UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street
Washington, D.C. 20549
Form 10-KSB
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ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 1998
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Commission File No. 0-3858
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INTERNATIONAL LEISURE HOSTS, LTD.
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(Exact name of Registrant as specified in its charter)
Wyoming 86-0224163
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3207 S. Hardy Drive., Tempe, AZ 85282
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(Address of principal executive office) (Zip Code)
Issuer's telephone number, including area code (602) 829-7600
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1702 East Highland Avenue, Suite 312, Phoenix, Arizona 85016 (Former address)
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)
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Check whether the issuer (1) filed all reports required to be filed 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:
YES X NO
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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. $4,630,786
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As of June 4, 1998, 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 $2,023,000.
2
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PART I
Page
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Item 1. Business 4
Item 2. Properties 6
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of 7
Security Holders
PART II
Item 5. Market for the Registrant's Common 8
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 13
Item 8. Changes in and Disagreements with 23
Accountants on Accounting and Financial
Disclosure
PART III
Item 9. Directors and Executive Officers of the 24
Registrant
Item 10. Executive Compensation 25
Item 11. Security Ownership of Certain 26
Beneficial Owners and Management
Item 12. Certain Relationships and Related Transactions 27
PART IV
Item 13. Exhibits (including Exhibit Index), 28
Financial Statements, Schedules and
Reports on Form 8-K
3
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PART I
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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. 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. The 42 cabins will replace the Company's 54-unit motel
which was used for visitors through the summer of 1998 and then converted to
employee housing. The new maintenance and laundry facilities were completed by
August 31, 1997.
During fiscal year 1998, Flagg provided overnight accommodations to
national park visitors for up to 536 persons per night via its 54-unit motel and
92 cabins. 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
4
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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 73% and 74% respectively of Flagg's fiscal 1998 and 1997 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, management believes that 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.
The winter season, which runs from mid-December through mid-March
accounted for 27% of Flagg's fiscal 1998 and 1997 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.
Management believes that 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 1998, 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 payable to the NPS under the Contract is subject to review and
adjustment every five years. For fiscal 1998, the fee was calculated at 2% of
the Company's 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.
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Business could be significantly affected negatively 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.
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. A settlement agreement was reached that requires the NPS to prepare
an environmental impact statement ("EIS") over the next three years, during
which time period the parks will continue activities under the existing winter
visitor-use plan. If the NPS is required to suspend or terminate winter
activities in Yellowstone National Park, Flagg Ranch would have to suspend or
discontinue its winter operations.
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 the 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 1997 the Company incurred costs of approximately
$1,200,000 to substantially complete construction of the 42 new cabins as well
as other related improvements. During fiscal year 1998 the Company incurred
costs of approximately $216,000 related to the above construction projects. With
the completion of the 42 new cabin units in December 1996, the Company had a
total of 146 lodging units consisting of 92 cabin units and a 54-unit riverside
motel complex available during the majority of fiscal year 1998. The 54-unit
riverside motel, which was converted to employee housing in December 1997, is no
longer available for guest lodging and the number of lodging units available for
rent is now 92.
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Under the terms of the Contract, the Company is required to move the
existing 54-unit riverside motel, which has been converted to employee housing,
from its current location to the high ground above the river and make other
improvements prior to December 31, 1999. The cost is estimated to be between
$1,200,000 and $2,100,000 depending on the extent of additional improvements
required by the NPS. If the Company elects to build new lodging units to replace
the converted 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 $2,200,000 and $3,300,000.
During fiscal year 1997, the Company commenced construction of new
laundry and maintenance facilities, which were completed by August 31, 1997 for
a cost of $180,000.
On a temporary basis, during the summer of 1997, twenty-five
recreational vehicle sites and one tent site were not available for rental to
the public. These sites were utilized by construction workers during the
construction period and by employees until the new employee recreational vehicle
sites were completed. This reduced the campground facility from 97 to 72
recreational vehicle sites and from 74 to 73 tent sites, and thus negatively
impacted 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
7
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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 on the OTC
bulletin board, 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 1997 and 1998.
