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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997
COMMISSION FILE NO. 2-70345-NY.
BUFFS-N-PUFFS, LTD.
(Exact name of Registrant as specified in its Charter)
Nevada 88-0182534
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
6500 South State Street
Murray, Utah 84107-7219
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code:
(801) 268-9280
Former Address:
n/a
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 filled by Section 13 or 15(d) of the Securities Exchange Act during the
past 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.
(1) Yes: X No:
(2) Yes: X No:
Number of Shares Outstanding at the End of the Fiscal Quarter:
8,004,900 shares of common stock
(Indicate Number of Shares Outstanding of Each Class of Common
Stock as of the end of the Quarter)
Page 1 of 13 consecutively numbered pages.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS REQUIRED BY FORM 10-QSB
Buffs-N-Puffs, Ltd. ("Registrant" or "Company") files herewith an unaudited
balance sheet of the Registrant as of March 31, 1997 and the related statements
of income and cash flows for the three month periods ended March 31, 1997 and
1996 . The unaudited financial statements included in this report on Form 10-QSB
have been prepared by the Company and have not been the subject of independent
review. In the opinion of the management of the Company, the financial
statements fairly present the financial condition of the Company.
-2-
<PAGE>
Buffs-N-Puffs, Ltd.
Consolidated Balance Sheet
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31,
CURRENT ASSETS 1997
-------------------------
<S> <C>
Cash $ 129,718
Receivables (Note E) 16,970
Marketable Securities (Note A) 341,028
Inventory (Note A) 22,390
Prepaid Expenses & Supplies 47,281
-------------------------
Total Current Assets 557,387
PROPERTY, PLANT AND EQUIPMENT (at cost)
Building Improvements 202,691
Building 1,494,000
Furniture, Fixture & Equipment 939,131
Land 891,185
-------------------------
3,527,007
Less Accumulated Depreciation (761,263)
-------------------------
Total Property, Plant & Equipment 2,765,744
OTHER ASSETS
Startup Costs 42,596
Deposit 1,433
Montana Property 52,590
Deferred Tax Asset 93,400
-------------------------
Total Other Assets 190,019
-------------------------
TOTAL ASSETS $ 3,513,150
=========================
</TABLE>
-3-
<PAGE>
Buffs-N-Puffs, Ltd.
Consolidated Balance Sheet
(Unaudited)
LIABILITIES AND STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
March 31,
CURRENT LIABILITIES 1997
---------------------------
<S> <C>
Accounts Payable, Payroll and Sales Tax $ 113,237
Loan Payable 153,637
Loans Payable - Related Parties 163
---------------------------
Total Current Liabilities 267,037
LONG TERM LIABILITIES
Long Term Liabilities 1,845,480
---------------------------
Total Long Term Liabilities 1,845,480
---------------------------
Total Liabilities 2,112,517
Capital Stock, common 846
Additional paid in capital 1,278,268
Retained Earnings (deficit) 170,471
---------------------------
1,449,585
Less Treasury Stock (48,952)
---------------------------
1,400,633
---------------------------
TOTAL LIABILITY AND STOCKHOLDERS EQUITY $ 3,513,150
===========================
</TABLE>
-4-
<PAGE>
Buffs-N-Puffs, Ltd.
Consolidated Statement of Operations
(Unauditied )
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
March 31, March 31
REVENUES: 1997 1996
- ---------
----------------- -----------------
<S> <C> <C>
Car Wash $ 331,204 $ 343,277
Boutique Net 5,894 7,076
Fuel Sales - Net 3,510 4,846
Carpet Express Equipment - Net 0 402
Discounts (2,928) (2,100)
----------------- -----------------
TOTAL REVENUES 337,680 353,501
COSTS AND EXPENSES
Salaries, Labor and Commissions 159,537 150,285
Taxes and Benefits 30,148 25,793
Interest and Credit Card Fees 55,059 18,335
Travel, Auto, Promotional and Advertising 4,808 5,311
Office, Telephone, Printing and Supplies 40,512 35,574
Utilities, Maintenance, Rent and Insurance 33,900 42,357
Depreciation and Amortization 36,732 25,558
Professional Fees and Other 32,670 22,862
----------------- -----------------
TOTAL COSTS AND EXPENSES 393,366 326,075
----------------- -----------------
Net Income (Loss) before Other Income (55,686) 27,426
Contract Services and Miscellaneous (7,469) 899
Interest and Dividends 7,051 1,555
Gain (loss) on Sale of Securities (2,673) 18,791
----------------- -----------------
(3,091) 21,245
Income Taxes 0 0
----------------- -----------------
NET INCOME $ (58,777) $ 48,671
================= =================
NET INCOME PER SHARE NIL NIL
================= =================
</TABLE>
-5-
<PAGE>
Buffs-N-Puffs, Ltd.
