UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended March 31, 1997
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Commission File Number 0-3858
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INTERNATIONAL LEISURE HOSTS, LTD.
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(Name of Small Business Issuer in its Charter)
Wyoming 86-0224163
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1702 E. Highland Ave., Ste. #312, Phoenix, AZ 85016
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(Address of principal executive office) (Zip Code)
Issuer's telephone number (602) 266-0001
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Securities registered under Section 12(b) of the Act:
Name of each exchange
Title of Each Class on which registered
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NONE
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Securities registered pursuant to Section 12(g) of the Act:
Common Stock $.01 par value
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(Title of Class)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No
--- ---
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B. If not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]
State issuer's revenues for its most recent fiscal year. $4,093,559
-------------
As of June 9,1997, there were 694,577 shares of common stock outstanding and the
aggregate market value of the common shares (based on the average of the bid and
ask price of these shares on the NASDAQ over the counter market) of ILHL held by
non-affiliates was approximately $550,341.
<PAGE>
PART I
Page
----
Item 1. Business 3
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of 6
Security Holders
PART II
Item 5. Market for the Registrant's Common 7
Stock and Related Security Holder Matters
Item 6. Management's Discussion and Analysis 9
of Financial Condition and Results of Operations
Item 7. Financial Statements and Supplemental Data 12
Item 8. Changes in and Disagreements with 21
Accountants on Accounting and Financial Disclosure
PART III
Item 9. Directors and Executive Officers of the Registrant 21
Item 10. Executive Compensation 22
Item 11. Security Ownership of Certain 23
Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions 25
PART IV
Item 13. Exhibits (including Exhibit Index), 26
Financial Statements, Schedules and
Reports on Form 8-K
2
<PAGE>
PART I
Item 1. Business
The statements contained in this Report regarding management's anticipation
of the Company's facility completion schedules, quality of facilities,
fulfillment of National Park Service requirements, consumer response to
marketing efforts, ability to offset inflation and adequacy of financing,
constitute "forward-looking" statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Management's anticipation is based
upon assumptions regarding levels of competition, acceptance of facilities by
consumers, favorable weather conditions, ability to complete facility
construction, the market in which the Company operates, the stability of the
economy and stability of the regulatory environment. Any of these assumptions
could prove inaccurate, and therefore there can be no assurance that the
forward-looking information will prove to be accurate.
International Leisure Hosts, Ltd. (the "Company") was formed under Wyoming
law as a corporation on October 18, 1962. The principal business of the Company
is the ownership and operation of Flagg Ranch Village ("Flagg"), a full-service
resort motel and trailer park located in the John D. Rockefeller Jr. Memorial
Parkway approximately four miles north of Grand Teton National Park ("Grand
Teton") and two miles south of the southern entrance of Yellowstone
National Park ("Yellowstone").
Flagg undertook a major redevelopment plan in fiscal year 1995 which
included construction of a new main lodge building, plus 50 new cabin units. The
new lodge and cabins opened for business in May 1995. The lodge, which replaced
existing facilities, includes a restaurant, lounge, gift shop, grocery store,
front desk and gasoline station. The 50 new cabin units replaced 42 rustic cabin
units, which will be removed from the property. During fiscal year 1996, the
Company began construction of an additional 42 new cabin units, a maintenance
building and a laundry facility. The 42 new cabins were substantially complete
in December 1996 and were rented during the winter season. Although these cabins
were ready for occupancy during the winter, certain finish items on the outside
of the cabins could not be completed until the summer of 1997. It is anticipated
that the new maintenance and laundry facilities will be completed by August 31,
1997.
During fiscal year 1996, Flagg provided overnight accommodations to
national park visitors for up to 372 persons per night via its 54-unit motel and
50 cabins. Upon substantial completion of the 42 cabins in December 1996, Flagg
increased its overnight accommodations to 536 persons per night via its 54-unit
motel and 92 cabin units. In addition to the motel and cabin units, Flagg
operates a full service trailer park and campground that provides water,
electrical and sewer connections for 97 recreational vehicles, plus 74 campsites
without utility hookups.
Flagg is operated as a seasonal resort. The two seasons, summer and winter,
coincide with the opening and closing dates of the two national parks.
The summer season, which runs from approximately May 15th through October
15th of each year, is the height of activity at Flagg. In addition to the motel
and trailer park/campground accommodations, Flagg offers numerous services and
activities for the guests' enjoyment including Snake River float trips,
horseback riding and a variety of scenic hiking trails. The summer season
accounted for 74% of Flagg's fiscal 1997 and 1996 operating revenues.
Prior to the recently completed redevelopment of its facilities, Flagg was
not a destination stop in the summer, but instead provided basic services for
visitors to the two national parks. Most of the guests stayed one to two nights
and the majority of the patrons represented overflow from other national park
facilities similar to those provided by Flagg. However, with the completion of
the new main lodge and cabin units, Flagg now offers facilities equal or
superior to those of other national park concessionaires. As a result, Flagg
intends to develop a reputation as a destination location for visitors in
addition to catering to guests staying only one to two nights.
3
<PAGE>
The winter season, which runs from mid-December through mid-March accounted
for 26% of Flagg's fiscal 1997 and 1996 operating revenues. Yellowstone receives
approximately 150 to 400 inches of snowfall per year which turns the park into a
winter recreational destination. The National Park Service ("NPS") grooms, but
does not plow, the snow on the roads inside the park. The only modes of
transportation into the park are snowmobile and snowcoach.
Flagg's location at the south entrance to Yellowstone makes it a premiere
location for winter visitors. The road is well plowed from Jackson, Wyoming to
the entrance to Flagg offering easy access to Flagg for visitors. However,
visitors cannot proceed past Flagg and into Yellowstone unless they are
traveling via snowmobile or snowcoach. Flagg is the only vendor licensed by the
NPS with unguided snowmobile tours at the south entrance to Yellowstone. In
fiscal year 1997, Flagg had a fleet of 85 new Polaris snowmobiles available to
the public for rental. In addition, Flagg offers daily trips to Old Faithful
Lodge in Yellowstone via its 11-passenger snowcoach. Cross-country skis and
snowshoes are also available for rental.