Bid
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High Low
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Quarter Ended
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June 30, 1996 5 3/8 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
June 30, 1997 6 1/8 5 1/4
September 30, 1997 7 5 1/2
December 31, 1997 7 1/4 6 3/8
March 31, 1998 6 3/4 5 3/4
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, 1998 there were 694,577 shares of outstanding
common stock and an estimated 900 shareholders of record.
The level of trading during fiscal year 1998 was approximately 3,250
shares the first quarter, no shares the second quarter, 12,450 shares the third
quarter, and 2,400 shares the fourth quarter ending March 31, 1998. In addition,
120,000 shares of restricted stock was traded in a private transaction during
the fourth quarter. 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.
Selected Financial Data
The selected financial data for each of the five years in the period
ended March 31, 1998 have been derived from the Company's audited financial
statements, and should be read in conjunction
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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)
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1998 1997 1996 1995 1994
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Total Revenues $ 4,631 $ 4,094 $ 3,976 $ 3,781 $ 3,694
Net Income (Loss) 156 (113) 199 458 536
Net Income (Loss) Per Share- .23 (.16) .29 .66 .77
Basic
Total Assets 5,393 5,363 4,266 4,431 3,568
Long-Term Obligations 0 446 0 0 0
Shareholders' Equity 3,828 3,672 3,785 3,604 3,147
Book Value Per Share 5.51 5.29 5.45 5.16 4.50
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company's net income was $156,000, $.23 per share for the year
ended March 31, 1998. This compares to a net loss of $113,000, ($.16) per share,
in 1997 and net income of $199,000, $.29 per share, in 1996. The primary factors
contributing to the $269,000 increase in 1998 net income were the relatively
mild winter weather conditions in 1998 compared to 1997 which resulted in fewer
airport, road and national park closures plus the increased costs associated
with the construction and initial start up of the 42 new cabin units in 1997
were not duplicated in 1998. Changes in the Company's revenues and expenses for
the fiscal years 1998 and 1997 are summarized below. All references to years
represent fiscal years ended March 31.
Total revenues for 1998 increased by $538,000 or 13% over 1997. Of this
increase, $295,000 was from lodging, $74,000 from food service, $58,000 from
float trip revenue, $25,000 from trail ride revenue, $165,000 from snowmobile
revenue, $38,000 from snowcoach revenue and $2,000 from transportation revenue.
Decreases of $52,000 in gift shop sales, $35,000 in grocery store sales, $1,000
in interest income, $17,000 in gasoline sales and $15,000 in miscellaneous
revenue partially offset the above increases. The increase in lodging revenue is
mainly attributable to the increase in total number of rental units available
during the summer season from 104 in fiscal 1997 to 146 in
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fiscal 1998. The increased number of guests contributed to the increases in food
service, trail ride and float trip revenue. Decreases in gift shop and grocery
store revenue is mainly attributable to a higher than normal employee turnover
in those areas which resulted in less continuity of operations, less attention
to the merchandise mix and a resulting decrease in sales.
The 1998 winter season was longer than the 1997 winter season due to
mild weather which resulted in fewer road, airport and park closures. The 1998
winter season consisted of 81 days compared to 67 days in 1997. The number of
winter visitors through the south entrance of Yellowstone increased 46% in 1998
compared to 1997. As a result, the number of snowmobile rentals increased from
3,995 in 1997 to 4,622 in 1998.
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.
Costs and Expenses
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The ratio of cost of merchandise sold to sales of merchandise was 59%
in 1998, 61% in 1997, and 56% in 1996. Ending merchandise inventories decreased
from $118,000 at March 31, 1997 to $50,000 at March 31, 1998 primarily due to
the sale of old and discontinued gift shop merchandise which was not replaced
prior to the end of the fiscal year.
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Operating expenses increased by $266,000 or 11% in 1998 as compared to
1997. In addition, the ratio of operating costs to operating revenues decreased
to 56% in 1998 from 57% in 1997. The major increases consisted of $257,000 in
labor, $92,000 in interest, $69,000 in outside services, and $20,000 in credit
card/collection fees. These increases were offset in part by the elimination of
snowmobile rental expense of $169,000 (which was partially offset by
depreciation of snowmobiles of $31,000 and loss on sale of snowmobiles of
$94,000) and minor decreases in other expenses. The labor increase was mainly
the result of increased managerial costs due to guaranteed bonus payments and
severance agreements. The increase in interest expense was due to higher
outstanding loan balances during the year due to working capital requirements.
