<PAGE>
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
June 30, 1997
-OR-
/ / Transaction Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transaction period
from _________ to _________
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Commission File Number 0-9789
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Premier Parks Inc.
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(Exact name of registrant as specified in its charter)
Delaware 73-6137714
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(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11501 Northeast Expressway, Oklahoma City, OK 73131
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(Address of principal executive offices, Zip Code)
405-475-2500
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(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 August 5, 1997, Premier Parks Inc. had outstanding 18,300,672 shares
of Common Stock, par value $.05 per share.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PREMIER PARKS INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, DEC. 31,
1997 1996
(Unaudited)
---------------- ---------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 164,733,000 $ 4,043,000
Accounts receivable 11,293,000 1,180,000
Inventories 8,820,000 4,200,000
Prepaid expenses 4,604,000 3,416,000
--------------- -------------
Total current assets 189,450,000 12,839,000
Other assets:
Deferred charges 11,235,000 6,752,000
Deposits and other assets 6,434,000 9,087,000
--------------- -------------
Total other assets 17,669,000 15,839,000
Property and equipment, at cost 366,492,000 263,175,000
Less accumulated depreciation 25,146,000 17,845,000
--------------- -------------
Total property and equipment 341,346,000 245,330,000
Intangible assets 43,083,000 31,669,000
Less accumulated amortization 1,827,000 874,000
--------------- -------------
Total intangible assets 41,256,000 30,795,000
--------------- -------------
Total assets $ 589,721,000 $ 304,803,000
--------------- -------------
--------------- -------------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 33,355,000 $ 11,059,000
Accrued interest payable 9,255,000 4,304,000
Current portion of capitalized lease obligations 1,347,000 1,492,000
--------------- -------------
Total current liabilities 43,957,000 16,855,000
Long-term debt & capitalized lease obligations:
Capitalized lease obligations 1,799,000 1,768,000
Credit facility - 57,574,000
Long-term debt - Senior notes 215,000,000 90,000,000
--------------- -------------
Total long-term debt & capitalized lease obligations 216,799,000 149,342,000
Other long-term liabilities 4,661,000 4,846,000
Deferred income taxes 24,739,000 20,578,000
TOTAL LIABILITIES $ 290,156,000 $ 191,621,000
--------------- -------------
Stockholders' equity
Common stock 917,000 569,000
Paid-in capital in excess of par 334,721,000 144,642,000
Accumulated deficit (35,384,000) (31,340,000)
--------------- -------------
300,254,000 113,871,000
Less treasury stock, at cost 689,000 689,000
--------------- -------------
Total stockholders' equity 299,565,000 113,182,000
--------------- -------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 589,721,000 $ 304,803,000
--------------- -------------
--------------- -------------
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
PREMIER PARKS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
1997 1996
--------------- --------------
<S> <C> <C>
Revenue:
Theme park admissions $ 34,708,000 $ 12,524,000
Theme park food, merchandise, & other 27,760,000 14,429,000
--------------- --------------
Total revenue 62,468,000 26,953,000
Costs and expenses:
Operating expenses 24,422,000 12,442,000
Selling, general and administrative 13,345,000 7,138,000
Cost of products sold 6,480,000 3,285,000
Depreciation and amortization 4,284,000 1,699,000
--------------- --------------
Total cost and expenses 48,531,000 24,564,000
Income (loss) from operations 13,937,000 2,389,000
Other income (expense):
Interest expense, net (4,451,000) (3,000,000)
Other income (expense) (43,000) (22,000)
--------------- --------------
Total other income (expense) (4,494,000) (3,022,000)
Income (loss) before income taxes 9,443,000 (633,000)
Income tax expense (benefit) 3,745,000 (142,000)
--------------- --------------
Net income (loss) $ 5,698,000 $ (491,000)
=============== ==============
Net income (loss)
applicable to common stock $ 5,698,000 $ (744,000)
=============== ==============
Per share amounts:
Net income (loss) per share - primary $ 0.30 $ (0.11)
=============== ==============
Net income (loss) per share - fully diluted $ 0.30 $ (0.11)
=============== ==============