The Company receives its operating authorization from the NPS. The NPS
Contract (the "Contract") which became effective on January 1, 1990 will expire
on December 31, 2009. The Contract requires the Company to provide certain
services to the public and authorizes other services that may be offered each
year. It grants the NPS the right to regulate the adequacy, types and charges of
all services offered to the public. The terms and conditions of the Contract are
under the direct supervision of the Superintendent of Grand Teton National Park.
The fee expense under the Contract is subject to review and adjustment every
five years. For fiscal 1997, the fee was calculated at 2% of gross receipts (as
defined in the Contract).
Flagg faces competition from hotels, camping areas and trailer facilities
in Yellowstone and in Grand Teton as well as from a large number of hotels and
motels in Wyoming, Montana and Idaho offering some facilities which are similar
to those offered by Flagg. In addition, the business of Flagg is susceptible to
weather conditions and unfavorable trends in the economy as a whole. In 1997,
extreme winter weather conditions caused numerous closures of local airports,
roads, and national parks, primarily during the Christmas holiday season,
traditionally the strongest period of the winter season. These closures,
combined with record snowfall throughout the remainder of the winter resulted in
lower than anticipated winter season revenues for fiscal 1997.
Business could be significantly affected depending upon actions which might
be taken by the NPS if cutbacks are made to their budget. If the NPS decides to
close Yellowstone for the winter months, then Flagg would have to discontinue
its winter operations. NPS budget cutbacks could also negatively impact the
length of the summer season and the number of visitors to the parks and have a
corresponding negative impact on Flagg revenues.
The Federal Government's inability to reach a budget agreement resulted in
a partial shutdown of the Government which included the closure of Yellowstone
from mid-December 1995 to January 5, 1996. As a National Park Concessioner,
Flagg was forced to close, and it remained closed during the Christmas holiday
season.
4
<PAGE>
The Company estimates the operating revenue lost as a result of this closure was
in excess of $300,000 for fiscal 1996.
On May 20, 1997, the Fund for Animals, Biodiversity Legal Foundation et.
al. filed a lawsuit against the National Park Service challenging the action of
the NPS regarding winter use of Yellowstone and Grand Teton National Parks. The
plaintiffs have asked the Federal Court to stop winter activities, primarily
snowmobiling and related snow grooming, until environmental impacts are
documented. If the Federal Court were to suspend or terminate winter activities
in Yellowstone, then Flagg would have to suspend or discontinue its winter
operations.
The Company employed 335 individuals in fiscal 1997, consisting of 306
part-time employees and 29 full-time employees. The maximum number of employees
at any one time during fiscal 1997 was 138.
Item 2. Properties
The Flagg facilities are located on approximately 70 acres in the John D.
Rockefeller Jr. Memorial Parkway. This entire tract of land which the Company
utilizes is owned by the Federal Government and its usage is governed by the
terms of the Contract.
Proprietary rights to certain facility improvements constructed by the
Company (including the new lodge and new cabin units) have been granted to the
Company under the terms of the Contract; however, the NPS may terminate the
Contract and purchase the Company's improvements, upon a determination that the
public interest requires Federal Government ownership of the improvements. In
such event, the Federal Government is required to pay a price for said
improvements equal to the cost of reconstruction less depreciation. If, however
the Contract is terminated by the Federal Government for default by the Company
for unsatisfactory performance as defined in the Contract, then the Federal
Government is required to pay a price equal to the tax basis of the
improvements. At the end of the Contract, if the Company is not the successful
bidder on a new contract for the property, then the Federal Government is
required to purchase from the Company certain improvements (including the new
lodge and new cabin units) made to the property at a price equal to the cost of
reconstruction less depreciation.
During fiscal year 1996, the Company commenced construction of 42 new cabin
units, which were substantially completed and placed in service in December,
1996. When completed, the total cost will be approximately $1,320,000, of which
$1,250,000 was incurred as of March 31, 1997. With the substantial completion of
the 42 new cabin units in December 1996, the Company has a total of 146 lodging
units consisting of 92 cabin units and a 54-unit riverside motel complex. During
fiscal year 1997, the Company commenced construction of new laundry and
maintenance facilities, which are scheduled to be completed by August 31, 1997
for an estimated cost of $170,000.
Under the terms of the Contract, the Company is required to move the
existing 54-unit riverside motel from its current location to the high ground
above the river, to provide for new employee housing and make other improvements
prior to December 31, 1999. If the Company chooses to meet these requirements by
moving the riverside motel and converting it into employee housing plus building
additional employee housing and a new employee dining facility, then the cost is
estimated to be between $2,400,000 and $2,800,000 depending on the number of
employee housing units and the extent of additional improvements required by the
NPS. If the Company builds new lodging units to replace the 54-unit riverside
5
<PAGE>
motel, the additional cost to build these units will be between $1,000,000 and
$1,200,000. This would result in a total cost of relocation and new construction
combined of between $3,400,000 and $4,000,000.
On a temporary basis, during the summer of 1997, twenty-five recreational
vehicle sites and one tent site will not be available for rental to the public.
These sites will be utilized by construction workers during the construction
period and by employees until the new employee recreational vehicle sites are
completed. This reduces the campground facility to 72 recreational vehicle sites
and 73 tent sites, and thus will negatively impact campground revenues during
fiscal year 1998.
Item 3. Legal Proceedings
There are no material legal proceedings against International Leisure
Hosts, Ltd.
Item 4. Submission of Matters to a Vote of Security Holders
None
6
<PAGE>
PART II
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Item 5. Market for Registrant's Common Stock and Related Security Holder
Matters
International Leisure Hosts, Ltd. common stock is traded in the
over-the-counter market, quoted by NASDAQ under the symbol "ILHL". The following
table sets forth the high and low bid prices for the stock for each quarter for
fiscal years 1996 and 1997.
