<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For The Fifty-Three Week Fiscal Year Ended May 31, 1995
Commission File Number 0-2849
AMERICAN RECREATION CENTERS, INC.
Incorporated in California Federal Employer No. 94-1441151
11171 Sun Center Drive, Suite 120, Rancho Cordova, California 95670
Mailing Address: P. O. Box 580, Rancho Cordova, CA 95741
Registrant's Telephone Number: (916) 852-8005
Securities Registered Pursuant to Section 12 (b) of the Act:
None
Securities Registered Pursuant to Section 12 (g) of the Act:
Common Stock, No Par Value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
Registrant was $32,536,792 based upon the average trading price quoted on the
NASDAQ system on August 14, 1995. There are no affiliates within the definition
of Rule 405. The number of shares of Registrant's only class of common stock
outstanding at fiscal year end was 5,054,259 shares.
1
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
The financial statements of the Company as set forth under Item 8 of this report
on Form 10-K are incorporated herein by reference to the following pages of the
1995 Annual Report to Shareholders:
Page in
Annual
Report**
--------
Report of Independent Accountants* 14
Consolidated Balance Sheet at
May 31, 1995 and May 25, 1994* 6
Consolidated Statement of Income
and Retained Earnings for the
three years ended May 31, 1995* 7
Consolidated Statement of Cash Flows
for the three years ended May 31, 1995* 8
Notes to Consolidated Financial Statements* 9-13
(a)(2) Financial Statement Schedules
Report of Independent Accountants
on Financial Statement Schedule
for the three years ended May 31, 1995* 18
II - Valuation Reserves* 19
(a)(3) Financial Statements of the American Recreation Centers, Inc. Employee
Stock Ownership Plan for the year ended May 31, 1995.
* Filed previously.
** Incorporated by reference from the indicated pages of the 1995 Annual Report
to Shareholders.
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
2
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SIGNATURES
Pursuant to the requirement of Sections 13 and 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
AMERICAN RECREATION CENTERS, INC.
(Registrant)
Dated: November 28, 1995 Robert A. Crist
---------------------------------------
Robert A. Crist, President and
Chief Executive Officer
Pursuant to the requirement 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 dates indicated.
Robert A. Crist November 28, 1995
- -----------------------------------
Robert A. Crist, Principal
Executive Officer and Director,
President
Karen B. Wagner November 28, 1995
- -----------------------------------
Karen B. Wagner, Principal
Financial and Accounting Officer,
Vice President/Treasurer
Robert Feuchter November 28, 1995
- -----------------------------------
Robert Feuchter, Chairman of the
Board of Directors
G. Gervaise Davis III November 28, 1995
- -----------------------------------
G. Gervaise Davis III, Vice
President/Legal and Secretary
Stephen R. Chanecka November 28, 1995
- -----------------------------------
Stephen R. Chanecka, Director
3
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[LOGO APPEARS HERE]
American Recreation
Centers, Inc.
Employee Stock Ownership Plan
Financial Statements
May 31, 1995 and May 25, 1994
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Financial Statements Table of Contents
- --------------------------------------------------------------------------------
Page
Report of Independent Accountants 3
Financial Statements:
Statement of Net Assets Available for Benefits 4
Statement of Changes in Net Assets Available for Benefits 5
Notes to Financial Statements 6-9
Supplemental Schedule:
Assets Held for Investment at
May 31, 1995 (Schedule I) 10
<PAGE>
[LETTERHEAD OF PRICE WATERHOUSE LLP APPEARS HERE]
Report of Independent Accountants
October 27, 1995
To the Administrative Committee and Participants,
American Recreation Centers, Inc.
Employee Stock Ownership Plan
We were engaged to audit the financial statements of American Recreation
Centers, Inc. Employee Stock Ownership Plan (the Plan) as of May 31, 1995 and
May 25, 1994 and for the years then ended and the schedule as of May 31, 1995,
as listed in the accompanying table of contents. These financial statements and
the schedule are the responsibility of the Plan's management.
As permitted by Section 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, the Plan administrator instructed us not to perform, and
we did not perform, any auditing procedures with respect to the information
summarized in Note 6, which was certified by Imperial Trust Company, the trustee
of the Plan, except for comparing such information with the related information
included in the financial statements and schedule. We have been informed by the
Plan administrator that the trustee holds the Plan's investment assets and
executes investment transactions. The Plan administrator has obtained a
certification from the trustee as of and for the years ended May 31, 1995 and
May 25, 1994 that the information provided to the Plan administrator by the
trustee is complete and accurate.
