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Previous: CABOT CORP, 10-Q, 1995-08-14 |
Next: CALPROP CORP, 10-Q, 1995-08-14 |
<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 June 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 August 11, 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
SIX MONTHS ENDED JUNE 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 $11,914 $11,914
Producer fees 209 209
Admissions, programs, parking and
other racing income 2,273 2,273
Concession sales 948 948
Rental of racing facility $1,404 625 $(1,404) 625
Interest and dividend income 229 82 311
Other income 4 774 (4) 774
------ ------- ------- -------
1,637 16,825 (1,408) 17,054
------ ------- ------- -------
COSTS AND EXPENSES:
Purses and incentive awards 4,574 4,574
Commissions paid to guest tracks 775 775
Direct operating costs 7,579 7,579
Cost of concession sales 306 306
Depreciation and amortization 481 318 799
Racing facility rental 1,409 (1,404) 5
Marketing expense 452 452
General and administrative expense 194 1,339 (4) 1,529
Card club costs 164 164
Interest expense 10 10
------ ------- ------- -------
675 16,926 (1,408) 16,193
------ ------- ------- -------
INCOME (LOSS) BEFORE TAXES 962 (101) 861
INCOME TAX BENEFIT 46 46
------ ------- ------- -------
NET INCOME (LOSS) $ 962 $ (55) $ -0- $ 907
====== ======= ====== =======
PER SHARE AMOUNTS:
NET INCOME (LOSS) $ .17 $ (.01) $ .16
====== ======= =======
DIVIDEND $ .25 $ .25
====== =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 5,756,019 5,756,019 5,756,019
</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
SIX MONTHS ENDED JUNE 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 $ 8,249 $ 8,249
Producer fees 213 213
Admissions, programs, parking and
other racing income 2,075 2,075
Concession sales 904 904
Rental of racing facility $1,340 516 $(1,340) 516
Interest and dividend income 173 18 191
Other income 14 425 (9) 430
------ ------- ------- -------
1,527 12,400 (1,349) 12,578
------ ------- ------- -------
COSTS AND EXPENSES:
Purses and incentive awards 3,134 3,134
Commissions paid to guest tracks 538 538
Producer fees 10 10
Direct operating costs 6,026 6,026
Cost of concession sales 250 250
Depreciation and amortization 470 358 828
Racing facility rental 1,364 (1,340) 24
General and administrative expense 220 1,178 1,398
Marketing expense 431 431
Interest expense 34 (9) 25
------ ------- ------- -------
690 13,323 (1,349) 12,664
------ ------- ------- -------
NET INCOME (LOSS) $ 837 $ (923) $ -0- $ (86)
====== ======= ======= =======
PER SHARE AMOUNTS:
NET INCOME (LOSS) $ .15 $ (.16) $ (.01)
====== ======= =======
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 JUNE 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 $4,644 $4,644
Producer fees 64 64
Admissions, programs, parking and
other racing income 1,089 1,089
Concession sales 491 491
Rental of racing facility $604 461 $(604) 461
Interest and dividend income 128 21 149
Other income 2 468 (1) 469
---- ------ ----- ------
734 7,238 (605) 7,367
---- ------ ----- ------
COSTS AND EXPENSES:
Purses and incentive awards 1,685 1,685
Commissions paid to guest tracks 286 286
Direct operating costs 3,429 3,429
Cost of concession sales 148 148
Depreciation and amortization 240 159 399
Racing facility rental 608 (604) 4
General and administrative expense 111 867 (1) 977
Marketing expense 142 142
Card club costs 135 135
Interest expense 6 6
---- ------ ----- ------
351 7,465 (605) 7,211
---- ------ ----- ------
INCOME (LOSS) BEFORE TAXES 383 (227) 156
INCOME TAX BENEFIT 104 104
---- ------ ----- ------
NET INCOME (LOSS) $383 $ (123) $ -0- $ 260
==== ====== ===== ======
PER SHARE AMOUNTS:
NET INCOME (LOSS) $.07 $ (.02) $ .05
==== ====== ======
DIVIDEND $.25 $ .25
==== ======
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 5,758,752 5,758,752 5,758,752
</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 JUNE 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 $ 671 $ 671
Admissions, programs, parking and
other racing income 794 794
Concession sales 360 360
Rental of racing facility $345 366 $(345) 366
Interest and dividend income 92 4 96
Other income 7 226 (4) 229
---- ------- ------ -------
444 2,421 (349) 2,516
---- ------- ----- -------
COSTS AND EXPENSES:
Purses and incentive awards (19) (19)
Direct operating costs 2,001 2,001
Cost of concession sales 97 97
Depreciation and amortization 235 179 414
Racing facility rental 346 (345) 1
General and administrative expense 112 635 5 752
Marketing expense 280 280
Interest expense 30 (9) 21
---- ------- ----- -------
347 3,549 (349) 3,547
---- ------- ----- -------
NET INCOME (LOSS) $ 97 $(1,128) $ -0- $(1,031)
==== ======= ===== =======
PER SHARE AMOUNTS:
NET INCOME (LOSS) $.02 $ (.20) $ (.18)
==== ======= =======
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.
