CONFORMED COPY
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For Quarter ended December 31, 1995
CENTURY PARK PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-14247 41-1458152
(State of Incorporation) (Commission File Number) (IRS ID Number)
4701 IDS Center, Minneapolis, Minnesota 55402
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (612) 333-5100
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 twelve (12) months and (2) has been subject to such filing
requirements for the past ninety (90) days. _x_ Yes ___ No
As at December 31, 1995, 9,859,541 common shares, $.001 par value, were
outstanding.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
This information is included following "Index to Consolidated Financial
Statements".
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OPERATIONS
Period Ended December 31, 1995 compared to Period Ended December 31, 1994.
The Company's wholly owned subsidiary International Theatres Corporation's
(ITC's) admissions revenues were $1,057,505 for the quarter ended December 31,
1995, compared to $1,221,112 for the quarter ended December 31, 1994. The
$163,607 decrease in current period admissions revenues was primarily
attributable to decreased attendance, and increased promotional and discounted
tickets, offset in part by increased ticket prices.
ITC's food, beverage and merchandise sales were $1,089,208 for the quarter ended
December 31, 1995, compared to $1,098,287 for the comparable prior year period,
and their related cost of sales were $312,556 and $321,909, respectively. The
$9,079 decrease in current period sales was due primarily to decreased
attendance, offset in part by increased prices. The cost of sales for both
periods were comparable as a percent of food, beverage and merchandise sales.
ITC's operating expenses for the quarter ended December 31, 1995 were $1,698,434
compared to $1,608,786 for the comparable prior year period, representing an
increase of $89,648. The increase in the current year was primarily due to
increased play mounting costs of approximately $35,000 and increased advertising
costs of approximately $43,000.
General and administrative expenses were $320,677 for the quarter ended December
31, 1995 compared to $316,515 for the comparable prior year period. The increase
in general and administrative expenses was primarily due to increased costs of
investigating potential acquisitions offset in part by cost containment actions
at ITC.
Net loss for the quarter ended December 31, 1995 was ($215,269) compared to a
net income of $47,089 for the comparable prior year period. The decrease was
primarily due to a decline in attendence at ITC.
LIQUIDITY AND SOURCES OF CAPITAL
Cash from (used by) operating activities for the quarter ended December 31, 1995
was ($7,482) compared to $131,819 for the comparable prior year period. The
primary use of cash in operating activities was payment of accounts payable to
ITC's vendors. The primary source of cash from operating activities was deferred
revenue resulting from prepayments by ITC's customers, which represent gift
certificates and tickets paid for in advance. Cash used in investing activities
for the quarter ended December 31, 1995 was $26,317, which was primarily
comprised of purchases of equipment of $72,312, which was offet in part by
decreased amounts due from related parties of $52,504. Cash from financing
activities for the quarter ended December 31, 1995 was $229,685, which was
comprised of the net proceeds from sale of common stock of $305,649 upon
exercise of stock warrants, offset in part by reduction of notes payable and
long-term capitalized lease obligations.
At December 31, 1995, the Company had a working capital deficit of ($1,725,888)
and cash totaling $227,964. The working capital deficit at December 31, 1995 was
primarily comprised of accounts payable of $506,761, and deferred revenues of
$1,259,488 related to advance ticket sales for ITC's operations. Management
believes the incremental cost that ITC will incur to realize these deferred
revenues will be offset by the gross profit from food, beverage and merchandise
sales to such customers.
The Company intends to continue to seek out potential acquisitions. It is
probable that any significant acquisitions would require long-term financing.
However, there are no assurances that the Company will complete any acquisitions
or that it will obtain financing under terms acceptable to the Company.
Management intends to continue to restrict expenditures with respect to the
future development of the Company's entertainment properties and to the
marketing of its completed properties. The Company had no material commitments
for capital expenditures as of December 31, 1995 and capital expenditures for
the remainder of fiscal 1996 are expected to be immaterial.
