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 June 30, 1997
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 June 30, 1997, 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 June 30, 1997 compared to Period Ended June 30, 1996.
Admissions revenues for the quarter ended June 30, 1997, all of which were
generated by the Company's wholly owned subsidiary International Theatres
Corporation (ITC), were $1,129,799. Admissions revenues for the quarter ended
June 30, 1996 were $1,301,638, of which approximately $1,061,000 were generated
by ITC and approximately $240,600 by the Company's wholly owned subsidiary,
Minnesota Arena Football, Inc. (The Pike). The approximate $69,000 increase in
ITC's current period admissions revenues was primarily attributable to increased
ticket prices, offset in part by decreased attendance and increased promotional
and discounted tickets.
ITC's food, beverage and merchandise sales were $945,377 for the quarter ended
June 30, 1997, compared to $959,900 for the comparable prior year period, and
their related cost of sales were $277,527 and $277,713, respectively. The
approximate $15,000 decrease in current period sales was due primarily to
decreased attendance offset in part by increased prices. The cost of sales, as a
percent of food, beverage and merchandise sales, was comparable for both
periods.
Operating expenses for the quarter ended June 30, 1997, all of which were
generated by ITC, were $1,474,811. Operating expenses for the quarter ended June
30, 1996 were $2,565,762, of which approximately $1,540,000 were generated by
ITC and approximately $1,026,000 by The Pike. The approximate $65,000 decrease
in ITC's operating expenses was primarily due to decreased attendance and play
mounting costs and cost containment actions taken by management.
General and administrative expenses were $289,309 for the quarter ended June 30,
1997, compared to $367,854 for the comparable prior year period. The approximate
decrease of $79,000 in general and administrative expenses was primarily due to
closing The Pike's operations in fiscal year 1996 and to reduced expenditures
relative to potential acquisitions and to cost containment actions taken by
management.
<PAGE>
LIQUIDITY AND SOURCES OF CAPITAL
Cash from (used in) operating activities for the nine-month period ended June
30, 1997, was $159,849 compared to $(655,216) 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 nine-month period ended June 30, 1997, was
$(18,607), which was primarily comprised of purchases of equipment of $20,525.
Cash from (used in) financing activities for the nine-month period ended June
30, 1997, was $(151,114), which was comprised of reductions of notes payable and
long-term capitalized lease obligations.
At June 30, 1997, the Company had a working capital deficit of ($3,286,593) and
cash of $19,328. The working capital deficit at June 30, 1997, was primarily
comprised of notes payable of $400,000, accounts payable and accrued expenses of
$1,443,242, and deferred revenues of $1,427,118. Approximately $330,000 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 June 30,
1997 and capital expenditures for the remainder of fiscal 1997 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 1997.
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
<PAGE>
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. 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, 1996, 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 1997, 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 1997. 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 December 11, 1997.
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
June 30, 1997 and September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, September 30,
1997 1996
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 19,328 $ 29,200
Accounts receivable 206,991 158,496
Inventories 32,323 49,206
Deferred show costs 68,630 4,025
Due from related parties -- 1,918
Prepaid expenses 118,289 74,721
----------- -----------
Total current assets 445,561 317,566
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Leasehold interest in building 1,000,000 1,000,000
Equipment 516,106 495,581
Furniture and fixtures 447,670 447,670
----------- -----------
1,963,776 1,943,251
Less accumulated depreciation 1,215,710 993,680
----------- -----------
748,066 949,571
----------- -----------
INTANGIBLES
Cost in excess of net assets acquired, net of amortization 413,337 431,418
Investment in unconsolidated subsidiary 11,134 42,397
----------- -----------
424,471 473,815
----------- -----------
$ 1,618,098 $ 1,740,952
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 450,000 $ 450,000
Current maturities of capitalized lease obligations 200,000 200,127