As more fully described in Note 2 and as permitted under the Department of Labor
Rules and Regulations, the Plan prepares its financial statements on a modified
cash basis of accounting which is a comprehensive basis of accounting other than
generally accepted accounting principles.
Because of the significance of the information that we did not audit, we are
unable to, and do not, express an opinion on the accompanying financial
statements and schedule taken as a whole. The form and content of the
information included in the financial statements and schedule, other than that
derived from the information certified by the trustee, have been audited by us
in accordance with generally accepted auditing standards and, in our opinion,
are presented in compliance with the Department of Labor Rules and Regulations
for Reporting and Disclosure under the Employee Retirement Income Security Act
of 1974.
/s/ Price Waterhouse LLP
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Statement of Net Assets Available for Benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 31, May 25,
1995 1994
<S> <C> <C>
Assets
Assets held by trustee for investment:
Cash, including short-term investment funds $ 260,236 $ 16,339
Common stock of American Recreation Centers, Inc.,
686,479 and 737,464 shares, at market 4,934,411 5,070,071
---------- ----------
5,194,647 5,086,410
Employer contributions receivable from American
Recreation Centers, Inc. 414,306 382,219
---------- ----------
Total assets 5,608,953 5,468,629
Liabilities
Note payable to American Recreation Centers, Inc. -- 53,535
---------- ----------
Net assets available for benefits $5,608,953 $5,415,094
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Statement of Changes in Net Assets Availaable for Benefits
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fiscal years ended
May 31, May 25,
1995 1994
<S> <C> <C>
Contribution from American
Recreation Centers, Inc. $ 425,000 $ 425,000
Investment income:
Cash dividends 167,780 165,277
Interest 5,604 1,290
---------- ----------
598,384 591,567
Unrealized appreciation of common stock, net 186,641 723,068
---------- ----------
785,025 1,314,635
---------- ----------
Expenses and distributions:
Administrative fees 10,142 11,811
Interest expense 1,070 12,915
Distributions to former participants 579,954 615,761
---------- ----------
591,166 640,487
---------- ----------
Increase in net assets available for benefits 193,859 674,148
Net assets available for benefits, beginning of year 5,415,094 4,740,946
---------- ----------
Net assets available for benefits, end of year $5,608,953 $5,415,094
========== ==========
</TABLE>
See accompanying notes to financial statements.
5
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
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1. Description of Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
The Plan is a defined contribution plan covering all employees of American
Recreation Centers, Inc. (the Company) who are not covered by a collective
bargaining agreement and have met specified age and service requirements. The
Plan enables participants to acquire equity interests in the Company. The
Plan is designed to comply with Internal Revenue Code Section 4975(e)(7) and
the regulations thereunder, and is subject to the applicable provisions of
the Employee Retirement Security Act of 1974 (ERISA).
The Plan provides for vesting of 20% upon the completion of two years of
credited service and additional vesting of 20% per year up to 100% for each
additional year of service credited to the participant. Plan participants
totaled 1,582 and 1,216 at May 31, 1995 and May 25, 1994.
All contributions are made by the Company to the American Recreation Centers,
Inc. Employee Stock Ownership Trust (the Trust). Contributions may be paid in
cash, common stock of the Company or other qualified property. Common stock
and other qualified property are contributed at the fair market value of the
property on the date of contribution. Contributions are discretionary and are
determined by resolution of the Board of Directors of the Company.
Contributions and the income, forfeitures and gains and losses of the Plan
are allocated to participants at the end of each fiscal year.
The Company is the administrator of the Plan and has appointed an
administrative committee to supervise the operations of the Plan. The Company
believes that the Plan will continue without interruption, but reserves the
right to terminate the Plan at any time. In the event of termination of the
Plan, all participants will become fully vested and the assets of the Trust
will be distributed to or for the benefit of the participants of the Plan.
During the year, the American Recreation Centers, Inc. Employee Stock
Ownership Plan (the Plan) was amended and restated to provide for a
prohibited transaction exemption under Section 4975(d)(3) of the Internal
Revenue Code. This amendment and restatement has a retroactive effective date
of June 1, 1989.
2. Summary of Significant Accounting Policies
Basis of accounting
The accounts of the Plan are maintained on a modified cash basis. Only the
employer contributions are accrued. Income and expenses are accounted for on
a cash basis.
