SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for Quarterly Period Ended March 31, 1996
-OR-
[ ] Transaction Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
- -------------------------------------------------------------------------------
Commission File Number 0-9789
- -------------------------------------------------------------------------------
Premier Parks Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-6137714
- -------------------------------------------------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11501 Northeast Expressway, Oklahoma City, OK 73131
- -------------------------------------------------------------------------------
(Address of principal executive offices, Zip Code)
(405) 478-2414
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:
At May 10, 1996, Premier Parks Inc. had outstanding 4,857,554 shares of
common stock, par value $.05 per share.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
PREMIER PARKS INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
--------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 10,050,000 $ 28,787,000
Accounts receivable 1,217,000 965,000
Inventories 4,127,000 2,904,000
Prepaid expenses 2,621,000 2,352,000
--------------- --------------
Total current assets 18,015,000 35,008,000
Other assets:
Investment in and advances to a partnership, at equity
229 East 79th Street Associates LP 1,117,000 1,118,000
Deferred charges 4,749,000 4,839,000
Deposits and other 2,993,000 3,111,000
--------------- --------------
Total other assets 8,859,000 9,068,000
Property and equipment, at cost 134,110,000 125,906,000
Less accumulated depreciation 11,468,000 9,905,000
--------------- --------------
Total property and equipment 122,642,000 116,001,000
Intangible assets 13,471,000 13,471,000
Less accumulated amortization 359,000 230,000
--------------- --------------
13,112,000 13,241,000
--------------- --------------
Total assets $ 162,628,000 $ 173,318,000
=============== ==============
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
(Unaudited)
-------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable and accrued expenses $ 7,385,000 $ 6,361,000
Accrued interest payable 1,386,000 4,158,000
Current portion of long-term debt 56,000 56,000
Current portion of capitalized lease obligations 1,026,000 1,009,000
-------------- --------------
Total current liabilities 9,853,000 11,584,000
Long-term debt and capitalized lease obligations:
Capitalized lease obligation 3,255,000 3,213,000
Long-term debt - Senior notes 90,000,000 90,000,000
-------------- --------------
Total long-term debt and capitalized lease obligations 93,255,000 93,213,000
Other long-term liabilities 3,376,000 3,465,000
Deferred income taxes 15,467,000 19,145,000
-------------- --------------
Total liabilities 121,951,000 127,407,000
-------------- --------------
Stockholders' equity
Preferred stock 200,000 200,000
Common stock 244,000 244,000
Capital in excess of par 79,261,000 79,261,000
Accumulated deficit (38,339,000) (33,105,000)
-------------- --------------
41,366,000 46,600,000
Less treasury stock, at cost 689,000 689,000
-------------- --------------
Total stockholders' equity 40,677,000 45,911,000
-------------- --------------
Total liabilities and stockholders' equity $ 162,628,000 $ 173,318,000
============== ==============
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
------------ ------------
Revenue:
Theme park admissions $ 1,688,000 $ 987,000
Theme park food, merchandise, and other 742,000 583,000
------------ ------------
Total revenue 2,430,000 1,570,000
Costs and expenses:
Operating expenses 4,958,000 1,698,000
Selling, general and administrative 2,027,000 882,000
Cost of products sold 7,000 12,000
Depreciation and amortization 1,695,000 557,000
------------ ------------
Total cost and expenses 8,687,000 3,149,000
Loss from operations (6,257,000) (1,579,000)
Other income (expense):
Interest expense, net (2,633,000) (579,000)
Equity in loss of partnership (19,000) (19,000)
Other income 0 0
------------ ------------
Total other income (expense) (2,652,000) (598,000)
Loss before income taxes (8,909,000) (2,177,000)
Provision for income tax (benefit) (3,675,000) (871,000)
------------ ------------
Net loss $ (5,234,000) $ (1,306,000)
============ ============
Net loss applicable to common stock $ (5,584,000) $ (1,306,000)
============ ============
Per share amounts:
Net income per share $ (1.15) $ (0.49)
============ ============
Average shares outstanding 4,857,554 2,655,219
============ ============
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
-------------- --------------
<S> <C> <C>
Cash flow from operating activities:
Net loss $ (5,234,000) $ (1,306,000)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 1,695,000 557,000
Amortization of debt issuance costs 176,000 23,000
Equity in loss of partnership 19,000 19,000
(Increase) in accounts receivable (252,000) (53,000)
(Decrease) in deferred income taxes (3,678,000) (870,000)
(Increase) in inventories and prepaid expenses (1,492,000) (102,000)
Decrease in deposits and other 118,000 1,031,000
Increase in accounts payable, accrued expenses
and other liabilities 932,000 414,000
Increase (decrease) in accrued interest payable (2,772,000) 22,000
---------------- --------------
Total adjustments (5,254,000) 1,041,000
---------------- --------------