The increase in outside services costs were due to increased revenue in both the
float and horse activities which resulted in higher payments due per lease
agreements with the operators. The higher credit card/collection fees were a
result of higher gross revenues and corresponding increases in the use of credit
cards. Snowmobile rental expense was eliminated this year with the Company's
decision to purchase the snowmobiles.
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 during the winter of 1996, were opened for the 1997 winter season and
used as extra employee housing.
General and administrative expenses decreased by $230,000 or 47% in
1998 as compared to 1997. The decrease consisted primarily of reductions in
telephone expense of $10,000 and management fees of $253,000 which was a result
of a change in management philosophy and structure. These reductions were offset
by increases in professional fees of $33,000.
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.
During 1998 the Company had a loss on asset disposals of $94,000 partly
resulting from the sale to a related party of the snowmobiles used in the winter
operation. Previously the Company had rented snowmobiles from a related party
and had included the rental cost in operating expenses.
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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 fiscal 1998 the Company incurred costs of approximately $216,000
related to the completion of certain construction projects. As a result, working
capital decreased to a negative $945,000 at March 31, 1998 from a negative
$677,000 at March 31, 1997. The Company may incur additional costs of between
$1,200,000 and $2,100,000 prior to December 31, 1999 to relocate employee
housing units as 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 $432,000, $430,000, and $139,000 for
the fiscal years ended 1998, 1997 and 1996, respectively. The construction funds
will have to be obtained from outside sources to the extent they exceed cash
generated from operations. There is no guarantee that the Company will be able
to procure financing on favorable terms.
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Item 7. Financial Statements and Supplemental Data
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
International Leisure Hosts, Ltd.
Tempe, Arizona
We have audited the accompanying consolidated balance sheets of International
Leisure Hosts, Ltd. (the "Company") as of March 31, 1998 and 1997, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the three years in the period ended March 31, 1998. 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, 1998 and
1997, and the results of its operations and its cash flows for each of the three
years in the period ended March 31, 1998 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
June 8, 1998
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INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
1998 1997
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<S> <C> <C>
ASSETS (Note 5)
CURRENT ASSETS:
Cash & cash equivalents $ 212,593 $ 48,258
Accounts receivable 23,300 31,828
Accounts receivable - from related party (Note 4) 82,800 9,800
Income tax refund receivable 23,471 6,726
Merchandise inventories 50,394 118,418
Prepaid expenses and other 10,491 17,045
Deferred income taxes (Note 2) 19,603 79,140
----------- -----------
Total current assets 422,652 371,753
----------- -----------
PROPERTY AND EQUIPMENT (Note 3):
Buildings and improvements 5,017,059 4,616,051
Equipment 1,421,234 2,728,178
Leasehold improvements 325,600 310,000
Construction in progress 48,145 213,899
----------- -----------
Total property and equipment 6,812,038 7,868,128
Less accumulated depreciation and amortization 1,845,325 2,879,362
----------- -----------
Property and equipment - net 4,966,713 4,988,766
----------- -----------
DEPOSITS 3,402 2,478
----------- -----------
TOTAL $ 5,392,767 $ 5,362,997
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $ 70,570 $ 128,027
Related party (Note 4) 17,929
Construction 29,226
Note payable under line of credit (Note 5) 1,105,000
Accrued liabilities 61,323 79,347
Accrued liabilities - to related party (Note 4) 163,209
Advance deposits 113,093 159,791
Current portion of long-term debt (Note 5) 489,500
----------- -----------
Total current liabilities 1,367,915 1,049,100
DEFERRED INCOME TAXES (Note 2) 196,589 196,589
LONG-TERM DEBT (Note 5) 445,500
----------- -----------
Total liabilities 1,564,504 1,691,189
----------- -----------
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 3,242,565 3,086,110
Common stock in treasury - at cost, 23,796 shares (77,912) (77,912)
----------- -----------
Total shareholders' equity 3,828,263 3,671,808
----------- -----------
TOTAL $ 5,392,767 $ 5,362,997
