SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTER ENDED JUNE 30, 1998
Commission File Number 0-1607
MID-STATE RACEWAY, INC.
-------------------------------
(Exact Name of Registrant as Specified in Charter)
New York 15-0555258
- ----------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
Vernon, New York 13476
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(Address of Principal Executive Offices) (Zip Code)
(315) 829-2201
(Registrant's Telephone Number)
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 and (2) has been subject to the filing requirements for
at least the past 90 days. Yes No .
Indicate the number of shares outstandng of each of the users' classes of common
stock, as of the close of the period covered by this report.
Class Outstanding of June 30, 1998
- ----- ----------------------------
Common Stock, $0.10 par value 250,386
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<CAPTION>
A. Summary of Financial Information
MID-STATE REACEWAY, INC.
PROFIT AND LOSS INFORMATION
Three Months Ended Six Months Ended Year Ended
----------------------------- ------------------------------ ------------------
June 30, 1998 June 30, 1967 June 30, 1997 June 30, 1997 December 31, 1997
50 Racing Days 32 Racing Days 50 Racing Days 32 Racing Days 77 Racing Days
-------------- ------------- -------------- -------------- -----------------
<S> <C> <C> <C> <C> <C>
Operating Revenue ..................... $2,063,043 $1,490,005 $2,991,311 $2,555,557 $5,381,327
Operating Expense ..................... 2,432,172 1,766,449 3,443,529 2,935,236 5,992,916
---------- --------- ---------- ---------- ----------
Loss from Operations .................. (369,129) (276,444) (451,948) (379,679) (611,589)
---------- ---------- ---------- ---------- ----------
Other Income:
Commissions for Capital Improvements 0 29,765 0 30,775 81,952
Interest expense ................... (11,320) 0 (11,320) 0 0
Investment Income .................. 0 106 0 250 (21,470)
Gain on sale of other properties ... (1,258) 0 389,812 0 0
---------- ---------- ---------- ---------- ----------
Total Other Income .............. (12,578) 29,871 378,492 31,025 60,482
---------- ---------- ---------- ---------- ----------
Loss before provision for
Taxes on income .................... (381,707) (246,573) (73,456) (348,654) (551,107)
Provision (Credit) for Taxes
on Income .......................... 0 0 0 0 329,758
---------- ---------= ---------- ---------- ----------
NET INCOME (LOSS) ..................... ($ 381,707) ($ 246,573) ($ 73,456) ($ 348,654) ($ 880,865)
========== ========== ========= ========== ==========
Earnings per weighted average
shares outstanding ................. ($1.52) ($0.98) ($0.29) ($1.39) ($3.52)
========== ========== ========== ========== ==========
Cash dividend per share ............... $0.00 $0.00 $0.0 $0.00 $0.00
========== ========== ========== ========== ==========
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
A. (Continued)
MID-STATE RACEWAY, INC.
STATEMENT OF CASH FLOW
For the Six For The
Months Ended Year Ended
June 30, December 31,
1998 1997
-------------- -------------
Increase (Decrease) in Cash and Cash Equivalents
Cash Flows from Operating Activities:
<S> <C> <C>
Net Loss .......................................................... ($ 73,456) ($ 880,865)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation ................................................ 93,456 233,356
Net Amortization/accretion of investments ................... 0 26
Deferred income taxes ....................................... 0 327,432
Recoveries of doubtful accounts ............................. 0 (23,000)
Gain on sale of investment securities ....................... 0 (4,769)
Gain on sale of other properties ............................ (391,070) 0
Loss on disposal of equipment ............................... 0 1,431
Changes in:
Restricted cash ................................................ 15,270 128,332
Accounts receivable ............................................ (7,974) 39,880
Prepaid expenses ............................................... (206,197) 27,371
Other assets ................................................... (108,640) 22,257
Accounts payable ............................................... (403,720) 146,413
Purse funds .................................................... 0 (103,210)
Uncashed winning tickets and
capital improvement fund .................................... (15,270) (25,122)
Delinquent property taxes ...................................... 210,000 0
Deferred retirement benefits ................................... 0 (1,715)
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Net cash used in operating activities ................................ (887,592) (112,183)
---------- ---------
Cash Flows from Investing Activities:
Proceeds from maturities and sales of
available-for-sale investment securities ....................... 0 104,093
Proceeds from first mortgage loan ................................. 1,000,000 0
Proceeds from sale of other properties
and equipment .................................................. 391,071 1,200
Purchase of properties and equipment .............................. (42,702) (33,654)
---------- ----------
Net cash provided by investing activities ............................ 1,348,369 71,639
---------- ----------
Net change in cash and cash equivalents .............................. 460,777 (40,544)
Cash and cash equivalents, beginning of period ....................... 195,997 236,541
---------- ----------
Cash and cash equivalents, end of period ............................. $ 656,774 $ 195,997
========== ==========
</TABLE>
3
<PAGE>
A. (Continued)
Management Analyses of Profit and Loss Information
--------------------------------------------------
The Company's net loss from operations of $451,948 for the six months ended June
30, 1998, increased $72,269 over the same period last year. A significant factor
in the increase of the loss from the operations was the increase in the number
of live racing days during the first half of 1998. The 1997 live racing schedule
consisted of 77 live race dates, 32 of which were run in the six months ended
June 30, 1997. The current year's live racing schedule, which was approved by
the New York State Racing and Wagering Board, consists of 125 live racing days
which began April 3, 1998 and continuing through November 28, 1998. the period
ended June 30, 1998 consisted of 50 live race dates, 18 more than the comparable
period in 1997.