Net cash used in operating activities (10,488,000) (265,000)
---------------- ---------------
Cash flow from investing activities:
Additions to property and equipment (8,148,000) (2,462,000)
Investments in and advances to partnerships (18,000) (23,000)
---------------- ---------------
Net cash used in investing activities (8,166,000) (2,485,000)
---------------- ---------------
Cash flow from financing activities:
Repayment of long-term debt - (15,000)
Proceeds from borrowings - 3,500,000
Payment of issuance costs (83,000) -
---------------- --------------
Net cash provided by (used in ) financing activities (83,000) 3,485,000
---------------- --------------
Increase (decrease) in cash and cash equivalents (18,737,000) 735,000
Cash and cash equivalents at beginning of period 28,787,000 1,366,000
--------------- --------------
Cash and cash equivalents at end of period $ 10,050,000 $ 2,101,000
=============== ==============
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 1 Financial Statements (Continued)
--------------------------------
PREMIER PARKS INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
1. Management's Discussion and Analysis of Financial Condition and Results of
Operations which follows these notes contains additional information on the
results of operations and the financial position of the Company. Those
comments should be read in conjunction with these notes. The Company's
annual report on Form 10-K for the year ended December 31, 1995 includes
additional information about the Company, its operations and its financial
position, and should be read in conjunction with this quarterly report on
Form 10-Q.
2. The information furnished in this report reflects all adjustments which are,
in the opinion of management, necessary to present a fair statement of the
results for the periods presented.
3. Results of operations for the three month period ended March 31, 1996 are not
indicative of the results expected for the full year. In particular, the
Company's theme park operations contribute most of their annual revenue
during the period from Memorial Day to Labor Day each year, while substantial
operating and other expenses are incurred before those operations commence.
4. Pursuant to a merger agreement, the Company acquired Funtime Parks, Inc., a
company owning three regional theme parks on August 15, 1995 for
approximately $60 million (the"Funtime Acquisition"). To fund the
acquisition, the Company issued $90 million aggregate principal amount of 12%
Senior Notes due 2003 ("Notes") and $20 million of convertible Preferred
Stock and converted approximately $9 million of previously existing
indebtedness into Company Common Stock. Except in the case of a Change of
Control ( as defined in the indenture relating to the Notes) and certain
other circumstances, no principal payment on the Notes is due and payable
prior to maturity (August 15, 2003). The acquisition was accounted for as a
purchase.
5. On April 4, 1996, holders of a majority of the outstanding shares of the
Company's Common and Preferred stock and the Company's board of directors
approved a one-for-five reverse stock split effective May 6, 1996. The par
value of the Common Stock was increased to $.05 per share from $.01 per
share. Additionally, the authorized shares of Common Stock of the Company
were reduced to 30,000,000. The accompanying consolidated financial
statements and notes to the consolidated financial statements reflect the
reverse stock split as if it had occurred as of the earliest date presented.
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
-----------------------------------------------
RESULTS OF OPERATIONS
Three months ended March 31, 1996 vs. three months ended March 31, 1995
- -------------------------------------------------------------------------
Operating revenues were $2.4 million in the first quarter of 1996 compared
to $1.6 million in the first quarter of 1995. This increase is attributable to
revenues generated by the three parks acquired in the Funtime Acquisition (the
"New Parks"). This increase in revenues was offset slightly due to the fact that
season pass sales for the parks owned in the first quarter of 1995 were down
$0.2 million from the first quarter of 1995. Operating expenses increased during
the first quarter of 1996 from $1.7 million in 1995 to $5.0 million. Of this
increase, $3.0 million relates directly to expenses incurred by the New Parks
and $0.3 million is due to the earlier opening of Frontier City, the Company's
theme park located in Oklahoma City. Selling, general and administrative
expenses increased from $0.9 million in the first quarter of 1995 to $2.0
million during the first quarter of 1996. Of this increase, $0.9 million
relates to costs incurred by the New Parks, and $0.2 million is attributable
to additional marketing dollars expended earlier in 1996 than in 1995 due to
the earlier opening of Frontier City. Depreciation expense increased $1.1
million primarily as a result of the recognition of depreciation and
amortization expense from the New Parks and to a lesser extent as a result
of the ongoing capital program at the Company's theme parks. Interest expense
increased $2.1 million related to the Notes. The effective tax rate used to
calculate the provision for income tax benefit was approximately 41% in the
first quarter of 1996 compared to approximately 40% in the comparable quarter
of 1995.