-4-
<PAGE> 6
CALIFORNIA JOCKEY CLUB AND BAY MEADOWS OPERATING
COMPANY AND SUBSIDIARY
COMBINED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,854 $ 9,356
Securities available for sale (at fair value) 1,450 1,375
Securities held to maturity (at cost) 5,315 6,570
Amounts held on deposit for Thoroughbred horse owners 2 3,003
Accounts receivable (net of allowance for doubtful accounts
of $129 in 1995 and $97 in 1994) 1,105 1,351
Inventories
Prepaid expenses and other current assets 861 188
-------- --------
Total current assets 10,587 21,843
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,182 1,182
Racing plant 24,131 23,812
Tennis facilities 308 308
Equipment and leasehold improvements 9,322 8,454
-------- --------
Total 34,943 33,756
Accumulated depreciation and amortization (19,933) (19,211)
-------- --------
Property, plant and equipment - net 15,010 14,545
-------- --------
INVESTMENTS AND OTHER ASSETS (net of accumulated amortization of
$1,160 in 1995 and $1,083 in 1994) 293 398
-------- --------
TOTAL $ 25,890 $ 36,786
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,255 $ 3,163
Accrued liabilities 1,801 3,216
Accrued purses 1,850
Due to Thoroughbred horse owners 2 3,003
Income taxes payable 372
Uncashed pari-mutuel tickets and vouchers 407 2,421
-------- --------
Total current liabilities 3,465 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 3,829 4,363
Unrealized gain (loss) on securities available for sale 52 (23)
-------- --------
Total stockholders' equity 22,382 22,718
-------- --------
TOTAL $ 25,890 $ 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
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 907 $ (86)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 799 828
Changes in operating assets and liabilities:
Accounts receivable 246 743
Amounts held on deposit for Thoroughbred horse owners 3,001 2,786
Income taxes receivable and payable (372) (87)
Prepaid expenses and other assets (645) (359)
Accounts payable (1,908) (266)
Accrued liabilities (1,415) (1,211)
Accrued purses (1,850) (846)
Due to Thoroughbred horse owners (3,001) (2,786)
Uncashed pari-mutuel tickets and vouchers (2,014) (1,205)
------- -------
Net cash used in operating activities (6,252) (2,489)
------- -------
INVESTING ACTIVITIES:
(Purchase) sale of securities held to maturity, net 1,255 (996)
Purchase of property, plant and equipment (1,187) (353)
------- -------
Net cash provided by (used in) investing activities 68 (1,349)
------- -------
FINANCING ACTIVITIES:
Proceeds from note payable - bank 2,645
Repayment of note payable - bank (1,475)
Dividends (1,441) (863)
Stock options exercised 123
------- -------
Net cash provided by (used in) financing activities (1,318) 307
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS $(7,502) $(3,531)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,356 4,909
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,854 $ 1,378
======= =======
</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
SIX MONTHS ENDED JUNE 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>
Balance at January 1, 1995 $21,970 $748 $22,718
Net income (loss) 962 (55) 907
Dividends ($.25/share) (1,441) (1,441)
Stock options exercised 119 4 123
Unrealized gain on securities available
for sale 75 75
------- ---- -------
Balance at June 30, 1995 $21,685 $697 $22,382
======= ==== =======
</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
SIX MONTHS ENDED JUNE 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>
Balance at January 1, 1994 $21,825 $ (156) $21,981
Net income (loss) 837 (923) (86)
Dividends ($.15/share) (863) (863)
------ ------- ------
Balance at June 30, 1994 $21,799 $ (767) $21,032
====== ======= =======
</TABLE>
See Notes to Financial Statements.