Excess of outstanding checks over bank balance -- --
Due to related parties 211,794 18,683
Accounts payable 849,015 931,141
Deferred revenue 1,427,118 1,090,501
Accrued compensation 203,750 236,100
Accrued expenses 390,477 340,753
----------- -----------
Total current liabilities 3,732,154 3,267,305
----------- -----------
LONG-TERM CAPITALIZED LEASE OBLIGATIONS 225,375 376,362
----------- -----------
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 4,573,905 4,573,905
Accumulated deficit (6,923,223) (6,486,507)
----------- -----------
(2,339,431) (1,902,715)
----------- -----------
$ 1,618,098 $ 1,740,952
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three-Month and Nine-Month Periods Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three-Month Periods Nine-Month Periods
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Admissions revenue $ 1,129,799 $ 1,301,638 $ 3,178,832 $ 3,492,631
----------- ----------- ----------- -----------
Food, beverage and merchandise sales 945,377 959,900 2,795,452 3,048,433
Cost of Food, beverage and merchandise sales 277,527 277,713 817,351 878,523
----------- ----------- ----------- -----------
Gross profit 667,850 682,187 1,978,101 2,169,910
----------- ----------- ----------- -----------
Net revenues 1,797,649 1,983,825 5,156,933 5,662,541
----------- ----------- ----------- -----------
Operating Costs and Expenses
Operating costs 1,474,811 2,565,762 4,614,340 5,931,180
General and administration 289,309 367,854 814,874 991,225
----------- ----------- ----------- -----------
Total operating costs and expenses 1,764,120 2,933,616 5,429,214 6,922,405
----------- ----------- ----------- -----------
Operating loss 33,529 (949,791) (272,281) (1,259,864)
Other, primarily interest expense (44,560) (24,439) (131,669) (90,256)
----------- ----------- ----------- -----------
Loss before equity in income (loss) of WBPI
and income taxes (11,031) (974,230) (403,950) (1,350,120)
Equity in income (loss) of WBPI (10,421) 6,204 (31,263) 10,737
----------- ----------- ----------- -----------
Loss before minority interest in loss of subsidiary (21,452) (968,026) (435,213) (1,339,383)
Income taxes 501 501 1,503 1,503
----------- ----------- ----------- -----------
Net loss $ (21,953) $ (968,527) $ (436,716) $(1,340,886)
=========== =========== =========== ===========
Net loss per share of common stock $ (0.00) $ (0.10) $ (0.04) $ (0.14)
=========== =========== =========== ===========
Weighted average number of common shares 9,886,641 9,886,641 9,886,641 9,510,283
=========== =========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine-Month Periods Ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (436,716) $(1,340,886)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 271,374 277,163
Equity in (income) loss of WBPI 31,263 (10,737)
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable (48,495) (109,706)
Inventories 16,883 (7,183)
Deferred show costs (64,605) (35,369)
Prepaid expenses (43,568) (177,666)
Increase (Decrease) in-
Accounts payable and accrued expenses 97,096 317,712
Deferred revenue 336,617 431,456
----------- -----------
Net cash from (used in) operating activities 159,849 (655,216)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for preacquisition costs -- --
Increase in due from related parties 1,918 53,358
Purchase of property and equipment (20,525) (34,776)
----------- -----------
Net cash from (used in) investing activities (18,607) 18,582
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock -- 312,424
Increase (decrease) in notes payable -- 400,000
Increase (decrease) in due to/from related parties -- --
Reduction of long-term capitalized lease obligations (151,114) (130,714)
----------- -----------
Net cash from (used in) financing activities (151,114) 581,710
----------- -----------
Net decrease in cash (9,872) (54,924)
Cash, beginning of period 29,200 32,078
----------- -----------
Cash (deficit), end of period $ 19,328 $ (22,846)
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
<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.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 19,328
<SECURITIES> 0
<RECEIVABLES> 206,991
<ALLOWANCES> 0
<INVENTORY> 32,323
<CURRENT-ASSETS> 445,561
<PP&E> 1,963,776
<DEPRECIATION> 1,215,710
<TOTAL-ASSETS> 1,618,098
<CURRENT-LIABILITIES> 3,732,154
<BONDS> 0
0
0
<COMMON> 9,887
<OTHER-SE> 4,573,905
<TOTAL-LIABILITY-AND-EQUITY> 1,618,098
<SALES> 2,795,452
<TOTAL-REVENUES> 5,156,933
<CGS> 0
<TOTAL-COSTS> 4,614,340
<OTHER-EXPENSES> 814,874
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 131,669
<INCOME-PRETAX> (435,213)
<INCOME-TAX> 1,503
<INCOME-CONTINUING> (436,716)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (436,716)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