Average shares outstanding - primary 18,767,075 6,774,739
=============== ==============
Average shares outstanding - fully diluted 18,827,339 6,774,739
=============== ==============
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
------------- --------------
<S> <C> <C>
REVENUE:
Theme park admissions $ 37,095,000 $ 14,212,000
Theme park food, merchandise, & other 29,637,000 15,171,000
-------------- ------------
TOTAL REVENUE 66,732,000 29,383,000
COSTS AND EXPENSES:
Operating expenses 32,617,000 17,401,000
Selling, general and administrative 17,744,000 9,165,000
Cost of products sold 6,532,000 3,293,000
Depreciation and amortization 8,257,000 3,393,000
-------------- ------------
TOTAL COST AND EXPENSES 65,150,000 33,252,000
Income (loss) from operations 1,582,000 (3,869,000)
OTHER INCOME (EXPENSE):
Interest expense, net (8,374,000) (5,633,000)
Other income (expense) (62,000) (41,000)
-------------- ------------
TOTAL OTHER INCOME (EXPENSE) (8,436,000) (5,674,000)
Income (loss) before income taxes (6,854,000) (9,543,000)
Income tax expense (benefit) (2,810,000) (3,817,000)
-------------- ------------
NET INCOME (LOSS) $ (4,044,000) $ (5,726,000)
-------------- ------------
-------------- ------------
NET INCOME (LOSS)
APPLICABLE TO COMMON STOCK $ (4,044,000) $ (6,329,000)
-------------- ------------
-------------- ------------
Per share amounts:
NET INCOME (LOSS) PER SHARE - PRIMARY $ (0.24) $ (1.09)
-------------- ------------
-------------- ------------
NET INCOME (LOSS) PER SHARE - FULLY DILUTED $ (0.24) $ (1.09)
-------------- ------------
-------------- ------------
Average shares outstanding - primary 17,111,962 5,816,146
-------------- ------------
-------------- ------------
Average shares outstanding - fully diluted 17,111,962 5,816,146
-------------- ------------
-------------- ------------
</TABLE>
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------------- ------------------
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (4,044,000) $ (5,726,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 8,257,000 3,393,000
Amortization of debt issuance costs 797,000 378,000
Increase in accounts receivable (10,029,000) (5,621,000)
Deferred income taxes (2,935,000) (3,820,000)
Increase in inventories and prepaid expenses (5,646,000) (2,764,000)
Decrease in deposits and other assets 3,714,000 123,000
Increase in accounts payable, accrued expenses, and other
liabilities 19,097,000 6,659,000
Increase (decrease) in accrued interest payable 4,951,000 (11,000)
--------------- --------------
Total adjustments 18,206,000 (1,663,000)
--------------- --------------
Net cash provided by (used in) operating activities 14,162,000 (7,389,000)
--------------- --------------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property and equipment (83,723,000) (24,210,000)
Acquisition of theme park, net of cash acquired (21,376,000) -
Other investments - (27,000)
--------------- --------------
Net cash used in investing activities (105,099,000) (24,237,000)
--------------- --------------
CASH FLOW FROM FINANCING ACTIVITIES:
Repayment of long-term debt (65,188,000) (92,000)
Proceeds from borrowings 132,500,000 -
Proceeds from issuance of common stock 189,427,000 65,385,000
Payment of debt issuance costs (5,112,000) (128,000)
--------------- --------------
Net cash provided by financing activities 251,627,000 65,165,000
--------------- --------------
Increase in cash and cash equivalents 160,690,000 33,539,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,043,000 28,787,000
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 164,733,000 $ 62,326,000
=============== ==============
</TABLE>
<PAGE>
PREMIER PARKS INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997
1. GENERAL.
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, 1996 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. 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.
Results of operations for the six month and three month periods ended
June 30, 1997 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 during the whole year.
2. COMMON STOCK.
On April 4, 1996, a majority of the Company's common and preferred
shareholders 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
common shares of the Company were changed 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 January
1, 1996.
On June 4, 1996, and June 5, 1996, the Company issued 3,425,000 and
513,750, respectively, of its common shares resulting in net proceeds to the
Company of $65,000,000. Additionally, on June 4, 1996, the Company exchanged
2,560,928 of its common shares for all 200,000 shares of its previously
outstanding preferred stock.