In September, 1995, the Company's CEO entered into a letter of intent to lease,
with the option to purchase, an arena football franchise, to be located in
Minneapolis, MN. In connection therewith, the CEO advanced funds of
approximately $57,000 to or for the benefit of the lessor, the league and
others. The Company is finalizing the acquisition of the CEO's interest in the
franchise. The definitive lease agreement, the contractual arrangement with an
arena and the consideration, if any, to be paid to the CEO, are in the process
of finalization. If acquired, the franchise will be operated by Minnesota Arena
Football, Inc., a wholly-owned subsidiary of the Company. The Company's exercise
of the option to purchase the franchise will be dependent in any respect on the
reception of this entertainment to the Minnesota consumer.
Management has caused several of ITC's costs to be reduced or eliminated for the
remainder of fiscal 1996, and is currently investigating the decline in
attendence realized during the first quarter. Management believes that advance
ticket sales and advance bookings are indicative that the second quarter's
attendence should return to budgeted levels. Management believes that ITC's
anticipated results for the second quarter will provide sufficient funds to
sustain their operations for the remainder of fiscal 1996.
Management believes its current cash position, including proceeds from exercise
of stock warrants, will be sufficient to satisfy working capital requirements
for fiscal 1996, and to fund costs relative to investigating potential
acquisitions. In February 1996, ITC established a line of credit providing for
available funds of $50,000. Management believes ITC will return to profitability
and that ITC and the arena football franchise, if acquired, along with ITC's
available line of credit, will provide sufficient funds to satisfy their working
capital requirements for fiscal 1996. However, there can be no assurances that
anticipated cash flow from ITC's and the arena football franchise's operations
will be achieved
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
ITEM 2. CHANGES IN SECURITIES.
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE
ITEM 5. OTHER INFORMATION.
NONE
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K.
NONE
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.
Dated as of February 29, 1996.
CENTURY PARK PICTURES CORPORATION
By: /s/Ronald L. Leckelt
Ronald L. Leckelt
Chief Financial Officer
By: /s/Thomas K. Scallen
Thomas K. Scallen
Chief Executive Officer
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Balance Sheets F-1
2. Consolidated Statements of Operations F-2
3. Consolidated Statements of Cash Flows F-3
4. Notes to Consolidated Financial Statements F-4
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS December 31, September 30,
1995 1995
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 227,964 $ 32,078
Accounts receivable 42,626 21,229
Inventories 42,116 41,339
Deferred show costs 78,693 40,350
Due from related parties 7,651 53,358
Prepaid expenses 144,326 82,681
----------- -----------
Total current assets 543,376 271,035
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Leasehold interest in building 1,000,000 1,000,000
Equipment 461,746 455,237
Furniture and fixtures 447,670 447,670
----------- -----------
1,909,416 1,902,907
Less accumulated depreciation 775,898 701,440
----------- -----------
1,133,518 1,201,467
----------- -----------
INTANGIBLES
Cost in excess of net assets acquired, net of amortization 449,501 455,528
Preacquisition costs, net of amortization 108,020 35,708
----------- -----------
557,521 491,236
----------- -----------
$ 2,234,415 $ 1,963,738
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of capitalized lease obligations $ 166,672 $ 173,109
Excess of outstanding checks over bank balance -- 122,659
Due to related parties 20,022 45,588
Accounts payable 506,761 504,118
Deferred revenue 1,259,488 848,612
Accrued compensation 41,289 139,422
Accrued other 275,032 211,498
----------- -----------
Total current liabilities 2,269,264 2,045,006
----------- -----------
LONG-TERM CAPITALIZED LEASE OBLIGATIONS 518,226 562,187
----------- -----------
STOCKHOLDERS' EQUITY
Common stock, par value $.001 per share;
authorized 200,000,000 shares;
issued December 9,859,541 shares
issued September 8,636,952 shares 9,860 8,637
Additional paid in capital 3,986,857 3,682,431
Accumulated deficit (4,549,792) (4,334,523)
----------- -----------
(553,075) (643,455)
----------- -----------
$ 2,234,415 $ 1,963,738
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Revenues
Admissions revenue $ 1,057,505 $ 1,221,112
----------- -----------
Food, beverage and merchandise sales 1,089,208 1,098,287
Cost of Food, beverage and merchandise sales 312,556 321,909
----------- -----------
Gross profit 776,652 776,378
----------- -----------
Net revenues 1,834,157 1,997,490
----------- -----------
Operating Costs and Expenses
Operating costs 1,698,434 1,608,786
General and administration 320,677 316,515
----------- -----------
Total operating costs and expenses 2,019,111 1,925,301
----------- -----------
Operating income (loss) (184,954) 72,189
Other, primarily interest expense (36,611) (25,100)
----------- -----------
Income (loss) before equity in income (loss) of WBPI
and income taxes (221,565) 47,089
Equity in income (loss) of WBPI (Note 2) 6,797 --
----------- -----------
Income (loss) before income taxes (214,768) 47,089
Income taxes 501 --
----------- -----------
Net income (loss) $ (215,269) $ 47,089
=========== ===========
Net income (loss) per share of common stock $ (0.02) $ 0.01
=========== ===========
Weighted average number of common shares 8,769,842 8,636,952
=========== ===========
See Notes to Consolidated Financial Statements.