Because of the seasonal nature of the Company's theme park operations, most
of the Company's revenues are generated from Memorial Day to Labor Day.
LIQUIDITY, CAPITAL COMMITMENTS AND RESOURCES
At March 31, 1996, the Company's indebtedness (including capitalized leases)
aggregated $94.3 million, of which approximately $1.1 million matures prior to
March 31, 1997. In addition, subsequent to March 31, the Company has borrowed $1
million under its Senior Credit Facility and will make additional borrowings
thereunder in the second quarter. Amounts outstanding under the Facility must be
repaid in full for 45 consecutive days prior to November 1, 1997. The Company
anticipates repaying current indebtedness from funds generated from operations.
During the three months ended March 31, 1996, the Company used net cash of
$10.5 million in operating activities. Included in the net cash flows used in
operating activities for this period was the $5.4 million semi-annual interest
payment on the Company's $90.0 million Notes made on February 15. The remainder
of the net cash used in operating activities related to the Company's annual
maintenance and park pre-opening operating expenses. Net cash used in investing
activities in the first quarter of 1996 increased $5.7 million from the same
period in 1995, substantially all of which constituted capital expenditures. The
Company continues to
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
-----------------------------------------------
implement a capital improvement program for its parks pursuant to which it will
expend approximately $24 million for the 1996 season. Approximately $18 million
of this amount will be spent on additions to the New Parks, which have lacked
sustained capital improvements over the last several seasons. As of March 31,
1996, the Company had spent $12.5 million in capital improvements for the 1996
season (including certain amounts in the fourth quarter of 1995 after
completion of the 1995 season). The Company expects to fund the balance of its
planned capital expenditures for the season from the remaining proceeds of the
Notes, from funds generated from operations, and from funds available under the
Company's Senior Credit Facility.
The Company's liquidity could be adversely affected by any event or
condition, such as inclement weather that significantly reduces attendance at
any of its parks.
PART II - OTHER INFORMATION
Items 1 - 5
Not applicable
Item 6 Exhibits and Reports on Form 8-K.
(a) Exhibits
--------
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
None
<PAGE>
SIGNATURES
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.
Premier Parks Inc.
------------------
(Registrant)
/s/ Kieran E. Burke
------------------
Kieran E. Burke
Chairman/CEO
May 10,1996
/s/ Richard R. Webb
- ------------ ------------------
Date Richard R. Webb
Vice President/Accounting
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000701374
<NAME> PREMIER PARKS INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,050,000
<SECURITIES> 0
<RECEIVABLES> 1,217,000
<ALLOWANCES> 0
<INVENTORY> 4,127,000
<CURRENT-ASSETS> 18,015,000
<PP&E> 134,110,000
<DEPRECIATION> 11,468,000
<TOTAL-ASSETS> 162,628,000
<CURRENT-LIABILITIES> 9,853,000
<BONDS> 0
0
200,000
<COMMON> 244,000
<OTHER-SE> 40,922,000
<TOTAL-LIABILITY-AND-EQUITY> 162,628,000
<SALES> 2,430,000
<TOTAL-REVENUES> 2,430,000
<CGS> 7,000
<TOTAL-COSTS> 7,000
<OTHER-EXPENSES> 8,687,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,633,000
<INCOME-PRETAX> (8,909,000)
<INCOME-TAX> (3,675,000)
<INCOME-CONTINUING> (5,234,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,234,000)
<EPS-PRIMARY> (1.15)
<EPS-DILUTED> (1.15)
</TABLE>