On January 31, 1997, the Company issued 6,900,000 of its common shares
resulting in net proceeds to the Company of approximately $189,000,000.
On June 11, 1997, a majority of the Company's common shareholders
approved an increase in the authorized common shares of the Company to
90,000,000 shares.
3. ACQUISITION OF THEME PARKS.
On October 31, 1996, the Company acquired all of the interests in a
partnership which owned substantially all of the assets used in the operation of
Elitch Gardens, located in Denver, Colorado, for $62,500,000 in cash. Thereupon,
the partnership dissolved by operation of law. As a result, the assets were
directly owned by the Company. (In April 1997, these assets were transferred to
a wholly-owned subsidiary of the Company.) The transaction was accounted for as
a purchase. In addition, the Company has entered into a
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 1 - Financial Statements (Continued)
- ---------------------------------
five-year consulting and non-competition agreement with the president of the
general partner of the seller, Elitch Gardens Company, providing for annual
consulting fees of $100,000. Based upon the purchase method of accounting, the
purchase price was primarily allocated to property and equipment with $4,506,000
of costs recorded as intangible assets, primarily goodwill.
On November 19, 1996, the Company acquired all of the interests in two
partnerships which owned substantially all of the assets used in the operation
of the two Waterworld/USA water parks for an aggregate cash purchase price of
approximately $17,250,000, of which $862,500 was placed in escrow to fund
potential indemnification claims by the Company. Thereupon, the partnerships
dissolved by operation of law. As a result, the assets were directly owned by
the Company. (In 1997, the assets were transferred to wholly-owned
subsidiaries of the Company.) The transaction was accounted for as a purchase.
Based upon the purchase method of accounting, the purchase price was primarily
allocated to property and equipment with $5,110,000 of costs recorded as
intangible assets, primarily goodwill.
On December 4, 1996, the Company acquired all of the interests in a
limited liability company which owned substantially all of the assets used in
the operation of The Great Escape and Splash Water Kingdom for a cash purchase
price of $33,000,000. The transaction was accounted for as a purchase. In
connection with the acquisition, the Company entered into a five-year
non-competition agreement and a related consulting agreement with the former
owner, providing for an aggregate consideration of $1,250,000. In addition, as a
component of the transaction, the Company issued 9,091 shares of its common
stock ($200,000) to an affiliate of the former owner. Based upon the purchase
method of accounting, the purchase price was primarily allocated to property and
equipment with $9,221,000 of costs recorded as intangible assets, primarily
goodwill.
On February 5, 1997, the Company purchased all of the outstanding
common stock of Stuart Amusement Company, the owner of Riverside Park and an
adjacent multi-use stadium, for a purchase price of approximately $22,200,000
($1,000,000 of which was paid through issuance of 32,129 of the Company's common
shares). The transaction was accounted for as a purchase. As of the acquisition
date and after giving effect to the purchase, $7,096,000 of deferred tax
liabilities were recognized for the tax consequences attributable to the
differences between the financial statement carrying amounts and the tax basis
of Stuart Amusement Company's assets and liabilities. Approximately $10,261,000
of cost in excess of the fair value of the net assets acquired was recorded as
goodwill. The balance of the purchase price was allocated among the assets of
Stuart Amusement Company on the basis of estimates of fair value. Of the
purchase price, $1,025,000 was placed in escrow to fund potential
indemnification claims by the Company.
The accompanying financial statements for the six months ended June 30,
1997 reflect the results of these acquisitions from January 1, 1997 or, in the
case of Riverside Park, its acquisition date. The accompanying financial
statements for the three months ended June 30, 1997 reflect the results of these
acquisitions for the entire period. The accompanying historical financial
statements for the three month and six month periods ended June 30, 1996 do not
reflect the results of these acquisitions. (The parks included in all of these
acquisitions are referred to herein as the "Acquired Parks".)
The following is the summarized pro forma results of operations for the
six months ended June 30, 1996. (They include the results of Riverside Park for
a full six months and of Great Escape from January 1, 1996 to June 23, 1996.)