Tax status
The Internal Revenue Service has determined and informed the Company by a
letter dated November 1987, that the Plan is qualified and the trust
established under the Plan is tax-exempt under the appropriate sections of
the Code. The Plan has been amended since receiving that determination letter
and the Company was applied for a new determination letter. The Plan
6
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
administrator believes that the Plan is currently designed and being operated
in compliance with the applicable requirements of the Code. Therefore, they
believe that the Plan was qualified and the related trust was tax-exempt as
of the financial statement date.
Investment valuation
Investments in the common stock of the Company are valued at the average of
the last reported sales price and the latest quoted bid price at year-end.
Investment transactions and investment income
Dividend income is recorded on the payment date.
In accordance with the policy of stating investments at fair market value,
annual unrealized market appreciation or depreciation of investments is
reflected in the statement of changes in net assets available for benefits.
Distributions
Distributions to participants are based on the value of the Company's common
stock at the time of distribution. The common stock is valued at the average
of the last reported sales price and the latest quoted bid price on the date
of distribution. Such distributions are made by the trustee at least annually
but not more frequently than quarterly.
Distributions are accounted for on a cash basis for financial statement
purposes. This accounting results in a difference between the Plan's
financial statements and its Form 5500 filed with the Internal Revenue
Service, as benefit obligations are accounted for on an accrual basis for
purposes of the Form 5500. The difference of $199,608 and $383,675 at May 31,
1995 and May 25, 1994, represents the accumulated benefit obligation on Form
5500.
Expenses of the Plan
Direct expenses incurred in the administration of the Plan and the trust are
paid by the Plan. No indirect expenses are allocated to the Plan by the
Company.
7
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. Common Stock of American Recreation Centers, Inc.
Common stock of the Company held by the Plan comprised the following:
<TABLE>
<CAPTION>
May 31, 1995
Allocated Unallocated Total
<S> <C> <C> <C>
Number of Shares 686,479 -- 686,479
---------- ----------- ----------
Cost $3,587,277 -- $3,587,277
========== =========== ==========
Market $4,934,411 -- $4,934,411
========== =========== ==========
<CAPTION>
May 25, 1994
Allocated Unallocated Total
<S> <C> <C> <C>
Number of Shares 725,755 11,709 737,464
---------- ----------- ----------
Cost $3,714,863 $ 56,350 $3,771,213
========== =========== ==========
Market $4,989,572 $ 80,499 $5,070,071
========== =========== ==========
</TABLE>
The unallocated shares represent Company common stock held in trust for the
benefit of Plan participants. The stock was purchased by the Plan using the
proceeds of a loan from the Company (Note 4). Shares of the stock are
allocated to participants based upon the ratio of the payments of principal
and interest on the note payable to the Company during the Plan year, to the
total payments of principal and interest over the remaining term of the loan.
During fiscal 1995 the loan was paid off, resulting in all the unallocated
stock being allocated to the participants.
4. Note Payable to American Recreation Centers, Inc.
The Company had a note payable to a bank of which the original proceeds were
loaned to the Plan. The Plan used the proceeds to acquire shares of the
Company's common stock. The Plan's note payable to the Company and the
Company's bank loan had similar terms. In August 1994, the loan balance was
paid in full. Proceeds for the payments were obtained from Company
contributions and cash dividends received.
8
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American Recreation Centers, Inc.
Employee Stock Ownership Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
5. Contributions
For fiscal year ended May 25, 1994, the Company made a cash contribution of
$425,000.
At May 31, 1995, the Company had authorized a contribution to the Plan of
$425,000; however, the Company has not yet determined whether this
contribution will be made in the form of cash or common stock of the Company.
The Company has until December 15, 1995 to make this determination.
6. Financial Data Certified by the Trustee
The financial statements and schedule appearing on pages 4, 5, and 10 of this
report were prepared from financial data certified by the trustee, Imperial
Trust Company, in accordance with Section 2520.103-5 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under ERISA.
9
<PAGE>
American Recreation Centers, Inc.
Employee Stock Ownership Plan
Assets Held for Investment at May 31, 1995 Schedule I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Current
Identity of Issue of Investment Cost Value
<S> <C> <C> <C>
American Recreation Centers, Inc. 686,479 shares $3,587,277 $4,934,411
Short-term investment funds 260,200 units 260,200 260,200
----------
$5,194,611
==========
</TABLE>
10