Bid
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High Low
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Quarter Ended
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June 30, 1995 5 5
September 30, 1995 5 5
December 31, 1995 5 3/8 5
March 31, 1996 5 7/8 5 3/8
June 30, 1996 5 7/8 5 3/8
September 30, 1996 5 7/8 5
December 31, 1996 5 1/2 4 3/4
March 31, 1997 5 1/2 5
Over-the-counter market quotations reflect inter-dealer prices, without
retail markup, markdown or commissions and may not necessarily represent actual
transactions. As of March 31, 1997 there were 694,577 shares of outstanding
common stock and an estimated 1,100 shareholders of record.
The level of trading during fiscal year 1997 was approximately 1,000 shares
the first quarter, 9,500 shares the second quarter, 2,350 shares the third
quarter, and 3,000 shares the fourth quarter ending March 31, 1997. Trading
activity with respect to the common stock has been limited and the volume of
transactions should not of itself be deemed to constitute an "established public
trading market." A public trading market having the characteristics of depth,
liquidity and orderliness depends on the existence of market makers as well as
the presence of willing buyers and sellers, which are circumstances over which
the Company does not have control.
It is the policy of the Company not to pay dividends but instead to retain
earnings for use in the operation and expansion of its business.
7
<PAGE>
Selected Financial Data
The selected financial data for each of the five years in the period ended
March 31, 1997 have been derived from the Company's audited financial
statements, and should be read in conjunction with the financial statements and
related notes thereto and other financial information appearing elsewhere herein
and in Item 6. The selected financial data is not required by Form 10-KSB and is
included herein as an unnumbered item.
FISCAL YEAR ENDED MARCH 31,
(In thousands except per share amounts)
---------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Total Revenues $ 4,094 $ 3,976 $ 3,781 $ 3,694 $ 3,552
Net Income (Loss) (113) 199 458 536 483
Net Income (Loss) Per Share (.16) .29 .66 .77 .68
Total Assets 5,363 4,266 4,431 3,568 3,100
Long-Term Obligations 446 0 0 0 0
Shareholders' Equity 3,672 3,785 3,604 3,147 2,629
Book Value Per Share 5.29 5.45 5.16 4.50 3.74
8
<PAGE>
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company's net loss was $113,000, ($.16) per share for the year ended
March 31, 1997. This compares to net income of $199,000, $.29 per share, in 1996
and $458,000, $.66 per share, in 1995. The primary factors contributing to the
$312,000 decline in 1997 net income were the severe winter weather conditions in
1997 which caused numerous closures of the local airport, roads and national
parks plus the increased costs associated with the construction and initial
start up of the 42 new cabin units. Changes in the Company's revenues and
expenses for the fiscal years 1997 and 1996 are summarized below. All references
to years represent fiscal years ended March 31.
Total revenues for 1997 increased by $117,000 or 3% over 1996. Of this
increase, $93,000 was from grocery store sales, $31,000 from food services,
$29,000 from gift shop sales, $17,000 from snowmobile parts revenue, $12,000
from insurance proceeds and $7,000 from the sale of old cabins. Decreases of
$48,000 in snowmobile revenue, $15,000 in interest income, $12,000 in gasoline
sales and $10,000 in snowcoach revenue offset the above increases. The total
number of visitors through the south entrance of Yellowstone decreased 4% in
1997 from 1966. While total revenues from room and cabin rentals remained
basically unchanged from 1996 to 1997, the relative mix between motel and cabin
units and the average daily rates changed. In 1996, motel unit rentals totaled
6,308 with an average daily rate of $91 and cabin unit rentals totaled 7,283
with an average daily rate of $94. In 1997, motel unit rentals totaled 5,367
with an average daily rate of $89 and cabin unit rentals totaled 7,759 with an
average daily rate of $100. In 1997, the Company increased its marketing efforts
to have tour buses stop at Flagg for lunch and dinner. The increased number of
tour buses contributed to the improvement in grocery store, food services and
gift shop revenues.
Although the national parks were closed for 19 days during the winter of
1996 because of the Federal Government shutdown, the 1997 winter season was
shorter than the 1996 winter season. The 1997 winter season consisted of only 67
days compared to 75 days in 1996. In 1996 the national parks opened on December
15, 1995 and closed on March 17, 1996, whereas in 1997 the national parks opened
on December 20, 1996 and closed on March 9, 1997. In addition, extreme winter
weather conditions in 1997 caused the closure of local airports, roads and
national parks for 13 days, primarily during the Christmas holiday season. The
number of winter visitors through the south entrance of Yellowstone decreased 7%
in 1997 compared to 1996. As a result, the number of snowmobile rentals
decreased from 4,610 in 1996 to 3,995 in 1997.
Total revenues for 1996 increased by $195,000 or 5% over 1995. Of this
increase, $275,000 was from motel and cabin rentals, $34,000 from grocery store
sales, $104,000 from food services, $35,000 from RV park rentals, $60,000 from
gift shop sales, $48,000 from horse rental revenue, and $63,000 from float trip
revenue. Decreases of $158,000 in snowmobile revenue, $9,000 in snowcoach
revenue, $163,000 in gasoline sales, $59,000 in interest income and $17,000 in
other income offset the above increases. The average daily rates were $91 for
motel units and $94 for cabins compared to $76 and $67 respectively in 1995. The
number of motel and cabin rental days decreased to 13,591 in 1996 from 13,811 in
1995.
9
<PAGE>
Although motel and cabin rental days were down in 1996, the new cabin units
have significantly higher rack rates, resulting in an increase in total lodging
revenue. The new lodge facility has a larger restaurant, gift shop, and grocery
store, which contributed to the increases in these revenues. A better than
average snowfall, along with a wet spring, provided excellent river conditions
resulting in a large increase in float trip revenue. During fiscal 1996, the
Company began offering horse trail rides during the summer season. The decreases
in snowmobile and snowcoach revenue in 1996 were caused by the shutdown of the
Federal Government and related closure of Yellowstone during the Christmas
holiday season, typically the strongest period of the winter season. The
decrease in gasoline sales is primarily a result of the new location of the gas
station away from the main highway.