<PAGE>
THE COMPANY
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
(In thousands, except for share and per share data)
<TABLE>
<CAPTION>
COMPANY
HISTORICAL HISTORICAL COMBINED PRO FORMA PRO FORMA
PREMIER ACQUIRED PARKS COMPANY ADJUSTMENTS (UNAUDITED)
--------------- ---------------- ------------- ------------- ---------------
Revenue:
<S> <C> <C> <C> <C> <C>
Theme park admissions $ 14,212 $ 10,741 $24,953 $ $ 24,953
Theme park food, merchandise
and other 15,171 10,853 26,024 100 26,124
---------------- --------------- ------------- ------------- ---------------
Total 29,383 21,594 50,977 100 51,077
Operating costs and expenses:
Operating expenses 17,401 10,970 28,371 (100) 27,871
(400)
Selling, general and
administrative 9,165 9,188 18,353 (2,413) 15,940
Costs of products sold 3,293 2,667 5,960 -- 5,960
Depreciation and amortization 3,393 3,140 6,533 323 6,856
---------------- --------------- ------------- ------------- ---------------
Total 33,252 25,965 59,217 (2,590) 56,627
Income (loss) from operations (3,869) (4,371) (8,240) 2,690 (5,550)
Other income (expense):
Interest expense, net (5,633) (3,042) (8,675) 732 (7,943)
Other income (expense) (41) (114) (155) 50 (105)
---------------- --------------- ------------- ------------- ---------------
Total (5,674) (3,156) (8,830) 782 (8,048)
Income (loss) before income
taxes (9,543) (7,527) (17,070) 3,472 (13,598)
Income tax expense (benefit) (3,817) (207) (4,024) (1,147) (5,171)
---------------- --------------- ------------- ------------- ---------------
Net income (loss) $ (5,726) $ (7,320) $(13,046) $ 4,619 $ (8,427)
================ =============== ============= ============= ===============
Net income (loss) applicable to
common stock $ (6,329) $ (7,320) $(13,649) $ 3,222 $ (10,427)
Net income (loss) per common share $ (1.09) $ (0.89)
Weighted average shares 5,816,146 11,702,000
EBITDA $ (457) $ (1,345) $ (1,802) $ 3,063 $ 1,261
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 1 - Financial Statements (Continued)
- -------------------------------------------
PART I - FINANCIAL INFORMATION (Continued) Item 1 - Financial Statements
(Continued)
- -------------------------------------------
4. LONG-TERM INDEBTEDNESS.
(a) In August 1995, the Company issued $90,000,000 principal amount of
senior notes (the "1995 Notes"). The 1995 Notes are senior unsecured obligations
of the Company, which mature on August 15, 2003. The 1995 Notes bear interest at
12% per annum payable semiannually on August 15 and February 15 of each year.
The 1995 Notes are redeemable, at the Company's option, in whole or part, at any
time on or after August 15, 1999, at varying redemption prices. Additionally, at
any time prior to August 15, 1998, the Company may redeem in the aggregate up to
33 1/3% of the original aggregate principal amount of the 1995 Notes with the
proceeds of one or more public equity offerings at a redemption price of 110% of
the principal amount. The 1995 Notes are guaranteed on a senior, unsecured,
joint and several basis by all of the Company's principal operating
subsidiaries.
The proceeds of the 1995 Notes were used in the acquisition by the
Company of the Funtime Parks in August 1995 and in the refinancing at that time
of previously existing indebtedness.
The indenture under which the 1995 Notes were issued was amended on
January 21, 1997, in contemplation of the Company's January 1997 senior debt and
equity offerings. The indenture places limitations on operations and sales of
assets by the Company or its subsidiaries, permits incurrence of additional debt
only in compliance with certain financial ratios, and limits the Company's
ability to pay cash dividends or make other distributions to the holders of its
capital stock or to redeem such stock.
The indenture, as amended, permits the Company, subject to certain
limitations, to incur additional indebtedness, including $125,000,000 of
indebtedness issued January 31, 1997 described in note (c) below and secured
senior revolving credit facility indebtedness of up to $75,000,000.