=========== ===========
</TABLE>
See notes to consolidated financial statements
14
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INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
REVENUES:
Sales of merchandise $ 1,821,890 $ 1,874,158 $ 1,710,931
Room, cabin and trailer space rentals 1,810,328 1,515,218 1,522,645
Snowmobile rentals 670,537 505,973 553,555
Interest 3,511 4,043 19,008
Other rentals and income 324,520 194,167 169,954
----------- ----------- -----------
Total revenues 4,630,786 4,093,559 3,976,093
----------- ----------- -----------
COSTS AND EXPENSES:
Cost of merchandise 1,080,088 1,147,788 960,687
Operating (Note 3) 2,615,190 2,179,595 1,787,110
Operating - related party (Note 4) 169,100 169,100
General and administrative 100,816 78,200 120,575
General and administrative - related party (Note 4) 159,464 412,286 436,384
Loss on asset disposals (Note 4) 94,387
Depreciation and amortization 364,848 291,329 232,050
----------- ----------- -----------
Total costs and expenses 4,414,793 4,278,298 3,705,906
----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 215,993 (184,739) 270,187
PROVISION (BENEFIT) FOR INCOME TAXES 59,538 (71,975) 71,000
(Note 2)
NET INCOME (LOSS) $ 156,455 ($ 112,764) $ 199,187
=========== =========== ===========
NET INCOME (LOSS) PER COMMON SHARE-
BASIC (Note 1) $ 0.23 ($ 0.16) $ 0.29
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements
15
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Common Stock Additional
--------------------------- Paid-in Retained Treasury
Shares Amount Capital Earnings Stock
<S> <C> <C> <C> <C> <C>
BALANCE, APRIL 1, 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)
Purchases of common stock
Net income 156,455
---------- ---------- ---------- ---------- ----------
BALANCE, MARCH 31, 1998 718,373 $ 7,184 $ 656,426 $3,242,565 ($ 77,912)
========== ========== ========== ========== ==========
</TABLE>
See notes to consolidated financial statements
16
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 156,455 ($ 112,764) $ 199,187
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 364,848 291,329 232,050
Deferred income taxes 18,737 (3,000)
Loss (gain) on sale of assets 94,387 (120)
Changes in assets and liabilities:
Accounts receivable 8,528 (26,195) 2,209
Accounts receivable - from related party (73,000) (5,000) (1,787)
Merchandise inventories 68,024 48,586 (52,489)
Income tax refund receivable 43,793 14,028 (66,145)
Deferred tax asset 59,538 (79,140)
Prepaid expenses and other 6,554 (6,024) (4,683)
Deposits (925)
Accounts payable - trade (57,457) 68,284 (181,375)
Accounts payable - related party 17,929
Accounts payable - construction (29,226)
Accrued liabilities (18,024) 198,206 (18,655)
Accrued liabilities - to related party (163,209)
Advance deposits (46,698) 19,856 33,415
----------- ----------- -----------
Net cash provided by operating activities 431,517 429,783 138,727
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (652,117) (1,340,235) (885,049)
Sale of marketable investment securities 300,000
Cash and accounts payable segregated for construction of (30,293) (59,028)
replacement property
Proceeds from sale of property and equipment 214,935 4,758
----------- ----------- -----------
Net cash used in investing activities (437,182) (1,365,770) (644,077)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock purchased for treasury (400) (18,284)
Proceeds from long-term debt 60,000 935,000
Proceeds from line of credit 1,105,000
Payments on long-term debt (995,000)
----------- ----------- -----------
Net cash provided by (used in) financing activities 170,000 934,600 (18,284)
</TABLE>
(Continued)
17
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1998, 1997, AND 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH AND 164,335 (1,387) (523,634)
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 48,258 49,645 573,279
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 212,593 $ 48,258 $ 49,645
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid for interest $ 96,284 $ 14,594
=========== ===========
</TABLE>
(Concluded)
See notes to consolidated financial statements
18
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
International Leisure Hosts, Ltd. (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.
As of March 31, 1997 and 1996, the financial statements include the
accounts of International Leisure Hosts, Ltd. and Lewis & Clark Lodge,
its wholly-owned subsidiary. All intercompany transactions and accounts
were eliminated in consolidation.
During 1998, a majority of outstanding shares of the Company was
purchased by an unrelated third party. Subsequent to the purchase,
Lewis & Clark Lodge was dissolved and its assets and liabilities were
transferred to the Company at their historical cost basis.