Costs and Expenses
- ------------------
The ratio of cost of merchandise sold to sales of merchandise was 61% in
1997, 56% in 1996 and 58% in 1995. At the end of the 1997 season, significant
price reductions were made on selected gift shop items in an effort to liquidate
old, stagnant merchandise in preparation for the 1998 season, resulting in an
increased cost of sales percentage. Ending merchandise inventories decreased
from $167,000 at March 31, 1996 to $118,000 at March 31, 1997.
Operating expenses increased by $392,000 or 20% in 1997 as compared to
1996. In addition, the ratio of operating costs to operating revenues increased
to 57% in 1997 up from 49% in 1996. The major increases consisted of $137,000 in
labor, $51,000 in supplies, $48,000 in utilities, $44,000 in snowmobile parts,
$40,000 in repairs and maintenance, $22,000 in transportation rentals, $21,000
in advertising and $20,000 in property taxes. In general the operating expenses
increased due to the addition of 42 new cabin units during 1997, expanded winter
services provided to guests and the impact of the unusually severe winter
weather conditions in 1997. The labor increase was the result of a 9% increase
in the federal minimum wage, in conjunction with increasing the number of staff
in accounting, marketing, housekeeping, motel front desk, reservations and food
services. The bulk of the increase in supplies came from the purchase of initial
start-up supplies for the 42 new cabin units completed in 1997. The number of
cabins opened during the winter season went from 50 in 1996 to 92 in 1997. The
increase in utilities was generated by the 84% increase in cabin units open
during the winter season. In addition, the riverside motel units, which were
closed down during the winter of 1996, were opened for the 1997 winter season
and used as extra employee housing.
Operating expenses increased by $392,000 or 25% in 1996 as compared to
1995. In addition, the ratio of operating costs to operating revenues increased
to 49% in 1996 from 43% in 1995. The major increases in operating expenses were
$173,000 in operating labor, $59,000 in outside services for the float trip and
horse operators, $17,000 in advertising, $25,000 in insurance, $9,000 in
property taxes, $45,000 in utilities, and $52,000 in operating supplies.
Operating expenses increased due to operation of the new facilities, the
additional costs associated with the opening of the new facilities, and the new
and expanded horse rental and float trip operations. The Federal Government
shutdown and closure of Yellowstone contributed greatly to the increase in the
ratio of operating expenses to operating revenues. During the park
10
<PAGE>
closure, the Company lost approximately $300,000 in projected revenue, but was
unable to reduce operating expenses because it had to maintain a full staff at
all times due to the uncertainty of when the shutdown would end.
General and administrative expenses decreased by $66,000 or 12% in 1997 as
compared to 1996. The decrease consisted primarily of reductions in management
fees of $24,000, professional fees of $24,000 and travel of $23,000.
General and administrative expenses ("G&A") increased by $99,000 or 22% in
1996 as compared to 1995. G&A as a ratio of operating revenues was 14% in 1996
as compared to 13% in 1995. There was a $120,000 increase in management fees,
which related to the management of the newly expanded facilities and oversight
of the major construction projects. There was also a $20,000 increase in
professional fees. Decreases of $20,000 in travel and $21,000 in other
administrative expenses offset the above increases.
Inflation
- ---------
The Company expects that it will be able to offset increased costs and
expenses, principally labor, caused by inflation, by increasing prices on its
services with minimal effect on operations.
Liquidity and Capital Resources
- -------------------------------
During the fiscal year ended March 31, 1997, the Company incurred costs of
approximately $976,000 to substantially complete construction of the 42 new
cabin units, which were placed in to service in December 1996. When completed,
the total cost of the cabins will be approximately $1,320,000. During 1997, the
Company also incurred costs of approximately $214,000 relating to construction
of new laundry and maintenance facilities, employee housing, and other
improvements required under the NPS contract. As a result, the working capital
decreased from $16,000 at March 31, 1996 to a negative $677,000 at March 31,
1997. The Company plans to incur additional costs of between $3,400,000 and
$4,000,000 prior to December 31, 1999 to construct new laundry and maintenance
facilities, new employee housing units, new motel units replacing the existing
54-unit riverside motel complex and other improvements required under the NPS
Contract.
The Company intends to fund these improvements through existing cash funds
and cash generated from operations, plus additional borrowings from lenders.
Cash generated from operations was $430,000, $139,000, and $766,000 in fiscal
years 1997, 1996, and 1995, respectively. The Company has two credit facilities
with a bank. The first credit facility provides for maximum borrowings of
$500,000 with a draw period to September 30, 1997. Principal payments begin on
October 30, 1997 in 60 equal monthly installments, maturing on September 30,
2002. As of March 31, 1997 the Company had borrowed $495,000 on this credit
facility. The second credit facility provides for maximum borrowings of $500,000
and matures on September 30, 1997. As of March 31, 1997, the Company had
borrowed $440,000 on this credit facility.
11
<PAGE>
Item 7. Financial Statements and Supplemental Data
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
International Leisure Hosts, Ltd.
