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 March 31, 1998
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 March 31, 1998, 9,886,641 common shares, $.001 par value, were
outstanding.
<PAGE>
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 March 31, 1998 compared to Period Ended March 31, 1997.
Admissions revenues, all of which were generated by the Company's wholly owned
subsidiary International Theatres Corporation (ITC), were $1,179,758 for the
quarter ended March 31, 1998, compared to $937,088 for the comparable prior year
period. The approximate $242,700 increase in ITC's current period admissions
revenues was primarily attributable to increased attendance and increased ticket
prices.
ITC's food, beverage and merchandise sales were $900,640 for the quarter ended
March 31, 1998, compared to $796,919 for the comparable prior year period, and
their related cost of sales were $272,793 and $237,625, respectively. The
approximate $103,700 increase in current period sales was due primarily to
increased attendance and increased prices. The cost of sales, as a percent of
food, beverage and merchandise sales, was comparable for both periods.
ITC's operating expenses for the quarter ended March 31, 1998, were $1,640,661,
compared to $1,495,624 for the comparable prior year period, representing an
approximate increase of $145,000. The increase in the current year was primarily
due to increased attendance.
General and administrative expenses were $246,520 for the quarter ended March
31, 1998, which were very comparable to the $247,095 for the comparable prior
year period.
<PAGE>
LIQUIDITY AND SOURCES OF CAPITAL
Cash from operating activities for the six-month period ended March 31, 1998,
was $286,599 compared to $138,145 for the comparable prior year period. 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 provided from (used in) investing activities
for the six-month period ended March 31, 1998, was $(100,038), which was
primarily comprised of purchases of equipment. Cash from (used in) financing
activities for the six-month period ended March 31, 1998, was $(126,403), which
was comprised of reductions of notes payable and long-term capitalized lease
obligations, offset by advances from officer.
At March 31, 1998, the Company had a working capital deficit of ($3,074,970) and
cash of $90,978. The working capital deficit at March 31, 1998, was primarily
comprised of notes payable of $400,000, accounts payable and accrued expenses of
$1,447,232, and deferred revenues of $1,701,770. Approximately $340,000 of the
accounts payable and accrued expenses relate to The Pike. Management believes
that a significant portion of these obligations would be discharged upon
liquidation as discussed below. The deferred revenues relate 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.
The Company had no material commitments for capital expenditures as of March 31,
1998 and capital expenditures for the remainder of fiscal 1998 are expected to
be immaterial.
Management believes that advance ticket sales and advance bookings are
indicative that ITC's anticipated results will provide sufficient funds to
sustain their operations for the remainder of fiscal 1998.
During the quarter ended March 31, 1996, the Company finalized the acquisition
of an arena football franchise under a lease with an option to purchase the
franchise. During fiscal year 1996 such franchise was operated through a wholly
owned subsidiary, Minnesota Arena Football, Inc. (The Pike).
During the third and fourth fiscal quarters of fiscal year 1996, The Pike failed
to generate the anticipated cash flow. Consequently, during such quarters the
Company's CEO advanced approximately $206,000 and the Company raised additional
financing from outside sources of approximately $400,000. The financing raised
from outside sources is currently payable, and is secured by the common stock of
Minnesota Arena Football, Inc. Management anticipates such financing will be
converted into the Company's common stock. However, there are no assurances that
such financing will be converted into the Company's common stock. Throughout
much of the third and fourth fiscal quarters of fiscal 1996, management
attempted to sell its interest in the arena football franchise.
<PAGE>
Failing to do so, the option expired. Accordingly, The Pike has ceased
operations. Management is evaluating the appropriate course of action for The
Pike, which will most likely be liquidated either in or out of bankruptcy court.
The Company's independent auditors issued their opinion on the consolidated
financial statements as of September 30, 1997, wherein they added an additional
paragraph which raised substantial doubt as to the Company's ability to continue
as a going concern. Management believes its current cash position will be
sufficient to satisfy working capital requirements for fiscal 1998, and to fund
costs relative to investigating potential acquisitions. ITC has a line of credit
providing for available funds of $50,000. Management believes ITC will operate
at a profitable level that, along with ITC's available line of credit, will
provide sufficient funds to satisfy ITC's working capital requirements for
fiscal 1998. However, there can be no assurances that anticipated cash flow from
ITC's operations will be achieved.
<PAGE>
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 July 29, 1998.
