current liabilities 12,390 14,025
-------- --------
DEFERRED INCOME TAXES 43 43
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock (paired shares), $.01 par value - authorized
10,000,000 shares each; issued and outstanding: 5,763,257 and
5,753,257 shares 116 116
Additional paid-in capital 18,385 18,262
Retained earnings 4,900 4,363
Unrealized gain (loss) on securities available for sale (48) (23)
-------- --------
Total stockholders' equity 23,353 22,718
-------- --------
TOTAL $ 35,786 $ 36,786
======== ========
</TABLE>
See Notes to Financial Statements.
-5-
<PAGE> 7
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
COMBINED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 1,978 $ 1,332
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 1,195 1,238
Changes in operating assets and liabilities:
Accounts receivable 352 (982)
Amounts held on deposit for Thoroughbred horse owners 529 609
Income taxes receivable and payable (340) 22
Inventories 25
Prepaid expenses and other assets (711) (736)
Accounts payable (919) 412
Accrued liabilities 399 1,588
Accrued purses (721) 552
Due to Thoroughbred horse owners (529) (609)
Uncashed pari-mutuel tickets and vouchers 475 756
-------- --------
Net cash provided by (used in) operating activities 1,708 4,207
-------- --------
INVESTING ACTIVITIES:
Maturity (purchase) sale of securities held to maturity, net 2,761 (1,245)
Purchase of property, plant and equipment (2,142) (1,612)
-------- --------
Net cash provided by (used in) investing activities 619 (2,857)
-------- --------
FINANCING ACTIVITIES:
Proceeds from note payable - bank 3,383
Repayment of note payable - bank (3,358)
Dividends (1,441) (863)
Stock options exercised 123
-------- --------
Net cash provided by (used in) financing activities (1,318) (838)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS 1,009 512
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,356 4,909
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,365 $ 5,421
======== ========
</TABLE>
See Notes to Financial Statements.
-6-
<PAGE> 8
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CALIFORNIA BAY MEADOWS ADJUSTMENTS
JOCKEY OPERATING AND
CLUB COMPANY ELIMINATIONS COMBINED
<S> <C> <C> <C>
Balance at January 1, 1995 $ 21,970 $ 748 $ 22,718
Net income (loss) 2,013 (35) 1,978
Dividends ($.25/share) (1,441) (1,441)
Stock options exercised 119 4 123
Unrealized gain (loss) on securities
available for sale (25) (25)
-------- -------- --------
Balance at September 30, 1995 $ 22,636 $ 717 $ 23,353
======== ======== ========
</TABLE>
See Notes to Financial Statements.
-7-
<PAGE> 9
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
SEPARATE AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
CALIFORNIA BAY MEADOWS ADJUSTMENTS
JOCKEY OPERATING AND
CLUB COMPANY ELIMINATIONS COMBINED
<S> <C> <C> <C>
Balance at January 1, 1994 $ 21,825 $ 156 $ 21,981
Net income (loss) 1,812 (480) 1,332
Dividends ($.15/share) (863) (863)
Balance at September 30, 1994 $ 22,774 $ (324) $ 22,450
======== ======== ========
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE> 10
CALIFORNIA JOCKEY CLUB
BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,023 $ 412
Securities available for sale (at fair value) 1,350 1,375
Securities held to maturity (at cost) 3,809 6,570
Accounts receivable 5 53
Receivable from Bay Meadows Operating Company 5,032 1,991
Prepaid expenses and other current assets 6 32
-------- --------
Total current assets 11,225 10,433
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,182 1,182
Racing plant 24,494 23,812
Tennis facility 308 308
Equipment 456 456
-------- --------
Total 26,440 25,758
Accumulated depreciation (14,772) (14,062)
-------- --------
Property, plant and equipment - net 11,668 11,696
-------- --------
TOTAL ASSETS $ 22,893 $ 22,129
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 151 $ 95
Accrued liabilities 106 64
-------- --------
Total current liabilities 257 159
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value - authorized 10,000,000 shares;
issued and outstanding 5,763,257 and 5,753,257 shares 58 58
Additional paid-in capital 17,597 17,478
Retained earnings 5,029 4,457
Unrealized gain (loss) on securities available for sale (48) (23)
-------- --------
Total stockholders' equity 22,636 21,970
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,893 $ 22,129
======== ========
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE> 11
CALIFORNIA JOCKEY CLUB
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 2,013 $ 1,812
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 710 704
Changes in operating assets and liabilities:
Accounts receivable 48 2
Receivable from Bay Meadows Operating Company (3,041) (1,034)
Prepaid expenses and other assets 26 (37)
Accounts payable 56 72
Accrued liabilities 42 98
------- -------
Net cash provided by (used in) operating activities (146) 1,617
------- -------
INVESTING ACTIVITIES:
Maturity (purchase) of securities held to maturity, net 2,761 (1,245)
Purchase of property, plant and equipment (682) (855)
------- -------
Net cash provided by (used in) investing activities 2,079 (2,100)
------- -------
FINANCING ACTIVITIES:
Stock options exercised 119
Dividends (1,441) (863)
------- -------
Net cash used in financing activities (1,322) (863)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 611 (1,346)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 412 1,779
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,023 $ 433
======= =======
</TABLE>
See Notes to Financial Statements.
