FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
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 0-9624
International Thoroughbred Breeders, Inc.
(Exact name of registrant as specified in its charter)
Delaware 22-2332039
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization No.)
P.O. Box 1232, Cherry Hill, New Jersey 08034
(Address of principal executive offices)(Zip Code)
(609) 488-3838
(Registrant's telephone number, including area code)
(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 last 90 days.
Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the latest practicable date.
Class Outstanding at October 28, 1994
Common Stock, $ 2.00 par value 9,551,324
<TABLE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1994 AND JUNE 30, 1994
ASSETS
September 30,
1994 June 30,
(UNAUDITED) 1994
<CAPTION>
CURRENT ASSETS:
<S> <C> <C> <C> <C>
Cash $ 2,290,348 $ 2,683,361
Short-Term Investments 15,425,103 13,392,730
TOTAL CASH AND CASH EQUIVALENTS 17,715,451 16,076,091
Restricted Cash and Investments 2,587,375 2,690,072
Accounts Receivable - Net 1,058,672 937,921
Prepaid Expenses 686,739 907,654
Accrued Interest Receivable 5,972 44,439
Other Current Assets 8,916 7,703
TOTAL CURRENT ASSETS 22,063,125 20,663,880
LAND, BUILDINGS, EQUIPMENT AND LIVESTOCK:
Land and Buildings 52,196,047 52,133,715
Equipment 1,888,681 1,800,630
Livestock 62,895 187,951
TOTAL LAND, BUILDINGS, EQUIPMENT
AND LIVESTOCK 54,147,623 54,122,296
LESS: Accumulated Depreciation 810,295 801,031
TOTAL LAND, BUILDINGS, EQUIPMENT
AND LIVESTOCK - NET 53,337,328 53,321,265
OTHER ASSETS 446,374 448,266
TOTAL ASSETS $ 75,846,827 $ 74,433,411
</TABLE>
See Notes to Financial Statements.
<TABLE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1994 AND JUNE 30, 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
September 30,
1994 June 30,
(UNAUDITED) 1994
<CAPTION>
CURRENT LIABILITIES:
<S> <C> <C> <C><C>
Accounts Payable and Accrued Expenses $ 4,752,466 $ 3,866,043
Notes Payable - Current Portion 15,000 40,000
TOTAL CURRENT LIABILITIES 4,767,466 3,906,043
DEFERRED INCOME 1,224,766 719,383
COMMITMENTS AND CONTINGENCIES 0 0
SHAREHOLDERS' EQUITY:
Series A (Convertible) Preferred Stock $100.00
Par Value,
Authorized 500,000 Shares, Issued
and Outstanding,
362,446 and 362,443 Shares, Respectively 36,244,575 36,244,275
Common Stock $2.00 Par Value, Authorized
25,000,000 Shares,
Issued and Outstanding, 9,551,320 and 9,551,255
Sahres, Respectively 19,102,639 19,102,509
Capital in Excess of Par (June 30, 1993 reflects
quasi-reorganization) 11,960,175 11,960,605
Retained Earnings (subsequent to June 30, 1993,
date of quasi-reorganization, total deficit
eliminated $102,729,936) 2,547,206 2,500,596
TOTAL SHAREHOLDERS' EQUITY 69,854,595 69,807,985
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 75,846,827 $ 74,433,411
</TABLE>
See Notes to Financial Statements.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
Common Preferred
Number of Number of
Shares Amount Shares Amount
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
BALANCE - JUNE 30, 1994 9,551,255 $ 19,102,509 362,443 $ 36,244,275
Shares Issued for Fractional Exchanges
With Respect to the
One-for-twenty Reverse Stock Split
effected on March 13, 1992 65 130 3 300
Net Income for the Three Months Ended
September 30, 1994 --- --- --- ---
BALANCE - SEPTEMBER 30, 1994 9,551,320 $ 19,102,639 362,446 $ 36,244,575
</TABLE>
<TABLE>
Capital
in Excess Retained
of Par Earnings Total
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
BALANCE - JUNE 30, 1994 $ 11,960,605 $ 2,500,596 $ 69,807,985
Shares Issued for Fractional Exchanges
With Respect to the
One-for-twenty Reverse Stock Split
effected on March 13, 1992 (430) --- ---
Net Income for the Three Months Ended
September 30, 1994 --- 46,610 46,610
BALANCE - SEPTEMBER 30, 1994 $ 11,960,175 $ 2,547,206 $ 69,854,595
</TABLE>
See Notes to Financial Statements.