Phoenix, Arizona
We have audited the accompanying consolidated balance sheets of International
Leisure Hosts, Ltd. (the "Company") as of March 31, 1997 and 1996, and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended March 31, 1997. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company at March 31, 1997 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended March 31, 1997 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
May 23, 1997
-12-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
1997 1996
<S> <C> <C>
ASSETS (Note 5)
CURRENT ASSETS:
Cash and cash equivalents $ 48,258 $ 49,645
Accounts receivable 31,828 5,633
Accounts receivable (affiliate) 9,800 4,800
Income tax refund receivable 146,404 81,292
Merchandise inventories 118,418 167,004
Prepaid expenses and other 17,045 11,021
----------- -----------
Total current assets 371,753 319,395
----------- -----------
PROPERTY AND EQUIPMENT (Note 3):
Buildings and improvements on leased land 4,616,051 4,562,418
Equipment 2,728,178 1,359,396
Leasehold improvements 310,000 310,000
Construction in process 213,899 301,876
----------- -----------
Total property and equipment 7,868,128 6,533,690
Less accumulated depreciation and amortization 2,879,362 2,589,192
----------- -----------
Property and equipment - net 4,988,766 3,944,498
----------- -----------
DEPOSITS 2,478 2,478
----------- -----------
TOTAL 5,362,997 4,266,371
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable:
Trade $ 128,027 $ 59,743
Construction 29,226 59,519
Accrued liabilities 79,347 44,350
Accrued liabilities (affiliate) (Note 4) 163,209
Advance deposits 159,791 139,935
Current portion of long-term debt (Note 5) 489,500
----------- -----------
Total current liabilities 1,049,100 303,547
DEFERRED INCOME TAXES (Note 2) 196,589 177,852
LONG-TERM DEBT (Note 5) 445,500
----------- -----------
Total liabilities 1,691,189 481,399
----------- -----------
COMMITMENTS AND CONTINGENCIES (Note 3)
SHAREHOLDERS' EQUITY:
Preferred stock, $5 par value - authorized, 100,000 shares; issued, none
Common stock, $.01 par value - authorized, 2,000,000 shares; issued, 718,373 shares 7,184 7,184
Additional paid-in capital 656,426 656,426
Retained earnings 3,086,110 3,198,874
Common stock in treasury - at cost, 23,796 shares and 23,696 shares
in 1997 and 1996, respectively (77,912) (77,512)
----------- -----------
Total shareholders' equity 3,671,808 3,784,972
----------- -----------
TOTAL $ 5,362,997 $ 4,266,371
=========== ===========
</TABLE>
See notes to consolidated financial statements.
-13-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
- ----------------------------------------------------------------------------------------------
<CAPTION>
1997 1996 1995
<S> <C> <C> <C>
REVENUES:
Sales of merchandise $ 1,874,158 $ 1,710,931 $ 1,687,416
Room, cabin and trailer space rentals 1,515,218 1,522,645 1,230,690
Snowmobile rentals 505,973 553,555 711,264
Interest 4,043 19,008 77,910
Other rentals and income 194,167 169,954 73,420
----------- ----------- -----------
Total revenues 4,093,559 3,976,093 3,780,700
----------- ----------- -----------
COSTS AND EXPENSES:
Cost of merchandise 1,147,788 960,687 984,311
Operating (Note 3) 2,179,595 1,787,110 1,394,901
Operating - affiliated (Note 4) 169,100 169,100 169,100
General and administrative 78,200 120,575 142,090
General and administrative - affiliated (Note 4) 412,286 436,384 316,231
Depreciation and amortization 291,329 232,050 79,542
----------- ----------- -----------
Total costs and expenses 4,278,298 3,705,906 3,086,175
----------- ----------- -----------
(LOSS) INCOME BEFORE INCOME TAXES (184,739) 270,187 694,525
(BENEFIT) PROVISION FOR INCOME TAXES
(Note 2) (71,975) 71,000 237,000
----------- ----------- -----------
NET (LOSS) INCOME $ (112,764) $ 199,187 $ 457,525
=========== =========== ===========
NET (LOSS) INCOME PER COMMON SHARE
(Note 1) $ (0.16) $ 0.29 $ .66
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
-14-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Common Stock Additional
---------------------- Paid-in Retained Treasury
Shares Amount Capital Earnings Stock
<S> <C> <C> <C> <C> <C>
BALANCE, APRIL 1, 1994 718,373 $ 7,184 $ 656,426 $2,542,162 $ (59,228)
Net income 457,525
------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1995 718,373 7,184 656,426 2,999,687 (59,228)
Purchases of common stock (18,284)
Net income 199,187
------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1996 718,373 7,184 656,426 3,198,874 (77,512)
Purchases of common stock (400)
Net loss (112,764)
------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1997 718,373 $ 7,184 $ 656,426 $3,086,110 $ (77,912)
------- ---------- ---------- ---------- ----------
</TABLE>
See notes to consolidated financial statements.
-15-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
1997 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (112,764) $ 199,187 $ 457,525
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization 291,329 232,050 79,542
Deferred income taxes 18,737 (3,000) (2,000)
Gain on sale of assets (120)
Changes in assets and liabilities:
Accounts receivable (26,195) 2,209 33,919
Accounts receivable (affiliate) (5,000) (1,787) 16,787
Merchandise inventories 48,586 (52,489) 23,439
Prepaid income taxes 23,335 (66,145) (15,147)
Prepaid expenses and other (6,024) (4,683) 185
Accounts payable 68,284 (181,375) 176,744
Accrued liabilities 198,206 (18,655) (17,016)
Income taxes (88,447) (38,811)
Advance deposits 19,856 33,415 50,629
----------- ----------- -----------
Net cash provided by operating activities 429,783 138,727 765,796
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,340,235) (885,049) (2,766,417)
Purchases of marketable investment securities (200,000)
Sale of marketable investment securities 300,000 1,344,848
Cash and accounts payable segregated for construction of
replacement property (30,293) (59,028) 1,333,547
Proceeds from sale of property and equipment 4,758
----------- ----------- -----------
Net cash used in investing activities (1,365,770) (644,077) (288,022)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock purchased for treasury (400) (18,284)
Proceeds from long-term debt 935,000
----------- ----------- -----------
Net cash provided by (used in) financing activities 934,600 (18,284)
----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (1,387) (523,634) 477,774
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 49,645 573,279 95,505
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR 48,258 49,645 573,279
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid for interest 14,594
===========
</TABLE>
See notes to consolidated financial statements.
-16-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
The Company operates in one business segment, the ownership and operation
of Flagg Ranch, a full-service resort motel and trailer park located in
the John D. Rockefeller Jr. Memorial Parkway, approximately four miles
north of Grand Teton National Park and two miles south of the southern
entrance to Yellowstone National Park.
Principles of Consolidation - The consolidated financial statements
include the accounts of International Leisure Hosts, Ltd. and Lewis &
Clark Lodge, its wholly-owned subsidiary (collectively, the "Company").
All intercompany transactions and accounts have been eliminated in
consolidation.