-10-
<PAGE> 12
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 9,342 $ 8,944
Amounts held on deposit for Thoroughbred horse owners 2,474 3,003
Accounts receivable (net of allowance for doubtful accounts
of $82 in 1995 and $97 in 1994) 994 1,298
Prepaid expenses and other current assets 916 156
-------- --------
Total current assets 13,726 13,401
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Equipment and leasehold improvements 9,458 7,998
Accumulated depreciation and amortization (5,520) (5,149)
-------- --------
Property, plant and equipment, net 3,938 2,849
-------- --------
INVESTMENTS AND OTHER ASSETS (net of accumulated
amortization of $1,183 in 1995 and $1,083 in 1994) 261 398
-------- --------
TOTAL ASSETS $ 17,925 $ 16,648
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,093 $ 3,068
Accrued liabilities 3,509 3,152
Accrued purses 1,129 1,850
Due to Thoroughbred horse owners 2,474 3,003
Payable to California Jockey Club 5,032 1,991
Income taxes payable 32 372
Uncashed pari-mutuel tickets and vouchers 2,896 2,421
-------- --------
Total current liabilities 17,165 15,857
-------- --------
DEFERRED INCOME TAXES 43 43
-------- --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock $.01 par value-authorized 10,000,000
shares; issued and outstanding 5,763,257 and 5,753,257 shares 58 58
Additional paid-in capital 788 784
Accumulated deficit (129) (94)
-------- --------
Total stockholders' equity 717 748
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 17,925 $ 16,648
======== ========
</TABLE>
See Notes to Financial Statements.
-11-
<PAGE> 13
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (35) $ (480)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 485 534
Changes in operating assets and liabilities:
Accounts receivable 304 (984)
Amounts held on deposit for Thoroughbred horse owners 529 609
Income taxes receivable and payable (340) 22
Inventories 25
Prepaid expenses and other assets (737) (698)
Accounts payable (975) 300
Accrued liabilities 357 1,529
Accrued purses (721) 552
Due to Thoroughbred horse owners (529) (609)
Payable to California Jockey Club 3,041 1,034
Uncashed pari-mutuel tickets and vouchers 475 756
------- -------
Net cash provided by (used in) operating activities 1,854 2,590
------- -------
INVESTING ACTIVITIES - Purchase of property, plant and equipment (1,460) (757)
------- -------
FINANCING ACTIVITIES:
Proceeds from note payable - bank 3,383
Repayment of note payable - bank (3,358)
Stock options exercised 4
------- -------
Net cash provided by financing activities 4 25
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 398 1,858
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,944 3,130
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,342 $ 4,988
======= =======
</TABLE>
See Notes to Financial Statements.
-12-
<PAGE> 14
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS
OPERATING COMPANY AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements include condensed unaudited
financial statements of California Jockey Club ("Cal Jockey") and Bay
Meadows Operating Company ("Bay Meadows") on a combined basis and for each
company individually. All significant affiliate and intercompany balances
and transactions have been eliminated on the combined financial statements.
The accompanying condensed unaudited financial statements should be read in
conjunction with the companies' 1994 Annual Report. Net income (loss) per
share is computed as net income (loss) divided by weighted average shares
outstanding. Certain prior year amounts have been reclassified to conform
to the 1995 presentation.
In the opinion of management, all adjustments (consisting of only recurring
adjustments) considered necessary for a fair presentation of the financial
condition and results of operations for Cal Jockey and Bay Meadows
individually, have been included in the financial statements. The results
of operations for the nine months ended September 30, 1995, are not
indicative of the results that may be expected for the year ending December
31, 1995, because of the seasonal nature of the operations.
-13-
<PAGE> 15
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
California Jockey Club
Results of Operations: Nine Months Ended September 30, 1995
Compared with Nine Months Ended September 30, 1994
Total revenues for California Jockey Club ("Cal Jockey") increased $292,000
(10.3%) for the nine months ended September 30, 1995, compared to the same
period in the prior year. Rental income derived from the leasing of its
racing facility increased $226,000, in addition to an increase in interest
and other income of $66,000. The rental income increase was primarily the
result of Bay Meadows racing eleven more days in 1995.