Consolidated Statement of Stockholders Equity
(Unaudited)
STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
----------- ---------- ----------- -------------
<S> <C> <C> <C> <C>
Balances 12/31/93 6,113,900 $ 611 $ 1,120,692 $ (122,044)
Net income for year ended 12/31/94 109,604
----------- ---------- ----------- -------------
Balances 12/31/94 6,113,900 611 1,120,692 (12,440)
Net income for year ended 12/31/95 133,857
----------- ---------- ----------- -------------
Balances 12/31/95 6,113,900 611 1,120,692 121,417
Net income for year ended 12/31/96 107,831
Stock issued for assets 2,000,000 200 124,800
Restricted stock issued to employees 350,000 35 32,776
----------- ---------- ----------- -------------
Balances 12/31/96 8,463,900 846 1,278,268 229,248
Net loss for Quarter Ended 3/31/97 (58,777)
----------- ---------- ----------- -------------
Balances 3/31/97 8,463,900 $ 846 $ 1,278,268 $ 170,471
=========== ========== =========== =============
</TABLE>
-6-
<PAGE>
Buffs-N-Puffs, Ltd.
Consolidated Statement of Cash Flows
(Unaudited)
CASH FLOW STATEMENT
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------
OPERATING ACTIVITIES March 31, 1997 March 31, 1996
------------------------- -------------------
<S> <C> <C>
Net Income (loss) $ (58,777) $ 48,847
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Write off Obsolete Asset 8,895 0
Depreciation and Amortization 36,732 25,558
(Increase) Decrease in Receivables (1,248) (11,669)
(Increase) Decrease in Pre-Paid Expense, Supplies and Deposits 3,798 (31,028)
(Increase) Decrease in Inventory (3,556) 7,793
Increase (Decrease) in Accounts Payable and Payroll Tax Payable 58,445 12,503
------------------------- -------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 44,289 52,004
INVESTING ACTIVITIES
Increase in Start Up Costs 0 0
Decrease in Deposits 0 2,932
Cost of Securities Sold 8,273 99,310
Land Purchase 0 (581,000)
Purchase of Securities (6,069) (122,561)
Purchase of Property and Equipment (80,574) (1,496,001)
------------------------- -------------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (78,370) (2,097,320)
FINANCING ACTIVITIES
Repayment of Loans and Leases (61,697) (39,559)
Increase in Long Term Debt 0 1,950,000
Issue common stock 0 125,000
------------------------- -------------------
(61,697) 2,035,441
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (95,778) (9,875)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 225,496 177,086
------------------------- -------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 129,718 $ 167,211
========================= ===================
</TABLE>
-7-
<PAGE>
Buffs-N-Puffs, Ltd.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE A - Summary of Significant Accounting Policies
Revenue Recognition
Interest income is accrued as earned. Gains or losses on the sale of securities
are recorded as of the trade date.
Depreciation
Depreciation on office equipment and furniture is provided over the estimated
useful life of five to ten years using an accelerated method and depreciation on
the office building is being provided over the estimated useful life of 30 to
31.5 years using the straight line method.
Marketable Securities
Marketable securities, as a group, are carried at market value in accordance
with FAS #115. Prior to January 1, 1994, the securities were carried at the
lower of cost or market. At December 31, 1996, a decrease of $31,519 was made to
adjust to market ($10,207 increase was made for 1995 and $9,666 decrease was
made for 1994).