CENTURY PARK PICTURES CORPORATION
By: /s/ Thomas K. Scallen
Thomas K. Scallen
Chief Executive Officer
<PAGE>
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
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
ASSETS March 31, September 30,
1998 1997
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 90,978 $ 30,820
Accounts receivable 243,509 45,675
Inventories 50,066 42,256
Deferred show costs 125,696 21,717
Due from unconsolidated subsidiary -- 1,918
Prepaid expenses 163,783 80,830
----------- -----------
Total current assets 674,032 223,216
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Leasehold interest in building 1,000,000 1,000,000
Equipment 617,834 517,796
Furniture and fixtures 450,478 450,478
----------- -----------
2,068,312 1,968,274
Less accumulated depreciation 1,482,211 1,291,285
----------- -----------
586,101 676,989
----------- -----------
INTANGIBLES
Cost in excess of net assets acquired, net of amortization 399,934 411,052
Investment in unconsolidated subsidiary -- 709
----------- -----------
399,934 411,761
----------- -----------
$ 1,660,067 $ 1,311,966
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 400,000 $ 450,000
Current maturities of capitalized lease obligations 200,000 214,826
Accounts payable 647,953 864,353
Deferred revenue 1,701,770 1,074,006
Accrued compensation 291,000 371,016
Accrued expenses 508,279 247,855
----------- -----------
Total current liabilities 3,749,002 3,222,056
----------- -----------
LONG-TERM CAPITALIZED LEASE OBLIGATIONS 83,060 161,537
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share; authorized
200,000,000 shares; issued and outstanding 9,886,641 shares; 9,887 9,887
Additional paid in capital 4,847,971 4,831,071
Accumulated deficit (7,029,853) (6,912,585)
----------- -----------
(2,171,995) (2,071,627)
----------- -----------
$ 1,660,067 $ 1,311,966
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
F-1
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three-Month and Six-Month Periods Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three-Month Periods Six-Month Periods
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Admissions revenue $ 1,179,758 $ 937,088 $ 2,515,756 $ 2,049,033
----------- ----------- ----------- -----------
Food, beverage and merchandise sales 900,640 796,919 2,091,052 1,850,075
Cost of Food, beverage and merchandise sales 272,793 237,625 623,410 539,824
----------- ----------- ----------- -----------
Gross profit 627,847 559,294 1,467,642 1,310,251
----------- ----------- ----------- -----------
Net revenues 1,807,605 1,496,382 3,983,398 3,359,284
----------- ----------- ----------- -----------
Operating Costs and Expenses
Operating costs 1,640,661 1,495,624 3,480,948 3,139,529
General and administration 246,520 247,095 559,251 525,565
----------- ----------- ----------- -----------
Total operating costs and expenses 1,887,181 1,742,719 4,040,199 3,665,094
----------- ----------- ----------- -----------
Operating loss (79,576) (246,337) (56,801) (305,810)
Other, primarily interest expense (26,377) (31,958) (56,038) (87,109)
----------- ----------- ----------- -----------
Loss before equity in income (loss) of WBPI
and income taxes (105,953) (278,295) (112,839) (392,919)
Equity in income (loss) of WBPI -- (10,421) (2,627) (20,842)
----------- ----------- ----------- -----------
Loss before income taxes (105,953) (288,716) (115,466) (413,761)
Income taxes 501 501 1,802 1,002
----------- ----------- ----------- -----------
Net loss $ (106,454) $ (289,217) $ (117,268) $ (414,763)
=========== =========== =========== ===========
Net loss per share of common stock $ (0.01) $ (0.03) $ (0.01) $ (0.04)
=========== =========== =========== ===========
Weighted average number of common shares 9,886,641 9,886,641 9,886,641 9,886,641
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six-Month Periods Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(117,268) $(414,763)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 202,044 180,916
Equity in (income) loss of WBPI 2,627 20,842
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable (197,834) (36,424)
Inventories (7,810) 4,391
Deferred show costs (103,979) (120,203)
Prepaid expenses (82,953) (55,651)
Increase (Decrease) in-
Accounts payable and accrued expenses (35,992) 104,177
Deferred revenue 627,764 454,860
--------- ---------
Net cash from operating activities 286,599 138,145
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Increase in due from related parties -- 1,918
Purchase of property and equipment (100,038) (10,090)
--------- ---------
Net cash from (used in) investing activities (100,038) (8,172)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Officer advances reported as paid in capital 16,900 --
Increase (decrease) in notes payable (50,000) --
Reduction of long-term capitalized lease obligations (93,303) (103,847)
--------- ---------
Net cash from (used in) financing activities (126,403) (103,847)
--------- ---------
Net increase in cash 60,158 26,126
Cash, beginning of period 30,820 29,200
--------- ---------
Cash, end of period $ 90,978 $ 55,326
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
F-3
<PAGE>
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. Officer Advances Included In Additional Paid In Capital:
At March 31, 1998, the company owed the Company's CEO $854,366 for short-term
advances provided to the Company. Such amount is required to be reported as
additional paid in capital. The advances contain specific repayment provisions
and when repayment occurs, there will be a reduction of additional paid in
capital. The advances are secured by the Company's shares of stock in ITC.
F-4
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 90,978
<SECURITIES> 0
<RECEIVABLES> 243,509
<ALLOWANCES> 0
<INVENTORY> 50,066
<CURRENT-ASSETS> 674,032
<PP&E> 2,068,312
<DEPRECIATION> 1,482,211
<TOTAL-ASSETS> 1,660,067
<CURRENT-LIABILITIES> 3,749,002
<BONDS> 0
9,887
0
<COMMON> 0
<OTHER-SE> 4,847,971
<TOTAL-LIABILITY-AND-EQUITY> 1,660,067
<SALES> 2,091,052
<TOTAL-REVENUES> 3,983,398
<CGS> 0
<TOTAL-COSTS> 3,480,948
<OTHER-EXPENSES> 559,251
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56,038
<INCOME-PRETAX> (115,466)
<INCOME-TAX> 1,802
<INCOME-CONTINUING> (117,268)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (117,268)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