<TABLE>
INTERNATIONAL THOTOUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
Three Months Ended Three Months En
September 30, September 30,
1994 1993
<CAPTION>
REVENUES:
<S> <C> <C> <C> <C>
Revenue from Operations $ 7,094,007 $ 7,461,065
Investment Income Revenue 492,207 120,536
TOTAL REVENUES 7,586,214 7,581,601
EXPENSES:
Cost of Revenues 1,278,377 1,088,815
Operating Expenses 4,632,253 4,683,497
Depreciation & Amortization 142,330 140,908
General & Administrative Expenses 1,486,644 1,137,013
TOTAL EXPENSES 7,539,604 7,050,233
INCOME FROM OPERATIONS
BEFORE TAXES 46,610 531,368
LESS:Income Tax Expense 0 0
NET INCOME $ 46,610 $ 531,368
NET INCOME PER SHARE $ 0.00 $ 0.06
</TABLE>
See Notes to Financial Statements.
<TABLE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(UNAUDITED)
Three Months Ended Three Months Ended
September 30, September 30,
1994 1993
INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS
<CAPTION>
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 7,471,639 $ 7,784,154
Cash Paid to Suppliers and Employees (6,308,715) (6,821,210)
Interest Received 190,674 84,582
Cash Received from Sale of Trading Securities 340,000 0
Change in Restricted Cash & Investments 102,697 570,710
NET CASH PROVIDED BY OPERATIONS 1,796,295 1,618,236
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Livestock 0 31,453
Proceeds from Sale of Equipment 7,000 62,000
Capital Expenditures (140,826) (171,167)
Increase in Other Investment Activity 1,892 126,371
NET CASH PROVIDED(USED) BY INVESTING ACTIVITIES (131,934) 48,657
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments on Long Term Notes (25,000) (31,251)
NET CASH USED BY FINANCING ACTIVITIES (25,000) (31,251)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,639,360 1,635,642
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 16,076,091 15,337,655
CASH AND CASH EQUIVALENTS AT
END OF THE PERIOD $ 17,715,451 $ 16,973,297
</TABLE>
See Notes to Financial Statements.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(1) INTEREST EXPENSE
Garden State Park Racetrack, Inc. is a wholly owned subsidiary of the
parent company, International Thoroughbred Breeders, Inc. All interest
expense of the subsidiaries is considered expense of the parent company. The
parent company is due interest on funds it has advanced to Garden State Park
for the purchase, construction and equipping of the racetrack and funding its
operations as needed. As of September 30, 1994, such advances totaled
$140,921,826 to Garden State Park, in addition to initial capitalization of
$86,130,000 provided by the net proceeds of the Company's preferred stock
offering in July, 1983. The interest on these advances is computed at an
average prime lending rate between 7.25% and 7.75% during the period. The
resulting interest owed to the parent company for the fiscal quarter ended
September 30, 1994 by Garden State Park was $2,614,575.
(2) INCOME TAX EXPENSE
Effective July 1, 1993, the Company adopted the provisions of Statement
of Financial Standards (SFAS) No. 109, Accounting for Income Taxes. This
Statement requires that deferred income taxes reflect the tax consequences on
future years of differences between the tax bases of assets and liabilities
and their financial reporting amounts. The effect of adoption of this
Statement on current and prior financial statements is immaterial. No
provision for income taxes has been made for the quarter ended September 30,
1994, as the Company is in a net operating loss carryforward position for tax
purposes.
When the Company incurs income taxes in the future, any future income
tax benefits resulting from the utilization of net operating losses and other
carryforwards existing at June 30, 1993 to the extent resulting from the
quasi-reorganization, will be excluded from the results of operations and
credited to paid in capital.
The Company has a net operating loss carryforward of approximately
$161,860,000 at September 30, 1994, expiring in the years after June 30, 2001
through June 30, 2009. SFAS No. 109 requires the establishment of a deferred
tax asset for all deductible temporary differences and operating loss
carryforwards. Because of the uncertainty that the Company will generate
income in the future sufficient to fully or partially utilize these
carryforwards, however, any deferred tax asset is offset by an allowance of
the same amount pursuant to SFAS No. 109. Accordingly, no deferred tax asset
is reflected in these financial statements.