Significant accounting policies are as follows:
a. Merchandise inventories are stated at the lower of aggregate cost
(first-in, first-out basis) or market.
b. Property and equipment are stated at cost. Depreciation is computed
primarily by an accelerated method over the estimated useful lives,
which range from 5 years to 40 years, for such assets. Leasehold
improvements are amortized using the straight-line method over the
lesser of the estimated useful life of the related asset or the term
of the lease.
c. Income taxes have been accounted for in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 109, Accounting for
Income Taxes. Deferred income taxes have been provided for the
temporary differences between financial statement and income tax
reporting on certain transactions.
d. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles necessarily
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
e. Net (loss) income per common share is computed by dividing net
income by the weighted average number of common shares outstanding.
The weighted average number of common shares outstanding was
694,610, 697,510 and 698,498 shares for 1997, 1996 and 1995,
respectively.
f. Statements of Cash Flows - For purposes of the consolidated
statements of cash flows, cash and cash equivalents represent cash
in banks, money market funds, and certificates of deposit with
initial maturities of three months or less.
g. Estimated Fair Value of Financial Instruments - The Company has
estimated the fair value of its financial instruments using
available market data. However, considerable judgment is required in
interpreting market data to develop estimates of fair value. The use
of different market assumptions or methodologies may have a material
effect on the estimates of fair values. The carrying values of cash,
receivables, lines of credit, accounts payable, accrued expenses,
and long-term debt approximate fair values due to the short-term
maturities or market rates of interest.
-17-
<PAGE>
h. Reclassifications - Certain reclassifications have been made to the
1996 and 1995 financial statements to conform to the 1997
presentation.
2. INCOME TAXES
The (benefit) provision for federal income taxes for the years ended March
31 consists of the following:
1997 1996 1995
Current $ (53,238) $ 74,000 $ 239,000
Deferred (18,737) (3,000) (2,000)
--------- --------- ---------
Total $ (71,975) $ 71,000 $ 237,000
========= ========= =========
A reconciliation of the (benefit) provision for income taxes and the
amount that would be computed using statutory federal income tax rates on
income before income taxes for the years ended March 31 is set forth
below:
1997 1996 1995
Income taxes at federal rates $ (63,000) $ 92,000 $ 236,000
Tax-exempt income 0 (1,000) (6,000)
Other - net (8,975) (20,000) 7,000
--------- --------- ---------
(Benefit) provision for income taxes $ (71,975) $ 71,000 $ 237,000
========= ========= =========
Deferred income taxes result from temporary differences on the recognition
of certain revenue and expense items for tax and financial statement
purposes, principally the gain on settlement of involuntary conversion in
1982. This gain resulted in a deferred tax liability of $194,990. The
Company paid income taxes of approximately $50,000, $140,000 and $293,000
during the years ended March 31, 1997, 1996 and 1995, respectively.
3. COMMITMENTS AND CONTINGENCIES
The Company receives its operating authorization from the National Park
Service ("NPS"). The NPS Contract (the "Contract") which became effective
on January 1, 1990, will expire on December 31, 2009. Under the terms of
the Contract, prior to December 31, 1999, the Company is required to move
its existing 54-unit riverside motel from its current location to the high
ground above the river, to provide for new employee housing and make
certain other improvements. If the Company chooses to meet these
requirements by moving the riverside motel and converting it into employee
housing plus building additional employee housing and a new employee
dining facility, then the cost is estimated to be between $2,400,000 and
$2,800,000 depending on the number of employee housing units and the
extent of additional improvements required by the NPS. If the Company
builds new lodging units to replace the 54-unit riverside motel, the
additional cost to build these units will be between $1,000,000 and
$1,200,000. This would result in a total cost of relocation and new
construction combined of between $3,400,000 and $4,000,000.
The fee expense to the NPS under the Contract is calculated at 2% of gross
receipts (as defined), subject to review and possible adjustment every
five years. For the years ended March 31, 1997, 1996 and 1995, this fee
amounted to $80,004, $76,260 and $70,607, respectively.
-18-
<PAGE>
Flagg Ranch faces competition from hotels, camping areas and trailer
facilities in Yellowstone and Grand Teton National Parks, as well as from
a large number of hotels and motels in Wyoming, Montana and Idaho,
offering some facilities which are similar to those offered by Flagg
Ranch. In addition, the business of Flagg Ranch is susceptible to weather
conditions and unfavorable trends in the economy as a whole. Business
could be significantly affected depending upon actions which might be
taken by the NPS if cutbacks are made to their budget. If the NPS decides
to close Yellowstone National Park for the winter months, then Flagg Ranch
would have to discontinue its winter operations. NPS budget cutbacks could
also negatively impact the length of the summer season and the number of
visitors to the Parks and have a corresponding negative impact on Flagg
Ranch revenues.
On May 20, 1997, the Fund for Animals, Biodiversity Legal Foundation et.
al. filed a lawsuit against the NPS challenging the action of the NPS
regarding winter use of Yellowstone and Grand Teton National Parks. The
plaintiffs have asked the Federal Court to stop winter activities,
primarily snowmobiling and related snow grooming, until environmental
impacts are documented. If the Federal Court were to suspend or terminate
winter activities in Yellowstone National Park, then Flagg Ranch would
have to suspend or discontinue its winter operations.
4. TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTIES
General and administrative expenses - affiliated for the years ended March
31, 1997, 1996 and 1995 represent management fees and administrative
expenses paid to affiliated companies. All affiliated companies referred
to in these financial statements are owned by family members of Elizabeth
A. Nicoli who are the majority owners of the Company.
The Company leases snowmobiles under short-term leases from an affiliated
company. For each of the years ended March 31, 1997, 1996 and 1995,
snowmobile lease expense totaled $169,100. As of March 31, 1997, the
Company owes the affiliated company $163,209 relating to this lease.