-8-
<PAGE> 10
CALIFORNIA JOCKEY CLUB
BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,727 $ 412
Securities available for sale (at fair value) 1,450 1,375
Securities held to maturity (at cost) 5,315 6,570
Accounts receivable 127 53
Receivable from Bay Meadows Operating Company 1,646 1,991
Prepaid expenses and other current assets 6 32
-------- --------
Total current assets 10,271 10,433
-------- --------
PROPERTY, PLANT AND EQUIPMENT:
Land 1,182 1,182
Racing plant 24,131 23,812
Tennis facility 308 308
Equipment 456 456
-------- --------
Total 26,077 25,758
Accumulated depreciation (14,543) (14,062)
-------- --------
Property, plant and equipment - net 11,534 11,696
-------- --------
TOTAL ASSETS $ 21,805 $ 22,129
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 26 $ 95
Accrued liabilities 94 64
-------- --------
Total current liabilities 120 159
-------- --------
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 3,978 4,457
Unrealized gain (loss) on securities available for sale 52 (23)
-------- --------
Total stockholders' equity 21,685 21,970
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,805 $ 22,129
======== ========
</TABLE>
See Notes to Financial Statements.
-9-
<PAGE> 11
CALIFORNIA JOCKEY CLUB
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 962 $ 837
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation 481 470
Changes in operating assets and liabilities:
Accounts receivable (74) 8
Receivable from Bay Meadows Operating Company 345 5
Prepaid expenses and other assets 26 (64)
Accounts payable (69) (16)
Accrued liabilities 30 37
------- -------
Net cash provided by operating activities 1,701 1,277
------- -------
INVESTING ACTIVITIES:
Purchase of securities held to maturity, net 1,255 (996)
Purchase of property, plant and equipment (319) (76)
------- -------
Net cash provided by (used in) investing activities 936 (1,072)
------- -------
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 1,315 (658)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 412 1,779
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,727 $ 1,121
======= =======
</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>
------------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 127 $ 8,944
Amounts held on deposit for Thoroughbred horse owners 2 3,003
Accounts receivable (net of allowance for doubtful accounts
of $129 in 1995 and $97 in 1994) 978 1,298
Prepaid expenses and other current assets 855 156
------- -------
Total current assets 1,962 13,401
------- -------
PROPERTY, PLANT AND EQUIPMENT:
Equipment and leasehold improvements 8,866 7,988
Accumulated depreciation and amortization (5,390) (5,149)
------- -------
Property, plant and equipment, net 3,476 2,839
------- -------
INVESTMENTS AND OTHER ASSETS (net of accumulated
amortization of $1,160 in 1995 and $1,083 in 1994) 293 398
------- -------
TOTAL ASSETS $ 5,731 $16,648
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,229 $ 3,068
Accrued liabilities 1,707 3,152
Accrued purses 1,850
Due to Thoroughbred horse owners 2 3,003
Payable to California Jockey Club 1,646 1,991
Income taxes payable 372
Uncashed pari-mutuel tickets and vouchers 407 2,421
------- -------
Total current liabilities 4,991 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 (149) (94)
------- -------
Total stockholders' equity 697 748
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 5,731 $16,648
======= =======
</TABLE>
See Notes to Financial Statements.
-11-
<PAGE> 13
BAY MEADOWS OPERATING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (55) $ (923)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 318 358
Changes in operating assets and liabilities:
Accounts receivable 320 735
Amounts held on deposit for Thoroughbred horse owners 3,001 2,786
Income taxes receivable and payable (372) (87)
Prepaid expenses and other assets (671) (295)
Accounts payable (1,839) (250)
Accrued liabilities (1,445) (1,248)
Accrued purses (1,850) (846)
Due to Thoroughbred horse owners (3,001) (2,786)
Payable to California Jockey Club (345) (5)
Uncashed pari-mutuel tickets and vouchers (2,014) (1,205)
------- -------
Net cash used in operating activities (7,953) (3,766)
------- -------
INVESTING ACTIVITIES - Purchase of property, plant and equipment (868) (277)
------- -------
FINANCING ACTIVITIES:
Proceeds from note payable - bank 2,645
Repayment of note payable - bank (1,475)
Stock options exercised 4
------- -------
Net cash provided by financing activities 4 1,170
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS (8,817) (2,873)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,944 3,130
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 127 $ 257
======= =======
</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 per share is
computed as net income 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 six months ended June 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.
