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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 25049
---------
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTER ENDED MARCH 31, 1997
Commission File Number -- 0-1607
MID-STATE RACEWAY, INC.
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(Exact Name of Registrant as Specified in Charter)
NEW YORK 15-0555258
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(State of Incorporation) (I.R.S. Employer Identification No.)
VERNON, NEW YORK 13476
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(315) 829-2201
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(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 X.
--- ---
Indicate the number of shares outstanding of each of the issuers' classes of
common stock, as of the close of the period covered by this report.
CLASS OUTSTANDING AT MARCH 31, 1997
- ----------------------------- -----------------------------
Common Stock, $0.10 par value 250,386
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<PAGE>
<TABLE>
A. SUMMARY OF FINANCIAL INFORMATION
MID-STATE RACEWAY, INC.
PROFIT AND LOSS INFORMATION
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED
-------------- -------------- -----------------
MARCH 31, 1997 MARCH 31, 1996 DECEMBER 31, 1996
0 RACING DAYS 17 RACING DAYS 115 RACING DAYS
-------------- -------------- ----------------
<S> <C> <C> <C>
Operating Revenue ................. $ 1,065,552 $ 1,101,820 $ 6,729,080
Operating Expense ................. 1,168,787 1,244,166 8,139,585
----------- ----------- -----------
Income (Loss) from Operations ..... (103,235) (142,346) (1,410,505)
----------- ----------- -----------
Other Income:
Commissions for Capital
Improvements ................... 1,010 13,434 146,224
Investment Income ................ 144 1,440 6,367
----------- ----------- -----------
Total Other Income ......... 1,154 14,874 152,591
----------- ----------- -----------
Income before provision for
Taxes on income ................. (102,081) (127,472) (1,257,914)
Provision (Credit) for Taxes
on Income ....................... 0 0 103,524
----------- ----------- -----------
NET INCOME (LOSS) ................. ($ 102,081) $ 127,472) ($1,361,438)
=========== =========== ===========
Earnings per weighted average
shares outstanding .............. ($0.41) ($0.51) ($5.44)
====== ====== ======
Cash dividend per share ........... $0.00 $0.00 $0.00
====== ====== ======
</TABLE>
2
<PAGE>
A. SUMMARY OF FINANCIAL INFORMATION (Continued)
MID-STATE RACEWAY, INC.
STATEMENT OF CASH FLOW
FOR THE THREE FOR THE
MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1997 1996
------------- ------------
Increase (Decrease) in Cash and Cash
Equivalents
Cash Flows from Operating Activities:
Net Income ................................... ($102,081) ($1,361,438)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation ............................... 69,231 245,805
Net amortization/accretion of
investments .............................. 0 4,705
Deferred income taxes ...................... 0 100,000
Allowance for doubtful accounts ............ 0 30,000
Changes in:
Restricted cash ............................ 178,330 (33,143)
Accounts Receivable ........................ 85,772 101,532
Prepaid expenses ........................... (85,276) 122,182
Other assets ............................... 0 6,500
Accounts payable ........................... (21,069) 629,150
Purse funds ................................ (103,210) 4,040
Uncashed winning ticket ................... (75,120) 29,103
Refundable income taxes .................... 0 19,328
Deferred retirement benefits ............... 0 (5,950)
--------- -----------
Net cash used in operating activities (53,422) (108,186)
--------- -----------
Cash Flows from Investing Activities:
Proceeds from maturities and sales of
available-for-sale investment
securities ................................. 91,039 456,989
Purchase of available-for-sale investment
securities ................................. 0 (285,000)
Purchase of properties and equipment ......... (18,362) (378,829)
--------- -----------
Net cash provided by investing activities ...... 72,677 (206,840)
--------- -----------
Net change in cash and cash equivalents ........ 19,255 (315,026)
Cash and cash equivalents, beginning
of period .................................... 236,541 551,567
--------- -----------
Cash and cash equivalents, end of period ....... $ 255,796 $ 236,541
========= ===========
3
<PAGE>
A. SUMMARY OF FINANCIAL INFORMATION (Continued)
MID-STATE RACEWAY, INC.
STATEMENT OF CASH FLOW
MANAGEMENT ANALYSES OF PROFIT AND LOSS INFORMATION
The Company's net loss from operations, of $102,081 for the quarter ended March
31, 1997, decreased $25,391 over the same period last year. A significant factor
in the reduction of the operating loss was the elimination of live racing during
the first quarter of 1997. The 1996 live racing schedule consisted of 115 live
race dates, 17 of which were run in the quarter ending March 31, 1996. The
current year's live racing season was negotiated with the New York State Racing
and Wagering Board to consist of 90 live racing days, beginning on April 18,
1997 and continuing through November 8, 1997. As the past several years have
displayed negative trends in both attendance and handle on live racing, to the
point where live racing has become unprofitable, the Company's management has
decided that a reduction in the number of scheduled live races must be
accomplished in order to safeguard the Company's survival.