5. LONG-TERM DEBT
Long-term debt as of March 31, 1997 consists of the following:
<TABLE>
<S> <C>
Bank credit facility which provides maximum borrowings of $500,000, draw period
extended from September 30, 1996 to September 30, 1997, monthly interest
payments at prime plus .5% (9% at March 31, 1997), principal payments begin
October 30, 1997 in 60 equal monthly installments, maturity date of September
30, 2002, collateralized by all accounts, an assignment of
contract and all improvements made to Flagg Ranch property $495,000
Additional bank credit facility which provides maximum borrowings of $500,000,
due September 30, 1997, monthly interest payments at prime plus .5% (9% at
March 31, 1997), collateralized by all accounts, an assignment of the contract
and all improvements made to Flagg Ranch property 440,000
--------
Total 935,000
Less current portion 489,500
--------
Long-term debt - net $445,500
========
</TABLE>
-19-
<PAGE>
Annual maturities of long-term debt as of March 31 are as follows:
1998 $489,500
1999 99,000
2000 99,000
2001 99,000
2002 99,000
Thereafter 49,500
--------
Total $935,000
========
Both credit agreements covering the LOC's with the bank contain certain
covenants. The agreement requires the Company to maintain certain
financial ratios and, among other things, places limitations on the
Company's ability to make loans. As of March 31, 1997, the Company was in
compliance with all covenants.
* * * * * *
-20-
<PAGE>
Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosures
None
PART III
--------
Item 9. Directors and Executive Officers of the Registrant
NAME AGE POSITIONS WITH COMPANY
--------- --- ----------------------
Elizabeth A. Nicoli 67 Chairman/President/Director
George B. Toney 70 Director
A. Clarene Law 63 Director
F. Ray Evarts 71 Director/Assistant Secretary
Mark G. Sauder 37 Secretary/Treasurer/CFO
Mrs. Elizabeth A. Nicoli was elected to the Board of Directors in October,
1975, and has been associated with the Company in various capacities. Upon the
death of Mr. Nicoli, the former Chairman, Treasurer, President and CEO of the
Company, on October 22, 1996, she was elected as President and Chairman.
George B. Toney was elected to the Board of Directors on September 11,
1992. He was President of TW Recreational Services, Inc. ("TW") from 1982 to
1988. Mr. Toney retired from TW in 1988, after 24 years with the company.
A. Clarene Law was elected to the Board of Directors on September 11, 1992.
She is the owner and Chief Executive Officer of Elk Country Motels which
operates four motel properties aggregating 270 rooms in Jackson, Wyoming. Mrs.
Law has over 34 years experience in the hospitality industry.
F. Ray Evarts was elected to the Board of Directors on September 11, 1992.
He was elected Assistant Secretary of the Company on June 6, 1994. He is
currently self-employed as a real estate consultant in Arizona and California,
for planning, developing and leasing of commercial and multi-family properties
as well as consulting in all phases of the restaurant business. From 1982 to
1992 he was Project Manager for Warren Properties, Inc., a California based,
privately held hotel and apartment developer and owner with properties in 18
states.
Mark G. Sauder, CPA, was elected as Chief Financial Officer of the Company
on June 6, 1994. On October 23, 1996 he was elected as Treasurer and Secretary
of the Company. For the past 7 years Mr. Sauder acted as Chief Financial Officer
for Nicoli Enterprises. Mr. Sauder's experience also includes serving as the
Chief Financial Officer for a commercial general contractor, the Chief
Accounting Officer for a real estate developer and Senior Auditor for a public
accounting firm.
21
<PAGE>
Item 10. Executive Compensation
SUMMARY COMPENSATION TABLE
--------------------------
(a) (b) (c)
- ----------------------------- ------------- ----------------
Name and principal
Position Year Salary
Elizabeth A. Nicoli 1997 ---
President and Chairman* 1996 ---
1995 ---
Anthony J. Nicoli 1997 ---
CEO, Chairman, President 1996 ---
and Treasurer** 1995 ---
John L. Bradley 1997 $ 75,464
President*** 1996 $156,380
1995 $111,725
All executive officers
as a group (three) 1997 $188,904
(three) 1996 $194,630
(three) 1995 $152,366
All executive officers as a group received cash compensation for services
rendered to the Company over the three years, a portion of which was paid
pursuant to the management contracts described under the heading "Item 12
Certain Relationships and Related Transactions."
There are no compensation arrangements for directors.
* Elizabeth A. Nicoli became President and Chairman of the Company on October
23, 1996.
** Anthony J. Nicoli served as Chairman, Treasurer, President and CEO until
his death on October 22, 1996.
*** John Bradley served as President until the termination of his employment
with the Company on July 31, 1996, at which time Anthony J. Nicoli became
President.
22
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table indicates as of June 11, 1997, the common stock of the
Registrant owned beneficially by each director, by all directors and executive
officers as a group and by each person who is known by the Registrant to own
beneficially more than 5% of the outstanding common stock.
Name and Address Common Stock Percent Held
---------------- ------------ ------------
Elizabeth A. Nicoli 203,076 (A)(F) 29.2%
Director, Chairman, President
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
George B. Toney 5,000 *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
A. Clarene Law 3,000 *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
F. Ray Evarts 100 *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
William Levine, as 471,669 (B)(C)(F) 67.9%
Co-Trustee for the Nicoli Children's
Trusts, Grandchildren's Trusts
and the A.J.Nicoli Trust
1702 E. Highland Ave., #312
Phoenix, AZ 85016
Mark G. Sauder 471,669 (B)(C)(F) 67.9%
Secretary, Treasurer, CFO, as
Co-Trustee for the Nicoli Children's
Trusts, Grandchildren's Trusts
and the A.J.Nicoli Trust
1702 E. Highland Ave., #312
Phoenix, AZ 85016
23
<PAGE>
Name and Address Common Stock Percent Held
---------------- ------------ ------------
Krist A. Jake 73,800 (D) 10.6%
P.O. Box 640219
San Francisco, CA 94164
Bar-B-Bar Corporation 37,307 (E) 5.4%
Max C. Chapman, Jr.
P.O. Box 194
Scarborough, New York 10510
All Executive Officers and
Directors as a group
(5 persons)
*Less than 1%
(A) Elizabeth A. Nicoli is trustee of the 1978 Nicoli Children's Trust which
holds 105,042 shares of the Common Stock and trustee of the A.J. Nicoli
Charitable Foundation which holds 93,034 shares of the Common Stock. All of
the shares for the 1978 Nicoli Children's Trust and the A.J. Nicoli
Charitable Foundation are included in the holdings shown for Elizabeth A.
