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, 1997
CENTURY PARK PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-14247 41-1458152
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(State of Incorporation) (Commission File Number) (IRS ID Number)
4701 IDS Center, Minneapolis, Minnesota 55402
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (612) 333-5100
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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, 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 December 31, 1997 compared to Period Ended December 31, 1996.
Admissions revenues, all of which were generated by the Company's wholly owned
subsidiary International Theatres Corporation (ITC), were $1,335,998 for the
quarter ended December 31, 1997, compared to $1,111,945 for the comparable prior
year period. The approximate $224,000 increase in ITC's current period
admissions revenues was primarily attributable to increased ticket prices and
increased attendance.
ITC's food, beverage and merchandise sales were $1,190,412 for the quarter ended
December 31, 1997, compared to $1,053,156 for the comparable prior year period,
and their related cost of sales were $350,617 and $302,199, respectively. The
approximate $137,300 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 December 31, 1997, were
$1,840,287, compared to $1,643,905 for the comparable prior year period,
representing an approximate increase of $196,400. The increase in the current
year was primarily due to increased attendance.
General and administrative expenses were $312,731 for the quarter ended December
31, 1997, compared to $278,470 for the comparable prior year period. The
approximate increase of $34,200 in general and administrative expenses was
primarily due to increased overhead expenditures relative to ITC.
<PAGE>
LIQUIDITY AND SOURCES OF CAPITAL
Cash from operating activities for the quarter ended December 31, 1997, was
$305,554 compared to $139,121 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
quarter ended December 31, 1997, was $(68,435), which was primarily comprised of
purchases of equipment. Cash from (used in) financing activities for the quarter
ended December 31, 1997, was $(72,841), which was comprised of reductions of
notes payable and long-term capitalized lease obligations, offset by advances
from officer.
At December 31, 1997, the Company had a working capital deficit of ($2,983,902)
and cash of $195,098. The working capital deficit at December 31, 1997, was
primarily comprised of notes payable of $400,000, accounts payable and accrued
expenses of $1499,825, and deferred revenues of $1,584,288. 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 December
31, 1997 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
<PAGE>
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, 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
December 31, 1997 and September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Decenber 31, September 30,
ASSETS 1997 1997
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<S> <C> <C>
CURRENT ASSETS
Cash $ 195,098 $ 30,820
Accounts receivable 272,774 45,675
Inventories 48,508 42,256
Deferred show costs 42,016 21,717
Due from unconsolidated subsidiary -- 1,918
Prepaid expenses 141,815 80,830
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Total current assets 700,211 223,216
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PROPERTY AND EQUIPMENT, at cost
Leasehold interest in building 1,000,000 1,000,000
Equipment 586,231 517,796
Furniture and fixtures 450,478 450,478
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2,036,709 1,968,274
Less accumulated depreciation 1,387,219 1,291,285
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649,490 676,989
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INTANGIBLES
Cost in excess of net assets acquired, net of amortization 405,493 411,052
Investment in unconsolidated subsidiary -- 709
----------- -----------
405,493 411,761
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$ 1,755,194 $ 1,311,966
=========== ===========
LIABILIITES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 400,000 $ 450,000
Current maturities of capitalized lease obligations 200,000 214,826
Accounts payable 771,396 864,353
Deferred revenue 1,584,288 1,074,006
Accrued compensation 261,250 371,016
Accrued expenses 467,179 247,855
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Total current liabilities 3,684,113 3,222,056
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LONG-TERM CAPITALIZED LEASE OBLIGATIONS 137,122 161,537
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STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share; authorized
200,000,000 shares; issued and outstanding 9,886,641 shares; 9,887 9,887
Additional paid in capital 4,847,471 4,831,071
Accumulated deficit (6,923,399) (6,912,585)
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(2,066,041) (2,071,627)
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$ 1,755,194 $ 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 Periods Ended December 31, 1997 and 1996
(Unaudited)
Three-Month Periods
1997 1996
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Revenues
Admissions revenue $ 1,335,998 $ 1,111,945
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Food, beverage and merchandise sales 1,190,412 1,053,156
Cost of Food, beverage and merchandise sales 350,617 302,199
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Gross profit 839,795 750,957
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Net revenues 2,175,793 1,862,902
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Operating Costs and Expenses
Operating costs 1,840,287 1,643,905
General and administration 312,731 278,470
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Total operating costs and expenses 2,153,018 1,922,375
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Operating income (loss) 22,775 (59,473)
Other, primarily interest expense (29,661) (55,151)
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Loss before equity in income (loss) of WBPI
and income taxes (6,886) (114,624)
Equity in income (loss) of WBPI (2,627) (10,421)
----------- -----------
Loss before income taxes (9,513) (125,045)
Income taxes 1,301 501
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Net loss $ (10,814) $ (125,546)
=========== ===========
Net loss per share of common stock $ (0.00) $ (0.01)
=========== ===========
Weighted average number of common shares 9,886,641 9,886,641
=========== ===========
See Notes to Consolidated Financial Statements.
F-2
<PAGE>
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three-Month Periods Ended December 31, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (10,814) $(125,546)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 101,493 90,458
Equity in (income) loss of WBPI 2,627 10,421
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable (227,099) (50,815)
Inventories (6,252) (10,351)
Deferred show costs (20,299) (34,121)
Prepaid expenses (60,985) (57,254)
Increase (Decrease) in-
Accounts payable and accrued expenses 16,601 2,567
Deferred revenue 510,282 313,762
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Net cash from operating activities 305,554 139,121
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CASH FLOWS FROM INVESTING ACTIVITIES
Increase in due from related parties -- 1,918
Purchase of property and equipment (68,435) (10,090)
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Net cash from (used in) investing activities (68,435) (8,172)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Officer advances reported as paid in capital 16,400 --
Increase (decrease) in notes payable (50,000) (50,000)
Reduction of long-term capitalized lease obligations (39,241) (58,263)
--------- ---------
Net cash from (used in) financing activities (72,841) (108,263)
--------- ---------
Net increase in cash 164,278 22,686
Cash, beginning of period 30,820 29,200
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Cash, end of period $ 195,098 $ 51,886
========= =========
</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 December 31, 1997, the company owed the Company's CEO $853,866 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> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 195,098
<SECURITIES> 0
<RECEIVABLES> 272,774
<ALLOWANCES> 0
<INVENTORY> 48,508
<CURRENT-ASSETS> 700,211
<PP&E> 2,036,709
<DEPRECIATION> 1,387,219
<TOTAL-ASSETS> 1,755,194
<CURRENT-LIABILITIES> 3,684,113
<BONDS> 0
0
0
<COMMON> 9,887
<OTHER-SE> 4,847,471
<TOTAL-LIABILITY-AND-EQUITY> 1,755,194
<SALES> 1,190,412
<TOTAL-REVENUES> 2,175,793
<CGS> 0
<TOTAL-COSTS> 1,840,287
<OTHER-EXPENSES> 312,731
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,661
<INCOME-PRETAX> (9,513)
<INCOME-TAX> 1,301
<INCOME-CONTINUING> (10,814)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,814)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
