<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________
(Mark One) FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File Number 0-2374
March 31, 1995
CRYSTAL MOUNTAIN, INC.
(Exact name of registrant as specified in its charter)
ONE CRYSTAL MOUNTAIN BLVD.
CRYSTAL MOUNTAIN, WASHINGTON 98022
(address of principal executive offices)
Washington 91-0683256
(State of Incorporation) (IRS Employer Identification Number)
(360) 825-3865
(Telephone number)
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 ( )
At June 30, 1995, 26609 shares of $50 par value Class A common stock and 710
shares of $20 par value Class B common stock were outstanding.
<PAGE> 2
CRYSTAL MOUNTAIN, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
PART I Financial Information
Item 1 Financial Statements
Balance Sheet 3
Statement of Income 4
Statement of Cash Flows 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II Other Information
Item 1 Legal Proceedings 8
SIGNATURES 9
EXHIBIT 27
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CRYSTAL MOUNTAIN, INC.
BALANCE SHEET
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
June 30, June 30,
1995 1994
---------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 154,000 $ 168,000
Short-term investments 112,000 113,000
Accounts receivable 24,000 90,000
Inventories 115,000 54,000
Prepaid expenses 47,000 121,000
---------- ----------
Total current assets 452,000 546,000
LAND IMPROVEMENTS, BUILDINGS AND EQUIPMENT, net 7,779,000 8,468,000
OTHER ASSETS 92,000 72,000
---------- ----------
$ 8,323,000 $ 9,086,000
========== ==========
LIABILITIES AND STOCKHOLER'S EQUITY
CURRENT LIABILITIES
Line of credit - -
Accounts payable 240,000 144,000
Accrued Liabilities 423,000 420,000
Interest payable 1,000 71,000
Deferred income 163,000 -
Current portion of term debt and leases 208,000 214,000
---------- ----------
Total current liabilities 1,035,000 849,000
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS,
net of current portion 3,742,000 4,051,000
DEFERRED INCOME TAX 55,000 55,000
---------- ----------
Total liabilities 4,832,000 4,955,000
STOCKHOLDERS' EQUITY
Common stock---
Class A, $50 par value per share,
90,000 shares authorized, 26,609 issued and outstanding 1,331,000 1,331,000
Class B, $20 par value per share,
25,000 shares authorized, 710 issued and outstanding 14,000 14,000
Additional paid-in capital 505,000 505,000
Retained earnings 1,641,000 2,281,000
---------- ----------
Total stockholders' equity 3,491,000 4,131,000
---------- ----------
$8,323,000 $9,086,000
========== ==========
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 4
CRYSTAL MOUNTAIN, INC.
STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
--------------------------- -------------------------
1995 1994 1995 1994
----------- ----------- ---------- ----------
(Restated) (Restated)
<S> <C> <C> <C> <C>
REVENUES
Mountain operations $ 255,000 $ 249,000 $6,735,000 $6,463,000
Food services 78,000 81,000 1,878,000 1,803,000
----------- ----------- ---------- ----------
333,000 330,000 8,613,000 8,266,000
----------- ----------- ---------- ----------
EXPENSES
Mountain operations 461,000 495,000 3,202,000 2,968,000
Food services 108,000 124,000 1,622,000 1,388,000
General and administrative 594,000 406,000 2,386,000 2,277,000
Depreciation and amortization 222,000 237,000 794,000 642,000
Interest 74,000 71,000 257,000 238,000
----------- ----------- ---------- ----------
1,459,000 1,333,000 8,261,000 7,513,000
----------- ----------- ---------- ----------
Income (loss) before income taxes (1,126,000) (1,003,000) 352,000 753,000
Income tax benefit (expense) - - - -
NET INCOME (LOSS) $(1,126,000) $(1,003,000) $ 352,000 $ 753,000
=========== =========== ========== ==========
NET EARNINGS PER COMMON SHARE $ (41.22) $ (36.71) $ 12.88 $ 27.56
=========== =========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING 27,319 27,319 27,319 27,319
----------- ----------- ---------- ----------
</TABLE>
See accompanying notes to financial statements.
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<PAGE> 5
CRYSTAL MOUNTAIN, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
June 30, June 30,
--------------------------- -------------------------
1995 1994 1995 1994
----------- ----------- ----------- ---------
(Restated) (Restated)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (Loss) $(1,126,000) $(1,003,000) $ 352,000 $ 753,000
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities
Depreciation and amortization 222,000 237,000 794,000 642,000
Change in:
Accounts receivable 60,000 106,000 42,000 (29,000)
Inventories 12,000 27,000 (15,000) 19,000
Prepaid expenses 22,000 27,000 65,000 (36,000)
Other assets - 8,000 101,000 97,000
Accounts payable (15,000) (163,000) 24,000 (268,000)
Accrued liabilities (353,000) (455,000) 19,000 (137,000)
Deferred income (31,000) - 92,000 (92,000)
----------- ----------- ----------- ---------
(83,000) (213,000) 1,122,000 196,000
----------- ----------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase (decrease) in short-term investments - (3,000) - (5,000)
Capital expenditures, net (75,000) (70,000) (460,000) (703,000)
----------- ----------- ----------- ---------
(75,000) (73,000) (460,000) (708,000)
----------- ----------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net payments on line of credit - - (400,000) -
Principal payments on long-term
debt and leases 947,000 1,176,000 (608,000) (223,000)
----------- ----------- ----------- ---------
947,000 1,176,000 (1,008,000) (223,000)
----------- ----------- ----------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (337,000) (113,000) 6,000 18,000
CASH AND CASH EQUIVALENTS
Beginning of period 491,000 281,000 148,000 150,000
----------- ----------- ----------- ---------
End of period $ 154,000 $ 168,000 $ 154,000 $ 168,000
=========== =========== =========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ 74,000 $ 71,000 $ 257,000 $ 238,000
=========== =========== =========== =========
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE> 6
CRYSTAL MOUNTAIN, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED JUNE, 1995 AND 1994
(Unaudited)
NOTE 1 - SUMMARY OF FINANCIAL STATEMENT PRESENTATION
In the opinion of management, the financial statements include all
adjustments necessary to present fairly the changes in financial position and
results of operations for the interim periods reported.