Nicoli. Mrs. Nicoli disclaims beneficial ownership of these shares. Mrs.
Nicoli, William Levine and Mark Sauder are co-trustees of the Anthony J.
Nicoli Trust which holds 5,000 shares of the Common Stock. The 105,042
shares held by the 1978 Nicoli Children's Trust and the 93,034 shares held
by the A. J. Nicoli Charitable Foundation are subject to a proxy agreement
signed February 1, 1995 under which William Levine and Mark Sauder are
co-proxies, and accordingly such shares are also listed as beneficially
owned by Mr. Levine and Mr. Sauder.
(B) William Levine and Mark Sauder are co-trustees of the 1974 Nicoli
Children's Trust which holds 117,064 shares of the Common Stock and the
Nicoli Grandchildren's Trusts which hold 151,529 shares of the Common
Stock. Mr. Levine and Mr. Sauder are co-trustees, along with Elizabeth A.
Nicoli, of the Anthony J. Nicoli Trust which holds 5,000 shares of the
Common Stock. Mr. Levine and Mr. Sauder disclaim beneficial ownership of
these shares. In addition, this includes 198,076 shares as to which Mr.
Levine and Mr. Sauder are co-proxies pursuant to the proxy agreement dated
February 1, 1995.
(C) Elizabeth A. Nicoli disclaims beneficial ownership of these shares.
(D) Based on Schedule 13D filed with the Securities and Exchange Commission on
June 7, 1997 by Krist A. Jake.
(E) Based upon Schedule 13D filed with the Securities and Exchange Commission
on December 6, 1991 by Bar-B-Bar Corporation and Max C. Chapman, Jr.
24
<PAGE>
(F) The indicated shareholders are parties to a Shareholders' Agreement dated
September 20, 1991 which imposes certain restrictions on transfers of the
Common Stock and grants the parties rights to acquire shares held by other
parties seeking to transfer stock and in certain other circumstances as
described in the Agreement.
Item 12. Certain Relationships and Related Transactions
General and administrative expenses - affiliated for the years ended March
31, 1997, 1996, and 1995, represent management fees and administrative expenses
paid to affiliated companies. All affiliated companies referred to in this Item
12 are owned by family members of Elizabeth A. Nicoli, who are the majority
owners of the Company.
The Company leases snowmobiles under short-term leases from an affiliated
company. For each of the years ended March 31, 1997, 1996 and 1995, snowmobile
lease expense totaled $169,000. As of March 31, 1997, the Company owes the
affiliated company $163,000 related to this lease.
25
<PAGE>
PART IV
-------
Item 13. Exhibits, Financial Statements, Schedules and Reports on
Form 8-K
(a) 1. Financial Statements Page
----
The following consolidated financial statements
of International Leisure Hosts, Ltd. and Subsidiary
are included in Part II, Item 7:
Independent Auditors' Report . . . . . . . . . . . . 12
Consolidated Balance Sheets - March 31, 1997
and 1996 . . . . . . . . . . . . . . . . . . . . . . 13
Consolidated Statements of Income - years ended
March 31, 1997, 1996 and 1995 . . . . . . . . . . . . 14
Consolidated Statements of Shareholders' Equity -
years ended March 31, 1997, 1996 and 1995 . . . . . . 15
Consolidated Statements of Cash Flows-
years ended March 31, 1997, 1996 and 1995 . . . . . . 16
Notes to consolidated financial statements . . . . . 17
3. The following exhibits are incorporated by reference as indicated:
3.1 By-Laws-Adopted June 22, 1992
Filed with Form 10-K dated March 31, 1992
3.2 Articles of Incorporation-filed with Form 10-K dated March 31,
1986, pages 32-41
10.1 United States Department of the Interior National Park Service
Contract-filed with Form 10-Q dated December 31, 1989
10.2 Pacific West Construction Contract for new lodge building filed
with Form 10-KSB dated March 31, 1994
10.3 Pacific West Construction Contract for 50 new lodging units filed
with Form 10-QSB dated June 30, 1994
10.4 Pacific West Construction contract for 42 new lodging units filed
with Form 10-QSB dated September 30, 1995
22. Subsidiaries of Registrant: incorporated by reference from the
Registrant's report on Form 10-KSB dated March 31, 1994
26
<PAGE>
(b) Form 8-K filed on November 5, 1996.
All other schedules and exhibits for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and, therefore, have been
omitted.
27
<PAGE>
SIGNATURES
- ----------
Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
International Leisure Hosts, Ltd.
---------------------------------
/s/ Elizabeth A. Nicoli
------------------------------------------
Elizabeth A. Nicoli
Chairman of the Board and President
Date: 6/30/97
--------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
/s/ Elizabeth A. Nicoli /s/ Mark G. Sauder
- ----------------------------------- --------------------------------------
Elizabeth A. Nicoli Mark G. Sauder
Chairman of the Board and President Chief Financial Officer/Secretary/
Treasurer
Date: 6/30/97 Date: 6/30/97
------------------------------- ---------------------------------
/s/ F. Ray Everts /s/ Daniel J. Ryan
- ----------------------------------- --------------------------------------
F. Ray Evarts, Director Daniel J. Ryan, Chief Accountant
Date: 6/30/97 Date: 6/30/97
------------------------------- ---------------------------------
29
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 48,258
<SECURITIES> 0
<RECEIVABLES> 188,032
<ALLOWANCES> 0
<INVENTORY> 118,418
<CURRENT-ASSETS> 371,753
<PP&E> 7,868,128
<DEPRECIATION> 2,879,362
<TOTAL-ASSETS> 5,362,997
<CURRENT-LIABILITIES> 1,049,100
<BONDS> 0
0
0
<COMMON> 7,184
<OTHER-SE> 3,664,624
<TOTAL-LIABILITY-AND-EQUITY> 5,362,997
<SALES> 1,874,158
<TOTAL-REVENUES> 4,093,559
<CGS> 1,147,788
<TOTAL-COSTS> 4,278,298
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (184,739)
<INCOME-TAX> (71,975)
<INCOME-CONTINUING> (112,764)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (112,764)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