Income Taxes
No federal income taxes were due for the year ended December 31, 1996. At
December 31, 1996, the Company had unused general business credits of $7,844
which expire in 1998 thru 2000, and contributions carryover of $32,524, expiring
in 1998 through 2001. The Company has a capital loss carryover of $14,340 which
expires in 1997. The Company also has a net operating loss carryover which if
not used will expire as follows:
Year Ended Amount Expiration Date
----------------- --------- ---------------
December 31, 1990 $ 299,501 12/31/2005
December 31, 1991 123,837 12/31/2006
---------
$ 423,338
Inventory consists of items for sale and use in the operations of the carwash.
Inventory is recorded at lower of cost or market, on a first-in, first-out
basis.
Cash and Cash Equivalents
For financial statement purposes, the company considers all highly liquid
investments with an original maturity of three months or less when purchased to
be cash equivalents.
-8-
<PAGE>
NOTE B - COMMITMENTS
The company is also obligated under a maintenance contract on its signs.
The contract was signed to be effective in January of 1991 and is three years in
length with monthly payments of $789. The contract was renewed in 1996 for an
additional three years, through December 31, 1999.
NOTE C - LOANS PAYABLE
On March 26, 1996 the Company entered into an agreement with Daniel F.
Pentelute, to purchase the carwash buildings and land. The company took out a
mortgage of $1,800,000 and a line of credit of $150,000. In addition 2,000,000
shares of stock were issued to Mr. Pentelute at a price of 1/8 or $125,000. The
total purchase price was $2,075,000. The purchase price was below the appraised
value of $2,400,000 actual and $3,600,000 replacement cost. The loan agreements
were signed with Bank One, Utah. The $1,800,000 loan is a 20 year amortization
with a 5 year call at 8.26% interest. The line of credit is a 1 year renewable
term at 8.25% interest. During March 1997 the Company repaid $50,000 of the line
of credit and extended the line until June of 1997.
<TABLE>
<CAPTION>
1997 1996
Interest ------------------------------------ -------------------------------------
Rate % Current Long-Term Current Long-Term
------------------ ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
G. Phillip Condie* 7.50 $ 0 $ 120,000 $ 50,000 $ 95,000
Escrow Services 9.50 5,000 10,553 4,631 16,675
Dan Pentelute 8.75-10.5 163 0 163 0
Bank One 8.26 47,417 1,716,146 185,843 1,614,157
Bank One 8.25 100,000 0 150,000 0
----------------- ---------------- ---------------- -----------------
$ 152,580 $ 1,846,699 $ 390,637 $ 1,725,832
================= ================ ================ =================
</TABLE>
*Monthly payments of interest are only $1,888 with principal payments of $25,000
due March 1 and September 1 of 1994, 1995 and 1996 and the balance due by
9/1/1998. This loan is secured by land with a cost of $310,185.
Scheduled principal reductions for the next five years are as follows:
12/31/97 $ 152,580
12/31/98 168,986
12/31/99 48,195
12/31/2000 52,331
Thereafter 1,577,189
-----------
$ 1,999,279
===========
-9-
<PAGE>
NOTE D - DEFERRED TAX ASSET
In February, 1992, the Financial Account Standards board adopted Statement of
Financial Accounting Standards No. 109 Accounting for Income Taxes, which
supersedes substantially all existing authoritive literature for accounting for
income taxes and requires deferred tax balances to be adjusted to reflect the
tax rates in effect when those amounts are expected to become payable or
refundable. The Statement was applied in the Company's financial statements for
the calendar year commencing January 1, 1993 by recognizing the cumulative
effect of the change during 1993.
NOTE E - RECEIVABLES
Receivables at March 31, 1996 and 1995 consisted of the following:
March 31, March 31,
1997 1996
---------- ----------
Trade accounts receivable $ 16,970 $ 27,910
---------- ----------
NOTE F - START-UP COSTS
These are costs associated with development of the carwash. The costs are being
amortized, depreciated or expensed. The costs include travel to view other
carwashes, equipment, inventory, legal fees for patents and trademarks, etc.
During 1994 and 1995 the Company spent $25,900 associated with property being
held for development into a second carwash operation. The cost will be amortized
when the land is sold.