Revenues are subject to material seasonal variations with
approximately 90% of the Company's revenue recognized during the winter months
of each fiscal year. Interim operating results may not be taken as fairly
representative of the estimated results for a full fiscal year.
The financial statements should be read with reference to
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained herein and the "Notes to Financial Statements" set forth
in the Company's 10-K filing for the year ended September 30, 1994.
NOTE 2 - PRIOR PERIOD ADJUSTMENTS
The company restated its previously issued 1993 financial statements
to correct certain errors related to fixed assets. Subsequent to issuing the
1993 financial statements, the Company determined that depreciation and
amortization expense had not been computed on fixed assets acquired during
1993. The Company also determined that the financial statements included fixed
assets that were no longer in service.
For the year ended September 30, 1994, interim financial statements
originally issued reported the Company's changes in financial position and
results of operations without the effects of the prior period adjustments.
To conform with presentation of interim financial statements during the year
ending September 30, 1995, previously issued amounts have been restated.
NOTE 3 - PROVISION FOR INCOME TAX
There is no income tax provision for the interim periods reported
because the Company has significant net operating loss carryforwards which are
expected to be utilized to offset net income.
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<PAGE> 7
PART I - FINANCIAL INFORMATION
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
NINE MONTHS ENDING JUNE 30, 1995 COMPARED
TO NINE MONTHS ENDING JUNE 30, 1994
Crystal Mountain is a company whose fortunes rise and fall with the vagaries of
weather. Each year is unique as to how weather conditions direct our financial
results. The 1994-95 winter season proved just how weather dependent we are.
We began this winter season with our earliest opening ever on November 6, 1994.
Skiing conditions were excellent and business was ahead of expectations. By
the middle of December the Company was on track for a record year for snowfall,
skier visits and revenues.
Unseasonably warm weather arrived the week before Christmas and remained with
us until the middle of March. Due to the warm and often stormy weather the
Company did not attract the number of daily paid skier visits during this
winter as is normally expected. Paid skier visits fell dramatically compared
to the first nine months of 1994: 252,959 in 1995 versus 311,000 in 1994.
The Company's ability to reduce variable costs is limited once the mountain is
open for the season. It is difficult to reduce operating costs as revenues
decline, without cutting the quality of services that skiers expect and are
required if the Company is to remain competitive during the ski season.
Mountain operating expenses and food services expenses are up 8% and 17%
respectively from the previous year. The cost of providing services to
essentially the same number of skiers in 1995 as 1994 was significantly higher
because the resort was open four weeks longer.
Depreciation expense is up 24% for the nine month period. The increase is due
to reducing the depreciation life of our computerized ticketing system as well
as asset additions which were put into service last year. Interest expense is
up 8% even though outstanding debt is less than the prior year. Interest rates
have risen from last year resulting in an increase in interest expense.
Total revenues increased $347,000 (4%) from 1994, however total expenses
increased $748,000 (10%) resulting in a lower net income for 1995 ($352,000
versus $753,000). The November 6, 1994 opening was 34 days before the 1993
opening of December 10. In 1995 it took more days of operations to achieve
comparable revenues and skier visits resulting in a 53% decline in net income.
The Company reduced total bank debt to $3,942,000 at June 30, 1995, from
$4,251,000 at June 30, 1994, a decrease of $309,000. The negative working
capital for the interim period ending June 30, 1995 is not unusual. A new loan
agreement is being negotiated with SeaFirst Bank which will consolidate the
term line and the operating line into one agreement. This new agreement will
increase our financial flexibility and will serve to fund new capital projects.
As the fiscal year progresses, we expect to continue to meet obligations as
they come due.
-7-
<PAGE> 8
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Company is not a party to any material pending legal proceedings, other
than ordinary routine litiation either incidental to the business or covered by
the Company's liability insurance.
-8-
<PAGE> 9
CRYSTAL MOUNTAIN, INC.
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized on the 14th day of August,
1995.
CRYSTAL MOUNTAIN, INC.
Date: August 14, 1995
By________________________________________
Tom Leonard, President
Date: August 14, 1995
By_________________________________________
George Schmidt, Director of Finance & Systems
-9-
<TABLE> <S> <C>
<ARTICLE> CT
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<TOTAL-ASSETS> 8,323,000
<COMMON> 1,345,000
0
0
<OTHER-SE> 2,146,000
<TOTAL-LIABILITY-AND-EQUITY> 8,323,000
<TOTAL-REVENUES> 8,613,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 352,000
<EPS-PRIMARY> 12.88
<EPS-DILUTED> 0
</TABLE>