Total wagering on thoroughbred and harness simulcasts during the quarter ended
March 31, 1997 decreased by $816,674 (18%) over the same period as last year.
This is the first quarterly decrease in simulcast handle since the inception of
full card simulcasting in the summer of 1994, indicating the position of the
local economy, and the impact of competition from the 1993 opening of Turning
Stone Casino, the continued expansion of the New York State Lottery through
Quick Draw and the competition from Off-Track Betting Corporations across the
State. These competing factors come at a time when the Central New York region
is reeling economically from the loss of tens of thousands of jobs at Griffis
Air Force Base, General Electric, Lockheed Martin, Miller Brewery, Smith Corona
and General Motors.
With declining handles generating fewer revenues, and the January 1997 defeat of
the proposed casino legislation that would have placed slot machines at Vernon
Downs, track management continues to focus on the reduction of operating
expenses. Reductions of expenses are being recognized through such efforts as
downsizing of employees in several departments, concessions from unions in
wages, health care benefits, vacations and retirement benefits.
LIQUIDITY AND CAPITAL RESOURCES
In 1997, the funding of financing activities and capital requirements for
Mid-State Raceway's business will be substantially sourced by cash from
operations, although the Company's financial condition may require alternative
sources for cash requirements. The Company's current ratio at March 31, 1997 was
approximately one to two.
4
<PAGE>
B. CAPITALIZATION AND SHAREHOLDER'S EQUITY
MID-STATE RACEWAY, INC.
BALANCE SHEET
MARCH 31, 1997 AND DECEMBER 31, 1996
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
ASSETS
Current Assets
Cash and cash equivalents .................... $ 255,796 $ 236,541
Cash restricted for purses & uncashed
winning tickets ............................ 12,212 190,542
Investments .................................. 12,135 14,075
Accounts receivable, net of allowance
for doubtful accounts of $30,000
in 1997 and 1996 ........................... 115,769 201,541
Prepaid insurance, taxes and other
expenses ................................... 136,742 51,466
----------- -----------
Total current assets .................... 532,654 694,165
Property, Plant and Equipment
Land, racing plant and equipment ............. 12,556,978 12,538,616
Other Properties ............................. 121,672 121,672
----------- -----------
12,678,650 12,660,288
Less accumulated depreciation ................ 10,662,999 10,593,768
----------- -----------
2,015,651 2,066,520
Other Assets
Investments .................................. 0 89,100
Deferred income taxes ........................ 325,902 325,902
Other Assets ................................. 128,160 128,160
----------- -----------
454,062 543,162
$ 3,002,367 $ 3,303,847
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable ............................. $ 867,445 $ 888,514
Current deferred retirement expense .......... 107,565 107,565
Uncashed winning tickets ..................... 12,212 87,332
Early closing and stake purse funds .......... 0 103,210
----------- -----------
Total current liabilities ................ 987,222 1,186,621
----------- -----------
Deferred retirement expense .................... 908,011 908,011
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Shareholders' equity
Common stock, par value $0.10 per share,
authorized 10,000,000 shares; issued
and outstanding 250,368 shares ............. 25,039 25,039
Additional paid-in-capital ................... 225,347 225,347
Retained earnings ............................ 854,453 956,534
Unrealized loss on marketable securities ..... 2,295 2,295
----------- -----------
Total shareholders' equity ................... 1,107,134 1,209,215
----------- -----------
$ 3,002,367 $ 3,303,847
=========== ===========
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 March 31, 1997.
SIGNATURES
Pursuant to the requirement 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: 05/09/97 /s/ FRANK O. WHITE, JR.
-------------------------------------
Frank O. White, Jr.
President and Chief Executive Officer
Date: 05/09/97 /s/ THOMAS P. HEGEMAN
-------------------------------------
Thomas P. Hegeman
Treasurer and Principal Financial &
Accounting Officer
6
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 268,008
<SECURITIES> 12,135
<RECEIVABLES> 145,769
<ALLOWANCES> 30,000
<INVENTORY> 0
<CURRENT-ASSETS> 532,654
<PP&E> 12,678,650
<DEPRECIATION> 10,662,999
<TOTAL-ASSETS> 3,002,367
<CURRENT-LIABILITIES> 987,222
<BONDS> 0
0
0
<COMMON> 25,039
<OTHER-SE> 1,082,095
<TOTAL-LIABILITY-AND-EQUITY> 3,002,367
<SALES> 0
<TOTAL-REVENUES> 1,065,552
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,168,787
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (102,081)
<INCOME-TAX> 0
<INCOME-CONTINUING> (102,081)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (102,081)
<EPS-PRIMARY> (0.41)
<EPS-DILUTED> 0
</TABLE>