NOTE G - MONTANA LAND
During 1994, Daniel Pentelute, the major shareholder of the Company, purchased
21 acres of land in Montana and three (3) days later sold a one-half interest to
the Company at his cost. The other one-half interest is owned by Desert Land
Enterprises, whose sole shareholder is Daniel Pentelute. It is anticipated that
the Company will be able to sell the land in the future at a substantial profit.
-10-
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND OPERATING
RESULTS.
Changes in Financial Condition
At March 31, 1997 the Company had current assets of $557,387 compared to
$654,363 as of December 31, 1996. Cash decreased $95,778 from $225,496 as of
December 31, 1996 to $129,718 as of March 31, 1997. This decrease is due to
purchase of new equipment and reducing debt. Current liabilities increased
$8,446 from $258,591 as of December 31, 1996 to $267,037 as of March 31, 1997.
This increase is due to purchase of new equipment.
Inventory increased $3,556 from $18,834 as of December 31, 1996 to $22,390 as of
March 31, 1997.
Changes in Results of Operations
Carwash volume decreased 489 cars from 24,434 for the 3 month period ended March
31, 1996 to 23,945 for the same period ended March 31, 1997. Volume reduction is
mainly due to weather.
Revenue for the 3 month period ended March 31, 1997 was $337,680 compared to
$353,501 for the same 3 month period ended March 31, 1996, a decrease of
$15,821, or 4.5%.The revenue decrease is due to lower carwash volumes, lower
sales of carwash packages and express detail services.
During the 3 months ended March 31, 1997 costs and expenses were $393,366
compared to $326,075 for the same period ended March 31, 1996, an increase of
$67,291 or 21%. Costs and expense increases are mainly due to higher salaries
and resulting payroll taxes, higher depreciation expense, resulting from new
equipment purchases, and interest costs relating to the purchase of the carwash
building and land.
At March 31, 1997 the Company posted a net loss of ($58,777) compared to a net
profit of $48,671 for the same period ended March 31, 1996. Net loss per share
for the period was negligible.
As of March 31, 1997 cash and equivalents were $129,718 compared to $167,211 for
the same period ended March 31, 1996.
The current ratio as of March 31, 1997 was 2.05 compared to 1.12 as of March 31,
1996. Long term liabilities were $1,845,480 as of March 31, 1997 compared to
$1,725,375 as of March 31, 1996. Management believes that sufficient working
capital exists for continuing its operations.
-11-
<PAGE>
PART II.
ITEM 1. LEGAL PROCEEDINGS
During the reporting period the Company was not party to any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The Registrant has no securities which are reportable under this item.
ITEMATTERS SUBMITTED TO A VOTE OF THE COMPANY'S
SHAREHOLDERS
No matters were submitted to a vote of the Company's shareholders during this
quarter.
-12-
<PAGE>
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.
Buffs-N-Puffs, Ltd.
By: /s/ Alan R. Theis
-----------------------------
Alan R.Theis
On Behalf of the Registrant
and as Secretary/Treasurer
and Chief Financial Officer
Dated May 6,1997.
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Buffs-N-Puffs March 31, 1997 financial statements and is qualified in
its entirety by reference to such financial statemetns.
</LEGEND>
<CIK> 000350133
<NAME> Buffs N Puffs LTD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 129,718
<SECURITIES> 341,028
<RECEIVABLES> 16,970
<ALLOWANCES> 0
<INVENTORY> 22,390
<CURRENT-ASSETS> 557,387
<PP&E> 3,527,007
<DEPRECIATION> 761,263
<TOTAL-ASSETS> 3,513,150
<CURRENT-LIABILITIES> 267,037
<BONDS> 0
0
0
<COMMON> 846
<OTHER-SE> 1,399,787
<TOTAL-LIABILITY-AND-EQUITY> 3,513,150
<SALES> 340,608
<TOTAL-REVENUES> 337,680
<CGS> 0
<TOTAL-COSTS> 393,366
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41,620
<INCOME-PRETAX> (58,777)
<INCOME-TAX> 0
<INCOME-CONTINUING> (58,777)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (58,777)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
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