Expenses for the nine months ended September 30, 1995, increased $91,000
(9.0%) due to costs incurred related to the development of Cal Jockey
property.
Results of Operations: Quarter Ended September 30, 1995
Compared with Quarter Ended September 30, 1994
Total revenues for Cal Jockey increased $182,000 (14.0%) for the quarter
ended September 30, 1995, compared to the same quarter of the prior year.
Rental income derived from the leasing of its racing facility increased
$162,000 (13.6%). The rental income increase was primarily the result of 26
days of racing in the current quarter compared with 24 racing days in the
third quarter of 1994.
Expenses for the quarter ended September 30, 1995, increased $106,000
(32.6%) compared to the same quarter of the prior year due to costs
incurred related to the development of Cal Jockey property.
Liquidity and Capital Resources
The liquid assets (cash and marketable securities) of Cal Jockey decreased
to $6,182,000 at September 30, 1995, from $8,357,000 at December 31, 1994.
The decrease was principally the result of the timing of the payments from
Bay Meadows Operating Company. Cal Jockey has guaranteed a $6,000,000 line
of credit that Bay Meadows has with a bank, which expires on May 31, 1996.
As of September 30, 1995, there were no borrowings outstanding on this line
of credit.
The City of San Mateo (the "City"), along with the State of California,
have mandated that water runoff from Bay Meadows' barn area be disconnected
from the municipal sewer collection system. Cal Jockey is cooperating with
the City and State Regional Water Quality Control Board to resolve this
situation and has prepared preliminary reports describing the proposed
compliance measures. The estimated costs of $1,500,000 are expected to be
capitalized in Property, Plant and Equipment. Therefore, such costs have
not been accrued in the accompanying financial statements. Final
determinations and approvals have not been received nor has a schedule for
implementation been established.
Cal Jockey anticipates that funds generated internally and its cash
reserves will be sufficient to meet its liquidity requirements for the
foreseeable future.
Bay Meadows Operating Company and Subsidiaries
Results of Operations: Nine Months Ended September 30, 1995
Compared with Nine Months Ended September 30, 1994
Total revenues increased $5,767,000 (23.9%) for the nine months ended
September 30, 1995 compared with the same period in 1994. This was due to
an increase in pari-mutuel revenues of $4,887,000. Pari-mutuel revenues
increased due in part to there being 11 more racing days in the first nine
months of 1995 than in the same period in 1994. These increases in
pari-mutuel revenues were helped by an increase in handle on imported races
from Southern California as a result of regulatory changes in the summer of
1994 which permit "Full-card" intrastate simulcasting.
-14-
<PAGE> 16
Other revenues were positively impacted by the same factors which affected
pari-mutuel revenues. Admissions, program, parking and other racing income
increased $259,000, and concession sales increased $113,000. In addition,
interest income increased due to higher investment balances. A settlement
with a satellite location regarding producer fees resulted in higher fees
for 1995 and a settlement from prior year producer fees that had been
previously reserved for, of approximately $92,000 is included in other
income.
Total costs and expenses increased $5,004,000 (20.0%) for the nine months
ended September 30, 1995, compared with the same period in the prior year.
This was primarily due to increases in expenses associated with higher
operating revenues, including (i) purses and incentive awards ($1,739,000),
(ii) commissions paid to guest locations ($285,000), (iii) direct operating
costs ($2,301,000) and (iv) racing facility rental ($213,000). During the
current year the Company incurred $615,000 of costs in attempting to
establish a card club, which are shown under Project Development Costs. On
November 7, 1995, voters of the City of San Mateo rejected a measure which
would have permitted the establishment of a card club. No such costs were
incurred during the prior year.
As a result of the Spring Meet in 1995, there will be an offsetting
reduction of racing days during the fourth quarter of 1995 as compared to
1994. Accordingly, the improvement in revenues and operating results during
the first nine months of 1995 might be offset by a reduction in revenues
and operating results during the last three months of 1995.
Bay Meadows recorded an income tax benefit of $30,000 (46% of net loss
before taxes) for the nine months ended September 30, 1995. The tax benefit
in the prior year resulted from the anticipated benefit from losses
sustained in the first nine months of the year.
Results of Operations: Quarter Ended September 30, 1995
Compared with Quarter Ended September 30, 1994
Total revenues for increased $1,342,000 (11.5%) for the three months ended
September 30, 1995, compared to the same period in 1994.
Total costs and expenses increased $1,401,000 (12.1%) for the three months
ended September 30, 1995, compared with the same period in the prior year.