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.
19
<PAGE>
e. Net income (loss) per common share - In 1998, the company
adopted and retroactively applied SFAS No. 128, Earnings per
Share, which had no effect on the computation or presentation
of earnings per share data. Net income (loss) 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 694,577, 694,610 and
697,510 shares for 1998, 1997 and 1996, 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.
h. New Accounting Pronouncements - In June 1997, the FASB issued
SFAS No. 130, Reporting Comprehensive Income, which is
effective for financial statements for fiscal years beginning
after December 15, 1997 and established standards for
reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full
set of general-purpose financial statements. The Company does
not believe the adoption of SFAS No. 130 will have a material
impact on its financial statement presentation or related
disclosures.
In June 1997, the FASB issued SFAS No. 131, Disclosure about
Segments of an Enterprise and Related Information, which is
effective for fiscal years beginning after December 15, 1997
and establishes standards for the way that public business
enterprises report information about operating segments in
annual financial statements and requires that those
enterprises report selected information about operating
segments in interim financial reports issued to shareholders.
It also establishes standards for related disclosures about
products and services, geographic areas and major customers.
The Company operates in one business segment and does not
believe that the adoption of SFAS No. 131 will have a material
impact on its financial statements or related disclosures.
i. Reclassifications - Certain reclassifications have been made
to the 1997 and 1996 financial statements to conform to the
1998 presentation.
20
<PAGE>
2. INCOME TAXES
The provision (benefit) for federal income taxes for the years ended
March 31 consists of the following:
1998 1997 1996
Current $ 59,538 ($53,238) $ 74,000
Deferred (18,737) (3,000)
-------- -------- --------
Total $ 59,538 ($71,975) $ 71,000
======== ======== ========
A reconciliation of the provision (benefit) 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:
1998 1997 1996
Income taxes at federal rates $ 73,500 ($63,000) $ 92,000
Tax-exempt income (1,000)
Other - net (13,962) (8,975) (20,000)
-------- -------- --------
Provision (benefit) for income taxes $ 59,538 ($71,975) $ 71,000
======== ======== ========
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, which resulted from fire damage, which resulted in
a deferred tax liability of $194,990. The recognized deferred tax asset
is based upon expected utilization of net operating loss carryforwards,
which expire in varying amounts beginning 1998 through 2012 for federal
income tax purposes. The Company paid income taxes of approximately
$18,250, $50,000 and $140,000 during the years ended March 31, 1998,
1997 and 1996, 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. The Company has
chosen to meet these requirements by moving the riverside
21
<PAGE>
motel and converting it into employee housing, plus building additional
employee support facilities, which is scheduled to begin in summer 1998
with expected completion in summer 1999. The cost to do this is
estimated to be between $1,200,000 and $2,100,000 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 $2,200,000 and $3,300,000. The Company has not made a decision
at this time regarding replacing the riverside motel with new lodging
units.
The fee expense, which has been recorded as operating 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, 1998, 1997 and 1996, this fee amounted to
$88,374, $76,041 and $73,543, respectively.
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. A settlement agreement was reached that
requires the NPS to prepare an environmental impact statement ("EIS")
over the next three years, during which time period the parks will
continue activities under the existing winter visitor-use plan. If the
NPS is required to suspend or terminate winter activities in
Yellowstone National Park, Flagg Ranch would have to suspend or
discontinue its winter operations.
4. TRANSACTIONS WITH RELATED PARTIES
General and administrative - related party expenses for the years ended
March 31, 1998, 1997 and 1996 represent management fees and
administrative expenses paid to related parties and totaled
approximately $160,000, $412,000 and $436,000, respectively. All
related parties referred to in these financial statements were owned by
family members of Elizabeth A. Nicoli who were the majority owners of
the Company for the years ended March 31, 1997 and 1996.
22
<PAGE>
Related parties during the year ended March 31, 1998 are owned by the
Company's majority owner, Robert Walker, or family members.
Operating - related party expenses represent leased snowmobiles under
short-term leases from a related party. As of March 31, 1997 and 1996,
snowmobile lease expense totaled $169,100.
During October 1997, the Company incurred borrowings under a line of
credit from a related party. For the year ended March 31, 1998,
outstanding borrowings totaled $1,105,000 (Note 5).