Wagering on live racing decreased an average of $3,588 per day. While the
average daily attendance is down by (.9%, the per capita average wagering is
7.9% above last year's level. Total wagering on thoroughbred and harness
simulcasts during the six months ended June 30, 1998 increased by $1,488,167
(20.3%) over the same period in 1997. The significant increase in full card
simulcasting in 1998 offset to a large extent the negative trends in both
attendance and handle displayed by live racing.
Management continues to focus on the reduction of operating expenses, increased
publicity, promotions and advertising to attract a larger number of patrons and
events using the facility, and legislation to aid New York State's harness track
industry, including Vernon Downs
Liquidity and Capital Resources
- -------------------------------
In 1998, the funding of business operations and capital requirements for
Mid-State Raceway's business will be substantially sourced by cash from
operations and loans and/or grants from local and state government agencies. In
addition, a $1 million loan secured by a first mortgage on its race track
property was obtained from a local individual in May 1998. The Company's current
ratio at June 30, 1998 was approximately 1.4 to 1.
4
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<TABLE>
<CAPTION>
B. Capitalization and Shareholder's Equity
MID-STATE RACEWAY, INC.
BALANCE SHEET
June 30, 1998 and December 31, 1997
June 30, December 31
ASSETS 1998 1997
----------- ------------
Current Assets
<S> <C> <C>
Cash ...................................................................... $ 656,774 $ 195,997
Cash restricted for uncashed winning tickets and Capital Improvements ..... 46,940 62,210
Accounts receivable, net of allowance for doubtful
accounts of $7,000 in 1998 and 1997 .................................... 194,990 187,016
Prepaid insurance, taxes and other expenses ............................... 227,937 21,740
----------- ------------
Total current assets ................................................ 1,126,641 466,963
Property, Plant and Equipment
Land, racing plant and equipment .......................................... 12,598,667 12,555,965
Other Properties .......................................................... 121,671 121,672
----------- ------------
12,720,338 12,677,637
Less accumulated depreciation ............................................. 10,913,545 10,820,080
----------- ------------
1,806,793 1,857,557
Other Assets ................................................................. 214,543 105,903
$ 3,147,977 $ 2,430,423
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses ..................................... $ 624,577 $ 1,028,297
Current deferred retirement expense ....................................... 107,565 107,565
Current portion-delinquent real estate taxes .............................. 36,000 0
Uncashed winning tickets and Capital Improvements ......................... 46,940 62,210
----------- ------------
Total current liabilities ........................................... 815,082 1,198,072
Deferred retirement expense .................................................. 906,296 906,296
First mortgage loan payable .................................................. 1,000,000 0
Long-term portion-delinquent real estate taxes ............................... 174,000 0
Shareholders' equity
Common stock, par value $0.10 per share, authorized
10,000,000 shares; issued and outstanding 250,386 shares ............... 25,039 25,039
Additional paid-in-capital ................................................ 225,347 225,347
Retained earnings ......................................................... 2,213 75,669
----------- ------------
Total shareholders' equity .......................................... 252,599 326,055
----------- ------------
$ 3,147,977 $ 2,430,423
=========== ============
</TABLE>
5
<PAGE>
Part II Other Information
Item 1 through 5 -- Not applicable
Item 6 -- Exhibits and Reports on Form 8-K
Reports on Form 8-K - There were no reports on Form 8-K filed for the three
months ended June 30, 1998.
Signatures
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MID-STATE RACEWAY, INC.
Date: 08/14/98 /s/ JUSTICE M. CHENEY
-------- ------------------------------------------------------
Justice M. Cheney, President & Chief Executive Officer
Date: 08/14/98 /s/ JAMES R. WISE
-------- ------------------------------------------------------
James R. Wise, Treasurer and Principal Financial
and Accounting Officer
6
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 703,714
<SECURITIES> 0
<RECEIVABLES> 201,990
<ALLOWANCES> 7,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,126,641
<PP&E> 12,720,338
<DEPRECIATION> 10,913,545
<TOTAL-ASSETS> 3,147,977
<CURRENT-LIABILITIES> 815,082
<BONDS> 0
0
0
<COMMON> 25,039
<OTHER-SE> 227,560
<TOTAL-LIABILITY-AND-EQUITY> 3,147,977
<SALES> 0
<TOTAL-REVENUES> 2,063,043
<CGS> 0
<TOTAL-COSTS> 2,433,430
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,320
<INCOME-PRETAX> (381,707)
<INCOME-TAX> 0
<INCOME-CONTINUING> (381,707)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (381,707)
<EPS-PRIMARY> (1.52)
<EPS-DILUTED> 0.00
</TABLE>