(3) COMMITMENTS AND CONTINGENCIES
The Company announced on March 22, 1994, an offer to purchase The
Meadowlands Sports Complex and Monmouth Park for $1 Billion from the New
Jersey Sports and Exposition Authority. An alternative offer also was made to
purchase Monmouth Park and The Meadowlands Race Track improvements for $125
million and to enter into a long-term lease for the Meadowlands Race Track for
$50 million per year. The offer is subject, among other conditions, to
adoption by the voters of the State of New Jersey of an appropriate
constitutional amendment authorizing the casino gaming at the Meadowlands and
Garden State Park racetracks. ITB has acquired options to purchase Atlantic
City Race Course and Freehold Raceway. The option on the Atlantic City Race
Course expires on March 18, 1995, with an additional one year option available
for purchase at that time. The option to purchase Freehold Raceway expires on
December 31, 1994. If these options are exercised, the Company could be
committed for up to $43,000,000 in purchase prices. Assuming acceptance of
the Company's offer, the exercise of both racetrack options and adoption of
the said constitutional amendment, the Company proposes to construct
interactive gaming complexes that combine racing, casino gaming and
entertainment on land presently used to stable and train horses at The
Meadowlands and Garden State Park. The ITB offer proposes that up to 12
casinos be constructed and operated in the current stable area of each
racetrack. Atlantic City's existing operating, licensed casino
owners/operators would be offered the opportunity to own and operate all of
those casinos with the Company paid rent by the casino operators. The plan
does provide that tracks can operate casinos within racetrack structures.
Monmouth Park and Atlantic City Race Course would serve as the backstretch and
training centers for The Meadowlands and Garden State Park respectively.
The Company formed a wholly owned subsidiary, International Thoroughbred
Gaming Development Corporation (ITG), which is responsible for implementing
the above project. In addition to the funds expended during the last fiscal
year, the Company is committed to approximately $675,000 in expenses, of which
$445,000 has been recognized during the quarter, related to the development of
this project. The Company's financial commitment could increase if
circumstances warrant.
No assurances can be given that the Company's offer will be accepted or
that the constitutional amendment will be placed on the ballot or adopted.
Furthermore, even assuming such acceptance and adoption, no assurance can be
given that the Company will be able to obtain the required financing.
On August 16, 1986, a putative "class action" was filed against the
Company, its Garden State Race Track, Inc. subsidiary, First Jersey
Securities, Inc. ("First Jersey"), two other broker-dealers, Robert E.
Brennan, the Company's Chairman of the Board and principal stockholder, and
ten other present and former directors of the Company alleging various
violations of federal securities laws and other statutes. On July 8, 1987,
another putative "class action" was filed against the Company, First Jersey,
another broker-dealer, Robert E. Brennan, and six other present and former
directors of the Company alleging various violations of federal securities
laws and other statutes. During fiscal 1988, based upon a change of venue
motion which had been filed by the Company, the U.S. District Court
transferred both cases from the Southern District of New York to the District
of New Jersey. On June 7, 1988 a consolidated amended complaint was filed by
the plaintiffs in the two putative "class action" suits described above in
federal court in Trenton. This complaint was substantially similar to the
original suits filed separately except to name eleven current and former
directors as defendants. On July 27, 1989, based upon motions which had been
filed by the Company, the United States District Court, District of New Jersey
dismissed several, but not all, of the claims and allegations contained in the
consolidated amended complaint. On October 20, 1993, the United States
District Court for the District of New Jersey signed an order granting
preliminary approval to a proposed partial settlement of the claims. Although
the Company believes this lawsuit is totally without merit, it has incurred
approximately $1,150,000 in legal expense in defending against the lawsuit and
would have been required to expend significant additional amounts to continue
the defense through trial. In order to avoid further expense, inconvenience
and delay and to dispose of this expensive, burdensome and protracted
litigation, the Company executed a proposed partial Settlement Agreement. The
proposed partial settlement required the Company to make a $250,000
settlement payment and an additional payment of up to $150,000 contingent upon
receipt of future amounts by the Company from its sale of the Philadelphia
Park mortgage note. If effectuated, the settlement would dispose of all class
claims made against the Company, its officers and directors and all derivative
claims made on behalf of the Company against all parties in the litigation.
As part of the proposed settlement, the Company's directors and officers'
liability insurance carrier will pay $3,125,000 plus an additional $4,125,000
which latter amount is subject to reduction on a dollar for dollar basis in
the event of collections from certain non-settling defendants or in the event
of collection of any of the above described $150,000 contingency payment. On
April 12, 1994, an order was entered approving the settlement agreement and
entering a final judgement of dismissal of the plaintiffs claims against the
Company and the Director defendants in their capacity as officers and
directors of the Company. Certain non-settling defendants have appealed the
order approving the settlement. In the event the settlement is upset on
appeal, the Company intends to continue to vigorously contest this lawsuit.
An estimate of any potential loss cannot be made at this time.