In March 1998, the Company sold 96 snowmobiles for total proceeds of
$144,000 and a loss of $94,387. A related party of the Company
purchased 46 snowmobiles for a total of $82,800, of which all was
recorded as a receivable at March 31, 1998.
At March 31, 1998, the Company recorded a payable of $17,929 to a
related party for certain operating expenses paid by the related party
on behalf of the Company. At March 31, 1997, the Company recorded a
liability of $163,209 to a related party related to leases of
snowmobiles.
5. NOTE PAYABLE UNDER LINE OF CREDIT
During October 1997, the Company entered into a line of credit
agreement ("Agreement") with an affiliated company expiring September
30, 1998, which provides for secured borrowings of up to $1,200,000 at
an interest rate of prime plus .5 percent. Borrowings under the
Agreement are collateralized by the assets and improvements of Flagg
Ranch. The Company has borrowed $1,105,000 on this line of credit as of
March 31, 1998. The terms of the Agreement contain, among other
provisions, requirements for maintaining minimum cash flows (as defined
in the Agreement) and places limitations on the Company's ability to
make loans. As of March 31, 1998, the Company was not in compliance
with the minimum cash flow requirement. On June 8, 1998, the Company
received a waiver of noncompliance for the year ended March 31, 1998.
The Company used, in part, the proceeds from the drawdown on the
Agreement to refinance the bank debt which totaled $935,000 at March
31, 1997.
Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosures
None
23
<PAGE>
PART III
--------
Item 9. Directors and Executive Officers of the Registrant
NAME AGE POSITIONS WITH COMPANY TERM AS
DIRECTOR
Elizabeth A. Nicoli 68 Chairman/Director 10/75 - Present
Robert L. Walker 64 President/Director 12/97 - Present
A. Clarene Law 64 Director 6/92 - Present
F. Ray Evarts 72 Director/Secretary 9/22 - Present
Michael P. Perikly 46 Director/Treasurer/CFO 12/97 - Present
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,
served as President until September 29, 1997 and continues to serve as Chairman.
Robert L. Walker was elected as President on September 30, 1997 and was
elected to the Board of Directors in December, 1997. Mr. Walker has been an
executive with numerous companies over the last 35 years. From 1976 to the
present, he has been President of PNI, Inc., a privately owned investment
company. From 1989 to 1994 he was President and Chairman of Turf Paradise, Inc.,
an Arizona based, publicly traded company that owns and operates a thoroughbred
horse racing facility conducting pari-mutuel wagering.
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 and
Secretary on August 5, 1997. 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.
Michael P. Perikly, CPA, was elected as Treasurer and Chief Financial
Officer of the Company on September 30, 1997 and was elected to the Board of
Directors in December, 1997. From 1990 to the present he has been Chief
Financial Officer of PNI, Inc., a privately owned investment company. From 1989
to 1994 Mr. Perikly was the Chief Financial Officer, Secretary and Treasurer of
Turf Paradise, Inc., an Arizona based, publicly traded company that owns and
operates a thoroughbred
24
<PAGE>
horse racing facility conducting pari-mutuel wagering.
Item 10. Executive Compensation
SUMMARY COMPENSATION TABLE
(A) (B) (C)
Name and principal
Position Year Salary
- ------------------ ---- ------
Robert L. Walker 1998 -
President*
Elizabeth A. Nicoli 1998 -
President and Chairman** 1997 -
1996 -
John L. Bradley 1997 $ 75,464
President*** 1996 $156,380
All executive officers
as a group (three) 1998 $ 28,000
(three) 1997 $188,904
1996 $194,630
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.
* Robert L. Walker became President of the Company on September 30, 1997.
** Elizabeth A. Nicoli became Chairman of the Company on October 23, 1996
and served as President from October 23, 1996 until her resignation on
September 29, 1997.