(b) In connection with the acquisitions described in Note 3, in October
1996 the Company entered into a senior secured credit facility (the "Credit
Facility") with a syndicate of lenders. The Credit Facility had an aggregate
availability of $115,000,000. Interest rates per annum under the Credit Facility
were equal to a base rate equal to the higher of the Federal Funds Rate plus
1/2% or the prime rate of Citibank N.A., in each case plus the Applicable Margin
(as defined thereunder) or the London Interbank Offered Rate plus the Applicable
Margin. The Credit Facility contained restrictive covenants that, among other
things, limited the ability of the Company and its subsidiaries to dispose of
assets; incur additional indebtedness or liens; pay dividends; repurchase stock;
make investments; engage in mergers or consolidations and engage in certain
transactions with subsidiaries and affiliates. In addition, the Credit Facility
required that the Company comply with certain specified financial ratios and
tests.
On January 31, 1997, the Company and the lenders agreed to amend the
Credit Facility. Under the amendments, $30,000,000 is available as a revolving
credit facility, which will remain in place through December 31, 2001 (without
reduction prior to that date). The balance of the facility was converted into an
$85,000,000 reducing revolving credit facility. This portion of the facility
will be available to fund acquisitions and make capital improvements. The amount
available under this portion of the facility will reduce to $75,000,000 on
December 31, 1999, to $45,000,000 on December 31, 2000, and will mature
<PAGE>
PART I - FINANCIAL INFORMATION (Continued)
Item 1 - Financial Statements (Continued)
- -------------------------------------------
on December 31, 2001. Borrowings under the amended Credit Facility are secured
by substantially all the assets of the Company and its subsidiaries (other than
real estate) and are guaranteed by the Company's operating subsidiaries. The
restrictive covenants are essentially the same as those of the original October
1996 Credit Facility. No amounts were outstanding under this Credit Facility as
of June 30, 1997.
(c) On January 31, 1997, the Company issued $125,000,000 of 9 3/4%
senior notes due January 2007 (the "1997 Notes"). The 1997 Notes are senior
unsecured obligations of the Company and equal to the 1995 Notes in priority
upon liquidation. Interest is payable on January 15 and July 15 of each year,
commencing July 15, 1997. The 1997 Notes are redeemable, at the Company's
option, in whole or in part, at any time on or after January 15, 2002, at
varying redemption prices. Additionally, at any time prior to January 15, 2000,
the Company may redeem in the aggregate up to 33 1/3% of the original aggregate
principal amount of 1997 Notes with the proceeds of one or more public equity
offerings at a redemption price of 110% of the principal amount. The 1997 Notes
are guaranteed on a senior, unsecured, joint and several basis by all of the
Company's principal operating subsidiaries.
The indenture under which the 1997 Notes were issued contains covenants
substantially similar to those of the 1995 Notes. A portion of the proceeds were
used to fully pay amounts outstanding under the Company's Credit Facility.
<PAGE>
PART 1 FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
- ------------------------------------------------
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
Operating revenues:
Operating revenues were $66.7 million in the six months ended June 30,
1997 compared to $29.4 million actual operating revenues and $51.0 million
actual combined operating revenues (including the revenues of the Acquired
Parks), in the first six months of 1996. The aggregate $15.7 million (30.8%)
increase in operating revenues over actual combined results for the 1996 period
includes a $12.1 million (48.7%) increase in admissions revenue and a $3.6
million (13.9%) increase in food, merchandise and other revenues. This revenue
increase is attributable to a substantial increase in aggregate season pass
sales at the Company's eleven parks and recognition of season pass sale revenue
upon receipt in accordance with the Company's accounting policies, as well as a
combined 15% increase in attendance at the eleven parks over the prior year
period. (There is no accrual for anticipated business interruption insurance
proceeds in connection with the twelve day closure of the Company's Concord
water park which occurred during the 1997 period. See "-Liquidity, Capital
Commitments and Resources.")