(4) INVESTMENT INCOME REVENUE
Investment income revenue consists primarily of gains realized on
trading securities.
(5) NET INCOME (LOSS) PER SHARE
Income per share for the three months ended September 30, 1994 and 1993
is computed on the weighted average number of shares outstanding. The
conversion period for the Convertible Preferred Stock concluded as of July 31,
1993, therefore the Convertible Preferred Stock has not been included in the
computations. The number of shares used in the computations were 9,551,301
and 9,538,066 at September 30, 1994 and 1993, respectively.
(6) OPINION OF MANAGEMENT
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three
months ended September 30, 1994 are not necessarily indicative of the results
that may be expected for the year ended June 30, 1995. The unaudited
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and footnotes thereto included in the
Company's Form 10-K for the year ended June 30, 1994.
(7) NEW AUTHORITATIVE PRONOUNCEMENTS
SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" is
effective for fiscal years beginning after December 15, 1994. The Company
does not have any loans that are subject to an impairment assessment as
defined by SFAS No. 114.
SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions", is effective for fiscal years beginning after December 15,
1992. SFAS No. 112, "Employers' Accounting for Postemployment Benefits, is
effective for fiscal years beginning after December 15, 1993. The Company
does not provide postretirement or postemployment benefits as defined by SFAS
Nos. 106 and 112.
<PAGE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
Independent accountants have reviewed the financial information herein
in accordance with standards established by the American Institute of
Certified Public Accountants. All adjustments and additional disclosures
proposed by said independent accountants have been reflected in the data
presented.
<PAGE>
Review Report of Independent Accountant's
The Board of Directors and Shareholders
International Thoroughbred Breeders, Inc.
and Subsidiaries
We have reviewed the accompanying condensed consolidated balance sheet
of International Thoroughbred Breeders, Inc., and subsidiaries as of September
30, 1994, and the related condensed consolidated statement of shareholders'
equity for the three month period then ended, and the condensed statements of
operations, and cash flows for the three month periods ended September 30,
1994 and 1993. These financial statements are the responsibility of the
company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications
that should be made to the condensed consolidated financial statements
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of June 30, 1994, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for the year then ended (not presented herein); and in our report
dated August 9, 1994, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of June 30, 1994,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
MORTENSON AND ASSOCIATES, P.C.
Certified Public Accountants
Cranford, New Jersey
October 28, 1994
<PAGE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
MANAGEMENT ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
OPERATIONS
Total revenues for the three months ended September 30, 1994 and 1993
were $7,586,214 and $7,581,601 respectively. This increase represents less
than 1% during comparable periods and primarily reflects an increase in
investment income from the sale of trading securities partially offset by a 4%
decrease in revenues generated by the racetrack segment. Management believes
that the breeding operation has become insignificant to the overall operation
of the Company. The loss before taxes for breeding operations for the three
months ended September 30, 1994 was $37,312 as compared to a loss of $30,516
for the three months ended September 30, 1993.
For the first quarter of fiscal 1995, the Company realized net income
from operations of $46,610 as compared to income of $531,368 for the
corresponding year. The decrease of $484,758 in net income for the three
month period just ended primarily resulted from: 1) a decrease in net income
from the racetrack segment; 2) increased corporate expenses associated with
the development of casino gaming within racetrack structures, via the
Company's newly established wholly owned subsidiary, International
Thoroughbred Gaming Development Corporation ("ITG"); and 3) a loss generated
by the breeding segment; partially offset by 4) the increased investment
revenue discussed above.
Depreciation expense for the quarters ended September 30, 1994 and 1993
was$142,330 and $140,908, respectively.
During the three months ended September 30, 1994, the racetrack segment
realized income of $295,903 before tax expense and interest due the parent
company of $2,614,575.
During the three months ended September 30, 1994, Garden State Park's
revenue decreased $326,101 or 4%, from $7,451,140 to $7,125,039 for the
corresponding three month periods in fiscal 1995 and 1994, primarily
reflecting the net effect of: 1) a decrease in revenues generated from
intra-state simulcasting (which is simulcasting to and from the racetrack and
other New Jersey tracks) and a decrease in revenues from the live handle on
the Garden State Park harness races in September; partially offset by 2)
increased revenues generated by the simulcasting of Garden State Park's live
races to out-of-state racetracks. Expenses before interest increased
$106,741 or 2% for the three months ending September 30, 1994 when compared to
the same period last year. Garden State Park experienced at its current live
Harness Meet a 9% decrease in average daily handle during the first quarter of
fiscal 1995 as compared to the first quarter of fiscal 1994. As a result of
the decreased revenues and increased expenses, Garden State Park realized
income from operations, before interest due the parent company, of $295,903 as
compared to income of $728,745 in the same quarter last fiscal year.