*** 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.
25
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table indicates as of June 11, 1998, 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
Robert L. Walker 351,669 50.63%
Director
3207 S. Hardy Drive
Tempe, Arizona 85282
A. Clarene Law 3,000 *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
Michael P. Perikly 2,500 *
Director
3207 S. Hardy Drive
Tempe, Arizona 85282
F. Ray Evarts 100 *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016
William S. Levine 124,233 (A) 17.9%
Levine Investments Limited Partnership
2525 E. Camelback Rd., Suite #275
Phoenix, Arizona 85016
Krist A. Jake 73,800 (B) 10.6%
P.O. Box 640219
San Francisco, California 94164
Bar-B-Bar Corporation 37,307 (C) 5.4%
Max C. Chapman, Jr.
P.O. Box 194
Scarborough, New York 10510
26
<PAGE>
All Executive Officers and 357,269 51.44%
Directors as a group (5 persons)
*Less than 1%
(A) Based on Schedule 13G filed with the Securities and Exchange Commission
on March 12, 1998 by William S. Levine and Levine Investments Limited
Partnership.
(B) Based on Schedule 13D filed with the Securities and Exchange Commission
on June 7, 1997 by Krist A. Jake.
(C) Based on Schedule 13D filed with the Securities and Exchange Commission
on December 6, 1991 by Bar-B-Bar Corporation and Max C. Chapman, Jr.
Item 12. Certain Relationships and Related Transactions
General and administrative - related party expenses for the years ended March
31, 1998, 1997 and 1996 represent management fees and administrative expenses
paid to related parties and totaled approximately $160,000, $412,000 and
$436,000, respectively. All related parties referred to in these financial
statements were owned by family members of Elizabeth A. Nicoli who were the
majority owners of the Company for the years ended March 31, 1997 and 1996.
Related parties during the year ended March 31, 1998 are owned by the Company's
majority owner, Robert Walker, or family members.
Operating - related party expenses represent leased snowmobiles under short-term
leases from a related party. For each of the years ended March 31, 1997 and
1996, snowmobile lease expense totaled $169,100.
During October 1997, the Company incurred borrowings under a line of credit from
PNI, Inc., a related party whose president is Robert Walker. For the year ended
March 31, 1998, outstanding borrowings totaled $1,105,000 (Note 5).
In March 1998, the Company sold 96 snowmobiles for total proceeds of $144,000
and a loss of $94,387. A related party of the Company purchased 46 snowmobiles
for a total of $82,800, of which all was recorded as a receivable at March 31,
1998.
At March 31, 1998, the Company recorded a payable of $17,929 to a related party
for certain operating expenses paid by the related party on behalf of the
Company. At March 31, 1997, the Company recorded a liability of $163,209 to a
related party related to leases of snowmobiles.
27
<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 13
Consolidated Balance Sheets - March 31, 1998
and 1997 14
Consolidated Statements of Income - years ended
March 31, 1998, 1997 and 1996 15
Consolidated Statements of Shareholders' Equity -
years ended March 31, 1998, 1997 and 1996 16
Consolidated Statements of Cash Flows-
years ended March 31, 1998, 1997 and 1996 17
Notes to consolidated financial statements 19
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
(b) None.
28
<PAGE>
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.
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/ Robert L. Walker
---------------------------------
Robert L. Walker, President
Date: 6/30/98
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/ Robert L. Walker /s/ Michael P. Perikly
- ----------------------------- ---------------------------------
Robert L. Walker Michael P. Perikly
President Chief Financial Officer/Treasurer
Date: 6/30/98 Date: 6/30/98
/s/ F. Ray Everts
- -----------------------------
F. Ray Evarts, Director
Date: 6/30/98
29
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. Dollar
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 212,593
<SECURITIES> 0
<RECEIVABLES> 129,571
<ALLOWANCES> 0
<INVENTORY> 50,394
<CURRENT-ASSETS> 422,652
<PP&E> 6,812,038
<DEPRECIATION> 1,845,325
<TOTAL-ASSETS> 5,392,767
<CURRENT-LIABILITIES> 1,367,915
<BONDS> 0
0
0
<COMMON> 7,184
<OTHER-SE> 3,821,079
<TOTAL-LIABILITY-AND-EQUITY> 5,392,767
<SALES> 1,821,890
<TOTAL-REVENUES> 4,630,786
<CGS> 1,080,088
<TOTAL-COSTS> 4,414,793
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 96,284
<INCOME-PRETAX> 215,993
<INCOME-TAX> 59,538
<INCOME-CONTINUING> 156,455
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,455
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
</TABLE>