Operating expenses:
Operating expenses increased during the first six months of 1997 to
$32.6 million from $17.4 million actual operating expenses and $28.4 million
actual combined operating expenses (including the expenses of the Acquired
Parks) in the first six months of 1996. This $4.2 million (14.8%) increase from
actual combined operating expenses for the 1996 period consists of a $1.67
million increase (9.6%) at the six parks owned by the Company during its 1996
season and a $2.58 million increase (23.6%) at the Acquired Parks. These
increases primarily reflect increased staffing levels and wage rates, increased
repairs and maintenance, increased utility expenses for new attractions and
other miscellaneous increases.
Selling, general and administrative:
Selling, general and administrative expenses were $17.7 million for the
six months ended June 30, 1997, an increase from $9.2 million actual for the six
months ended June 30, 1996, but a decrease from $18.4 million actual combined
(including the Acquired Parks) for the six months ended June 30, 1996. Selling,
general and administrative expenses at the six parks owned by the Company for
the 1996 period (including corporate) increased by $0.5 million in the period,
primarily reflecting increased personnel and advertising costs, offset by a
decrease in insurance expense. Selling, general and administrative expenses at
the Acquired Parks decreased by $1.2 million, notwithstanding increases in
marketing expenses, as a result of significant savings in personnel, insurance,
professional services and other areas.
Costs of products sold:
Costs of products sold increased from $3.3 million actual and $6.0
million actual combined (including the Acquired Parks) for the first six months
of 1996 to $6.5 million for the first six months of 1997. These increases
primarily relate to increased sales.
<PAGE>
PART 1 FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
- ------------------------------------------------
Depreciation and Interest expense:
Depreciation and amortization expense increased from $3.4 million
actual in 1996 to $8.3 million actual in 1997, primarily as a result of the
recognition of depreciation and amortization expense from the Acquired Parks and
the ongoing capital program at the Company's theme parks. Interest expense, net
increased from $5.6 million to $8.4 million as a result of interest on the 1997
Notes and amortization of costs incurred in connection with the Credit Facility.
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
Operating revenues:
Operating revenues were $62.5 million in the three month period ended
June 30, 1997 compared to $27.0 million in the three month period ended June 30,
1996. Of this $35.5 million increase, $32.3 million is attributable to revenues
generated by the Acquired Parks whose results are not included for 1996, and
$3.2 million is attributable to an increase at the Company's original six
parks, due principally to an increase in attendance and season pass sales over
the same prior year period.
Operating expenses:
Operating expenses increased during the three months ended June 30,
1997 from $12.4 million in 1996 to $24.4 million. Of this $12.0 million
increase, $10.6 million relates directly to expenses incurred by the Acquired
Parks whose results are not included for 1996 and $1.4 million is related to the
Company's original six parks, principally arising from increased salary and wage
expense, increased repair and maintenance and costs associated with new
attractions.
Selling, general and administrative:
Selling, general and administrative expenses increased from $7.1
million in the three months ended June 30, 1996 to $13.3 million during the
three months ended June 30, 1997. All of this increase relates to costs incurred
by the Acquired Parks which were not included in 1996.
Costs of products sold:
Costs of products sold increased from $3.3 million for the three months
ended June 30, 1996 to $6.5 million for the three months ended June 30, 1997. Of
this $3.2 million increase, $2.9 million relates to costs incurred at the
Acquired Parks, and $0.3 million is attributable to the operations of the
Company's original six parks, all as a result of increased volume.
Depreciation and interest expense:
Depreciation and amortization expense increased $2.6 million primarily
as a result of the recognition of depreciation and amortization expense from the
Acquired Parks and to a lesser extent as a result of the ongoing capital program
at the Company's theme parks.
<PAGE>
PART 1 FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
- ------------------------------------------------
Interest expense, net increased $1.5 million as a result of interest on the 1997
Notes and amortization of costs incurred in connection with the Credit Facility.
LIQUIDITY, CAPITAL COMMITMENTS AND RESOURCES
At June 30, 1997, the Company's indebtedness (including capitalized
leases) aggregated $218.1 million, of which approximately $1.3 million matures
prior to June 30, 1998. The Company anticipates repaying current indebtedness
from funds generated from operations.