</TABLE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIODS ENDED DECEMBER 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(215,269) $ 47,089
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 80,485 77,435
Equity in net (income) loss of WBPI (6,797) --
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable (21,397) (22,386)
Inventories (777) (3,050)
Deferred show costs (38,343) (32,698)
Prepaid expenses (61,645) (1,593)
Increase (Decrease) in-
Accounts payable and accrued expenses (154,615) (149,875)
Deferred revenue 410,876 216,897
--------- ---------
Net cash from (used in) operating activities (7,482) 131,819
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for preacquisition costs (72,312) (25,239)
Decrease in due from related parties 52,504 44,670
Purchase of property and equipment (6,509) (12,801)
--------- ---------
Net cash from (used in) investing activities (26,317) 6,630
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock 305,649 --
Increase (decrease) in due to/from related parties (25,566) --
Reduction of long-term capitalized lease obligations (50,398) (32,892)
--------- ---------
Net cash from (used in) financing activities 229,685 (32,892)
--------- ---------
Net increase in cash 195,886 105,557
Cash, beginning of period 32,078 427,160
--------- ---------
Cash, end of period $ 227,964 $ 532,717
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore, do not include
all information and disclosures necessary for a fair presentation of results of
operations, financial position, and consolidated cash flows in conformity with
generally accepted accounting principles. However, such statements do reflect,
in the opinion of management of the Company, all adjustments, consisting of only
normal recurring accruals, necessary for a fair presentation of the results of
operations for these periods.
Note 2. Investment in WBPI
In September, 1995, the Company transferred a portion of its investment in Willy
Bietak Productions, Inc. (WBPI) to Willy Bietak Enterprises, Inc. in
consideration of the guarantees of certain bank debt of WBPI. This resulted in
reducing the Company's ownership in WBPI from 50.1% to 30%. The change in
ownership resulted in a deconsolidation of WBPI. The financial statements for
the quarter ended December 31, 1994 have been restated as if the deconsolidation
occurred as of October 1, 1994.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 227,964
<SECURITIES> 0
<RECEIVABLES> 42,626
<ALLOWANCES> 0
<INVENTORY> 42,116
<CURRENT-ASSETS> 543,376
<PP&E> 1,909,416
<DEPRECIATION> 775,898
<TOTAL-ASSETS> 2,234,415
<CURRENT-LIABILITIES> 2,269,264
<BONDS> 0
0
0
<COMMON> 9,860
<OTHER-SE> 3,986,857
<TOTAL-LIABILITY-AND-EQUITY> 2,234,415
<SALES> 1,057,505
<TOTAL-REVENUES> 1,834,157
<CGS> 0
<TOTAL-COSTS> 1,698,434
<OTHER-EXPENSES> 320,677
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 36,611
<INCOME-PRETAX> (214,768)
<INCOME-TAX> 501
<INCOME-CONTINUING> (215,269)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (215,269)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
