|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended Commission File No.
June 30, 1997 33-19107
- ------------- ----------
LBO Capital Corp.
(Exact name of Registrant as Specified in its Charter)
Colorado 38-2780733
- --------------------------------- -------------------
(State or Other Jurisdiction (IRS Employer
of Incorporation or Organization) Identification No.)
7001 Orchard Lake Road, Suite 424
West Bloomfield MI 48322-3608
- ---------------------------------------- -------------
(Address of Principal Executive Offices) (Zip Code)
(248) 851-5651
(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 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
As of August 8, 1997 a total of 12,100,000 shares, $.0001 par value common
stock, were issued and outstanding.
<PAGE>
LBO CAPITAL CORP.
Form 10-Q Filing of Quarter Ended June 30, 1997
INDEX
Page
Number
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
June 30, 1997 (Unaudited) and December 31, 1996 3
Statements of Operations (Unaudited)
Six months ended June 30, 1997 and 1996 4
Statements of Cash Flows (Unaudited)
Six months ended June 30, 1997 and 1996 5
Notes to Financial Statements (Unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial
Statements (Unaudited) 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 8
Financial Statements of Ajay Sports, Inc.
as of June 30, 1997 9-x
Signature Page x
Note: No other information is included in answer to any item under Part 11
as those other Items are either not applicable, or if applicable, the answer
is negative.
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LBO CAPITAL CORP.
BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1997 1996
-------------------------------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and Equivalents $ 406 $ 78
Marketable Securities - Available for Sale 30,437 28,765
------------ ------------
Total Current Assets 30,843 28,843
Equipment, Net of Accumulated Depreciation
of $8,639 and $8,639 at June 30, 1997 and
December 31, 1996 respectively -0- -0-
Other Assets
Investments -0- -0-
------------ ------------
TOTAL ASSETS $ 30,843 $ 28,843
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable 731 3,703
Accounts Payable - Related Entities 210 960
Notes Payable - Other 506,241 501,791
Accrued Expenses and Taxes 46,666 20,741
------------ ------------
Total Current Liabilities 553,848 527,195
Stockholders' Equity
Common Stock, $.0001 par value;
Authorized 100,000,000 Shares;
Issued and Outstanding 12,100,000 shares 1,210 1,210
Additional Paid-In Capital 623,094 623,094
Unrealized Gain(Loss) on Available for Sale Securities(44,284) (19,632)
Accumulated Deficit (1,103,025) (1,103,024)
------------ ------------
Total Stockholders' Deficit (523,005) (498,352)
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 30,843 $ 28,843
============ ============
</TABLE>
See notes to financial statements.
3
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LBO CAPITAL CORP.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended June 30, For the Six Months Ended June 30,
1997 1996 1997 1996
------------- ----------------- -------------- -------------
<S> <C> <C> <C> <C>
REVENUES: $ -0- $ -0- $ -0- $ -0-
EXPENSES:
Professional Services 1,305 (227) (63) (81)
Management Fees 810 720 1,630 1,950
Interest Expense 13,189 11,007 25,925 21,066
Recovery of Bad Debt (810) -0- (810) -0-
Other Expenses (441) 477 (358) 691
---------- ------------- ----------- -------------
Total Expenses 14,054 11,976 26,325 23,626
---------- ------------- ----------- -------------
Income (Loss) Before Income Taxes (14,054) (11,976) (26,325) (23,626)
Income Tax Expense (Benefit):
Currently Payable -0- -0- -0- -0-
---------- ------------- ----------- -------------
Net Income (Loss) $ (14,054) $ (11,976) $ (26,325) $ (23,626)
========== ============= =========== =============
Net Income (Loss) per Share $ (.00) $ (.00) $ (.00) $ (.00)
========== ============= =========== =============
Weighted Average Number of Common Shares
Outstanding 12,100,000 12,100,000 12,100,000 12,100,000
========== ============= =========== =============
</TABLE>
See notes to financial statements.
4
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
LBO CAPITAL CORP.
CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
June 30, June 30,
1997 1996
--------------- --------------
<S> <C> <C>
Cash Flows for Operating Activities:
Net Loss $ (26,325) $ (23,626)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Changes in Assets and Liabilities:
(Decrease) Increase in:
Accounts Payable (2,972) (3,634)
Accounts Payable - Related Entities (750) 1,950
Accrued Expenses and Taxes 25,925 6,522
----------- -----------
Total Adjustments 22,203 4,838
----------- -----------
Net Cash (Used for) Operations (4,122) (18,788)
Cash (Used for) Investing Activities
Marketable Securities Available for Sale -0- (37,431)
----------- -----------
-0- (37,431)
Cash Flows from Financing Activities:
Proceeds on Notes Payable 4,450 56,300
----------- -----------
Net Cash Provided by Financing Activities 4,450 56,300
----------- -----------
Net Increase (Decrease) in Cash 328 81
Cash and Cash Equivalents:
At Beginning of Period 78 53
----------- -----------
At End of Period $ 406 $ 133
=========== ===========
Supplemental Disclosures of Cash Flow Information:
Interest Paid $ -0- $ 14,544
=========== ===========
</TABLE>
See notes to financial statements.