During the six months ended June 30, 1997, the Company generated net
cash of $14.2 million in operating activities. Net cash used in investing
activities in the first six months of 1997 increased to $105.1 million, which
consisted of capital expenditures at the Company's parks (including Marine
World, a California marine and wildlife park managed by the Company) and the
acquisition of Riverside Park in Massachusetts. The Company expects to fund
the balance of its planned capital expenditures for the season from existing
cash. The Company generated $251.6 million of net cash from financing
activities in the six months ended June 30, 1997, mainly from the proceeds
from the issuance of the 1997 Notes and from the sale of 6,900,000 shares of
Company Common Stock, both of which occurred in January 1997. A total of $65.2
million of these proceeds was used to pay down in full amounts which had been
drawn under the October 1996 Credit Facility.
On June 2, 1997, a slide collapse occurred at the Company's Concord,
California water park, resulting in the park's closure for a period of twelve
days. The park re-opened with the approval of the City of Concord on June 14,
1997. Although the collapse and the resulting closure have had, and are expected
to continue to have, an adverse impact on that park's operating performance for
1997, the performance of the Company's other parks have more than compensated
for this park's lesser contribution. The Company also expects to recover
under its business interruption insurance for all or a substantial part of this
shortfall. In addition, the Company believes that its liability insurance
coverage should be more than adequate to provide for any personal injury
liability which may ultimately be found to exist in connection with the
collapse.
<PAGE>
PART II - OTHER INFORMATION
- -----------------------------
ITEMS I-3 AND 5
Not applicable
ITEM 4 Submission of Matters to a Vote of Securityholders
On June 11, 1997, the Company held its Annual Meeting of Stockholders.
The number of shares of Common Stock represented at the Meeting either in person
or by proxy, was 15,769,448 shares (86% of the outstanding shares of Common
Stock). Three proposals were voted upon at the Meeting. The proposals and the
voting results were as follows:
1. Proposal 1. - Election of Directors
The following persons were elected as directors as follows:
<TABLE>
<CAPTION>
NAME FOR AGAINST WITHHELD
<S> <C> <C> <C>
Paul A. Biddleman 15,767,627 1801 20
Kieran E. Burke 15,767,647 1801 0
James F. Dannhauser 15,767,587 1831 30
Michael E. Gellert 15,767,667 1701 80
Arnold S. Gurtler 15,767,287 1801 360
Gary Story 15,767,617 1801 30
Jack Tyrell 15,767,612 1801 35
Charles R. Wood 15,767,352 1841 255
</TABLE>
2. Proposal 2. - Approval of amendment to Certificate of
Incorporation of the Company to increase the number of
authorized shares of the Company's Common Stock from 30,000,000
to 90,000,000 shares.
FOR AGAINST WITHHELD
12,942,769 2,720,949 105,730
3. Proposal 3. - Ratification of KPMG Peat Marwick LLP as the
Company's independent public accountants for the year ended
December 31, 1997.
FOR AGAINST WITHHELD
15,765,965 877 2,606
ITEM 6 Exhibits and Reports on Form 8-K.
EXHIBITS
27. Financial Data Schedule
<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
August 6, 1997 /s/ James F. Dannhauser
- ---------------------- -----------------------------
Date James F. Dannhauser
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 164,733
<SECURITIES> 0
<RECEIVABLES> 11,293
<ALLOWANCES> 0
<INVENTORY> 8,820
<CURRENT-ASSETS> 189,450
<PP&E> 366,492
<DEPRECIATION> 25,146
<TOTAL-ASSETS> 589,721
<CURRENT-LIABILITIES> 43,957
<BONDS> 218,146
0
0
<COMMON> 917
<OTHER-SE> 299,337
<TOTAL-LIABILITY-AND-EQUITY> 589,721
<SALES> 66,732
<TOTAL-REVENUES> 66,732
<CGS> 6,532
<TOTAL-COSTS> 6,532
<OTHER-EXPENSES> 32,617
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,374
<INCOME-PRETAX> (6,854)
<INCOME-TAX> (2,810)
<INCOME-CONTINUING> (4,044)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,044)
<EPS-PRIMARY> (0.24)
<EPS-DILUTED> (0.24)
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