This was primarily due to increases in expenses associated with higher
operating revenues, including (i) purses and incentive awards ($299,000),
(ii) commissions paid to guest locations ($48,000), (iii) direct operating
expenses ($748,000) and (iv) racing facility rental ($168,000). During the
current quarter the Company incurred $451,000 of costs in attempting to
establish a card club. No such costs were not incurred during the prior
year.
Bay Meadows recorded a provision for income tax expense of $16,000 (46% of
net loss before taxes) for the quarter ended September 30, 1995. The tax
benefit in the prior year resulted from the anticipated benefit from losses
sustained in the first nine months of the year.
Liquidity and Capital Resources
The liquid assets (cash and cash equivalents) of Bay Meadows increased to
$9,342,000 at September 30, 1995, from $8,944,000 at December 31, 1994. Bay
Meadows is dependent on Cal Jockey's assistance in securing a bank line of
credit for its working capital needs throughout the year. Bay Meadows has a
$6,000,000 bank line of credit that expires on May 31, 1996, for which Cal
Jockey has guaranteed all borrowings. As of September 30, 1995, there were
no borrowings outstanding on this line of credit. Management believes that
Bay Meadows can meet its funding needs for the foreseeable future through
internally generated funds and the utilization of the line of credit.
As of September 30, 1995, Bay Meadows' current liabilities exceeded its
current assets by $3,469,000. The current ratio (current assets to current
liabilities) was .80 to 1 at September 30, 1995, compared to .85 to 1 at
December 31, 1994.
-15-
<PAGE> 17
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Bay Meadows and Cal Jockey are, in the ordinary course of business,
involved in litigation and other legal matters. The employment-
related lawsuit with James Burkes v Bay Meadows Racing Association,
Bay Meadows Catering and Bill Caldwell was settled on September 29,
1995.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On June 1, 1995, Bay Meadows Operating Company ("Bay Meadows")
and California Jockey Club ("Cal Jockey") each held their 1995
Annual Stockholders Meetings. The results of the annual
meetings were as follows:
Cal Jockey
Election of Directors: Cal Jockey's stockholders elected the
following individuals to serve as directors for an additional
term as follows:
James P. Conn 2,893,152 Votes
James M. Harris 3,628,090 Votes
Kjell H. Qvale 3,685,946 Votes
Marylin Kyne Gunderson 3,601,103 Votes
Richard E. Perazzo 3,486,873 Votes
Brian M. Herrera 3,608,160 Votes
Appointment of Auditors: Cal Jockey's stockholders ratified the
appointment of Deloitte & Touche, L.L.P. as Cal Jockey's
independent auditors for the 1995 fiscal year as follows:
FOR 3,729,992 Votes
AGAINST 17,115 Votes
ABSTAIN 33,679 Votes
Bay Meadows
Mandatory Retirement Age Stockholder Proposal: Bay Meadows'
stockholders approved a stockholder proposal to establish a
mandatory age of 72 for members of the board of directors as
follows:
FOR 2,197,832 Votes
AGAINST 1,249,052 Votes
ABSTAIN 381,961 Votes
-16-
<PAGE> 18
Election of Directors: Bay Meadows' stockholders elected the
following individuals to serve as directors for an additional
term as follows:
Eugene F. Barsotti, Jr. 3,585,909 Votes
John C. Harris 3,586,094 Votes
F. Jack Liebau 3,582,115 Votes
Lee R. Tucker 3,320,914 Votes
Anthony J. Zidich 3,511,852 Votes
Appointment of Auditors: Bay Meadows' stockholders ratified the
appointment of Deloitte & Touche, L.L.P. as Bay Meadows'
independent auditors for the 1995 fiscal year as follows:
FOR 3,755,803 Votes
AGAINST 11,841 Votes
ABSTAIN 35,455 Votes
(b) On August 22, 1995, Bay Meadows held a Special Stockholders
Meeting to vote again on a proposal to establish a mandatory
retirement age of 72 for members of the board of directors.
Bay Meadows' stockholders approved the proposal as follows:
FOR 3,132,313 Votes
AGAINST 1,687,007 Votes
ABSTAIN 40,024 Votes
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
-17-
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrants have duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized.
DATED: November 14, 1995
CALIFORNIA JOCKEY CLUB
/s/ James M. Harris
-----------------------------
James M. Harris
President, Treasurer
and Controller
(Principal Executive and
Financial Officer)
BAY MEADOWS OPERATING COMPANY
/s/ F. Jack Liebau
-----------------------------
F. Jack Liebau
President and Chief Executive
Officer
(Principal Executive Officer)
-18-
<PAGE> 20
EXHIBIT INDEX
Exhibit No. Description
27-A California Jockey Club and Bay Meadows Operating
Company Financial Data Schedule.
27-B California Jockey Club Financial Data Schedule.
27-C Bay Meadows Operating Company Financial Data
Schedule.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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