Garden State Park's 1994 Standardbred (Harness) Racing Meet began
September 7, 1994 and is scheduled to run 55 dates on a four night per week
basis until December 10, 1994.
On-track wagering during the current Harness Meet, through September
30th, averaged $225,754 over 15 dates of live racing. During the 1993 Harness
Meet in the same quarter of fiscal 1994, on-track wagering averaged $247,253
over 14 dates of live racing.
The following summarizes the average handle associated with the
simulcast activity at Garden State Park during the first three months of both
fiscal 1995 and 1994.
<TABLE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITIONS
AND RESULTS OF OPERATIONS
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
GARDEN STATE PARK SUMMARY OF AVERAGE
HANDLES ASSOCIATED WITH SIMULCASTING
July 1 thru September 30,
FISCAL 1995 FISCAL 1995
Number Average Number Average
of Days Handle of Days Handle
<CAPTION>
SIMULCAST OF GARDEN STATE
PARK RACES TO:
<S> <C> <C> <C> <C> <C>
Monmouth Park (S) 15 22,099 14 19,301
Freehold Racetrack (S) 15 80,294 14 72,992
The Meadowlands (S) 15 339,696 14 392,258
Out-Of-State Tracks (S) 15 658,532 14 341,875
Atlantic City Casinos (S) 15 31,219 14 29,480
SIMULCAST OF RACES TO GARDEN
STATE PARK RACES FROM:
Monmouth Park (T) 49 86,378 49 110,920
Atlantic City Racetrac (T) 40 69,464 48 117,337
The Meadowlands (T) 19 101,305 18 143,336
Freehold Racetrack (S) 38 36,086 42 43,173
The Meadowlands (S) 31 101,713 33 146,677
Out-Of-State Tracks (T,S) 92 202,589 92 191,964
T=Thoroughbred Races S=Standardbred (Harness) Races
LIQUIDITY AND FINANCIAL RESOURCES
The Company's working capital as of September 30, 1994 was $17,295,659
which represents an increase of $1,955,424 from the first quarter of fiscal
1994. This increase is primarily the net result of increased cash flows from
operations during the twelve month period as compared to last. The sale of a
broodmare or stallion share, the only unusual source of liquidity from the
breeding operations, reduces the producing assets of the Company and would
have an effect on future earnings; the sale of foals would not. In response
to what management believed to be a long term downturn in the bloodstock
market, the Company significantly reduced its bloodstock holdings to the
extent that the breeding stock currently available for sale is an
insignificant factor with regard to future earnings and a source of liquidity.
The Company is committed to a minimum of $675,000 in expenses, of which
$445,000 has been recognized, related to the pursuit of casino development
under the direction of the newly created International Thoroughbred Gaming
Development Corporation subsidiary. (See Note 3) The Company is also
committed to spending approximately $330,000 in connection with the
development of the 56 acre parcel of racetrack property as a retail shopping
center.
INFLATION
To date, inflation has not had a material effect on the Company's
operations.
<PAGE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
Part II
OTHER INFORMATION
Item 6.
The Company did not file any reports on 8-K with respect to the quarter
ended September 30, 1994.
<PAGE>
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
AND SUBSIDIARIES
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 thereunto duly authorized.
INTERNATIONAL THOROUGHBRED BREEDERS, INC.
November 4, 1994
/s/Arthur Winkler
President and Director
November 4, 1994
/s/William H. Warner
Treasurer, Principal Financial and
Accounting Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000320573
<NAME> INTERNATIONAL THOROUGHBRED BREEDERS, INC.
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 17,715,451
<SECURITIES> 0
<RECEIVABLES> 1,078,672
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 22,063,125
<PP&E> 53,337,328
<DEPRECIATION> 810,295
<TOTAL-ASSETS> 75,846,827
<CURRENT-LIABILITIES> 4,767,466
<BONDS> 0
<COMMON> 19,102,639
0
36,244,575
<OTHER-SE> 14,507,381
<TOTAL-LIABILITY-AND-EQUITY> 75,846,827
<SALES> 7,094,007
<TOTAL-REVENUES> 7,586,214
<CGS> 1,278,377
<TOTAL-COSTS> 5,910,630
<OTHER-EXPENSES> 5,671,784
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,500,596
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,500,596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,500,596
<EPS-PRIMARY> 0.000
<EPS-DILUTED> 0.000
</TABLE>