2. SUBSEQUENT EVENT
On August 10, 1995, California Jockey Club executed a Letter of Intent
pertaining to the sale of approximately 40 acres surrounding the training
track area. The 40-acre area is in addition to a 33 acre stable area which
is also included in a proposed sale announced in May 1995. Sale of the
stable area is expected to release Cal Jockey from the obligation to
install the water runoff system mandated by the City of San Mateo and
State of California. It is contemplated that both transactions will be
structured as "like-kind" exchanges for tax purposes (although no purchase
price has been determined). The sales of both sites are subject to the
execution of certain agreements and other conditions as well as obtaining
the approval of the City of San Mateo and other regulatory authorities. As
such, there can be no assurances that such sales will occur.
-13-
<PAGE> 15
ITEM 2. MANAGEMENTS' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
California Jockey Club
Results of Operations: Six Months Ended June 30, 1995
Compared with Six Months Ended June 30, 1994
Total revenues for California Jockey Club ("Cal Jockey") increased $110,000 (7%)
for the six months ended June 30, 1995, compared to the same period in the prior
year. Rental income derived from the leasing of its racing facility increased
$64,000, in addition to an increase in interest and other income of $46,000. The
rental income increase was primarily the result of Bay Meadows racing nine more
days in 1995.
Expenses for the six months ended June 30, 1995, decreased $15,000 (2%).
Results of Operations: Quarter Ended June 30, 1995
Compared with Quarter Ended June 30, 1994
Total revenues for Cal Jockey increased $290,000 (65%) for the quarter ended
June 30, 1995, compared to the same quarter of the prior year. Rental income
derived from the leasing of its racing facility increased $259,000 (75%). The
rental income increase is a result of 10 days of racing in the current quarter
compared with no racing days in the second quarter of 1994.
Expenses for the quarter ended June 30, 1994, increased $4,000 (1%) compared to
the same quarter of the prior year.
Liquidity and Capital Resources
The liquid assets (cash and marketable securities) of Cal Jockey increased to
$8,492,000 at June 30, 1995, from $8,357,000 at December 31, 1994. 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 June 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
Results of Operations: Six Months Ended June 30, 1995
Compared with Six Months Ended June 30, 1994
Total revenues increased $4,425,000 (36%) for the six months ended June 30, 1995
compared with the same period in 1994. This was due to an increase in
pari-mutuel revenues of $3,665,000. Pari-mutuel revenues increased due in part
to there being nine more racing days in the first six months of 1995 than in
the same period in 1994. Bay Meadows began its 1995/1996 racing meet on March
22, 1995 with a 19-day Spring Meet. The full racing meet will begin on August
25, 1995. As a result of the Spring Meet and the end of the 1994/1995 meet, Bay
Meadows conducted 30 days of racing in the first six months of 1995. In the same
period in 1994, 21 days of racing were conducted which represented the January
portion of the 1993/1994 racing meet. 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.
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<PAGE> 16
Other revenues were positively impacted by the same factors which affected
pari-mutuel revenues. Admissions, program, parking and other racing income
increased $198,000, and concession sales increased $44,000. These increases were
helped by an increase in interest income due to higher investment balances. In
addition a settlement with a satellite location regarding producer fees resulted
in higher fees for 1995 and a settlement from prior years of approximately
$92,000 is included in other income.
Total costs and expenses increased $3,603,000 (27%) for the six months ended
June 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 ($1,440,000), (ii)
commissions paid to guest locations ($237,000), (iii) direct operating costs
($1,553,000) and (iv) racing facility rental ($45,000). In addition, general and
administrative expenses increased $161,000 primarily as a result of higher
professional fees.
As a result of the Spring Meet in 1995, there will be an offsetting reduction
of racing days during the second six months of 1995 as compared to 1994.
Accordingly, the improvement in revenues and operating results during the first
six months of 1995 might be offset by a reduction in revenues and operating
results during the second six months of 1995.
Bay Meadows recorded an income tax benefit of $46,000 (46% of net loss before
taxes) for the six months ended June 30, 1995. No income tax provision was
recorded for the six months ended June 30, 1994 because realization of the
benefit was not assured.
Results of Operations: Quarter Ended June 30, 1995
Compared with Quarter Ended June 30, 1994
Total revenues for increased $4,817,000 (199%) for the three months ended June
30, 1995, compared to the same period in 1994. This increase was due to ten
racing days of the 19-day Spring Meet falling in the current quarter, compared
with no live racing days in the same quarter of 1994. Other income increased
$242,000.
Total costs and expenses increased $3,916,000 (110%) for the three months ended
June 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 ($1,704,000), (ii)
commissions paid to guest locations ($286,000), (iii) direct operating expenses
($1,428,000) and (iv) racing facility rental ($262,000). In addition, general
and administrative expenses increased $232,000 primarily as a result of higher
administrative payroll and legal costs during the quarter. During the current
quarter the Company incurred $135,000 of costs in attempting to establish a card
club.
Bay Meadows recorded an income tax benefit of $104,000 (46% of net loss before
taxes) for the quarter ended June 30, 1995. No income tax benefit was recorded
for the quarter ended June 30, 1994 because realization of the benefit was
not assured.
Liquidity and Capital Resources
The liquid assets (cash and cash equivalents) of Bay Meadows decreased to
$127,000 at June 30, 1995, from $8,944,000 at December 31, 1994 due to the end
of the spring racing meet and settlement of the related liabilities using
liquid assets. 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 June 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 June 30, 1995, Bay Meadows' current liabilities exceeded its current
assets by $3,029,000. The current ratio (current assets to current liabilities)
was .39 to 1 at June 30, 1995, compared to .85 to 1 at December 31, 1994.
-15-
<PAGE> 17
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Stockholders Meeting held on June 1, 1995
(the "1995 Annual Meeting"), the Company's stockholders voted on a
stockholder proposal providing for a mandatory retirement age of 72
for members of the Board of Directors. Based on the count by the
Inspector of Elections of ballots cast at the 1995 Annual Meeting,
it was announced at the meeting that the proposal had been adopted.
However, several hours after the 1995 Annual Meeting had concluded,
the Company was first informed by the service company engaged to
collect and provide preliminary tabulations of the proxies solicited
by the Board that on the morning of the 1995 Annual Meeting the
service company had received revised proxies from the proxy service
agent for many brokerage houses and banks. The revised proxies, some
of which were not contemporaneously dated, apparently related to the
discretionary voting of "street name" shares for which no voting
instructions had been received from the beneficial owners. Contrary
to the Company's instructions, the revised proxies were not sent by
the service company to the Company's offices until several hours
after the conclusion of the 1995 Annual Meeting. If the revised
proxies were valid and had been received at the Company's offices
prior to the closing of the balloting, it may have changed the
results of the voting on the stockholder proposal. While the Board
of Directors considers the Company to be bound by the results that
were announced at the 1995 Annual Meeting, and thus the Company
currently has in place a mandatory retirement age of 72, in light of
the foregoing, the Board is uncertain whether that result truly
reflects the will of the Company's stockholders. Accordingly, the
Board of Directors has called a Special Meeting to allow the
stockholders to vote again to approve or disapprove a mandatory
retirement age of 72 for members of the Board of Directors, with the
intention that this vote would supersede the vote taken at the 1995
Annual Meeting on a similar proposal.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits listed in the accompanying Exhibit Index are
filed as part of this Quarterly Report on Form 10-Q.
(b) Reports on Form 8-K
None
-16-
<PAGE> 18
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: August 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)
-17-
<PAGE> 19
EXHIBIT INDEX
EX. 27.1 Combined Financial Data Schedule -
California Jockey Club and Bay Meadows
Operating Company
Ex. 27.2 Financial Data Schedule - California Jockey Club
Ex. 27.3 Financial Data Schedule - Bay Meadows Operating Company
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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