5
<PAGE>
LBO CAPITAL CORP
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
The accompanying financial statements of LBO Capital Corp. ("the
Company") have been prepared by the Company without audit by independent
accountants, except for the balance sheet at December 31, 1996. In the
opinion of the Company's management, the financial statements reflect all
adjustments necessary to present fairly the Company's financial position at
June 30, 1997 and December 31, 1996, and the results of operations and cash
flows for the six month periods ended June 30, 1997 and 1996.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These unaudited
financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual Report 10-K.
The results for the six-month periods ended June 30, 1997 are not necessarily
indicative of future financial results.
NOTE 2. INVESTMENTS.
As previously reported, the Company had acquired 1,880,000 shares of
the restricted common stock of Ajay Sports, Inc. ("Ajay") in April 1989, for
$182,000. Subsequently, this was reduced to 1,480,000 shares. As a result
of recording the Company's equity in net losses of Ajay, the carrying value
of this investment is zero. The Company also obtained 200,000 warrants of
Ajay at that time. Each warrant entitles the Company to purchase one share
of Ajay common stock at $.34. These warrants expire June 13, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
(a) Material Changes in Financial Condition
Working capital decreased by $24,653 in the six-month period ended June
30, 1997 due to the net loss of $26,325 and an increase in unrealized gain on
investments of $1,672 for the six months ended June 30, 1997.
6
<PAGE>
(b) Results of Operations
Registrant's operations for the six months ended June 30, 1997 resulted
in a loss of $26,325. This was due mainly to interest expense of $25,925 and
management fees of $1,630.
Liquidity and Capital Resources
The Registrant is currently meeting its cash needs from borrowing from
a company. There is no assurance that this will continue in future years.
The Registrant's principal asset is its investment in marketable securities
of Ajay, which it has held for over eight years. These shares are carried at
a zero value on the Registrant's Balance Sheet as a result of recording the
Registrant's equity in net losses of Ajay. The market value of Ajay stock on
June 30, 1996 as listed in the NASDAQ Small-Cap Issues was $0.1880 per
share. The approximate market value of the Registrant's 1,480,000 shares was
$277,500 on that date. The Registrant also owns 15,341 shares of Enercorp,
Inc. common stock. These shares are carried at their fair market value of
$1.50 per share at June 30, 1997, which is $25,384 below cost. These shares
could be liquidated to meet cash flow needs if necessary.
Part II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Pursuant to the provisions of Reg. & 210.3-09 of Regulation S-X, the
Registrant is required to file separate financial statements of its equity
basis investee Ajay, which financial statements for June 30, 1997 are filed
herewith.
(b) Reports on Form 8-K.
None
7
<PAGE>
LBO CAPITAL CORP.
FORM 10-Q
For the Quarter Ended June 30, 1997
Signature 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.
LBO CAPITAL CORP.
(Registrant)
By s\Thomas W. Itin
----------------------------
Thomas W. Itin, President,
Chairman of Board of Directors
By s\Frances B. Bucholz
---------------------------
Frances B. Bucholz, Controller
Date signed: August 14, 1997
8
<PAGE>
AJAY SPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, 1997 December 31,
(Unaudited) 1996
ASSETS
Current assets:
Cash and cash equivalents $ 415 $ 64
Trade accounts receivable, net 7,864 5,274
Inventories 7,005 7,957
Prepaid expenses and other current assets 708 362
Deferred tax benefit 363 363
------ ------
Total current assets 16,355 14,020
Fixed assets, net 1,755 1,822
Other assets 231 320
Deferred tax benefit 756 756
Goodwill 1,687 1,709
------ ------
Total assets $ 20,784 $ 18,627
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to affiliates $ 4,740 $ 885
Notes payable to bank 2,340 6,104
Current portion of capital lease 7 9
Accounts payable 2,894 3,107
Accrued expenses 586 567
------ ------
Total current liabilities 10,567 10,672
Notes payable - long term 7,581 5,196
Long term portion of capital lease 15 17
Stockholders' equity:
Preferred stock, 10,000,000 shares authorized,
Series B, $0.01 par value, 12,500 shares
outstanding at liquidation value 1,250 1,250
Series C, $10.00 par value, 296,170 shares
outstanding at stated value 2,962 2,962
Common stock, $.01 par value 50,000,000 shares
authorized, 23,274,039 shares outstanding 233 233
Additional paid-in capital 9,313 9,313
Accumulated deficit (11,137) (11,016)
------ ------
Total stockholders' equity 2,621 2,742
------ ------
Total liabilities and stockholders' equity $ 20,784 $ 18,627
====== ======
1
<PAGE>
AJAY SPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net sales $ 9,584 $ 8,325 $ 17,185 $ 14,587
Cost of sales 7,965 6,669 14,108 11,802
Gross profit 1,619 1,656 3,077 2,785
Selling, general and 1,294 1,266 2,462 2,458
administrative expenses
Operating income 325 390 615 327
Non-operating expense:
Interest expense, net 438 298 716 577
Other, net 15 3 20 5
Total non-operating expense 453 301 736 582
Income (loss) before income taxes (128) 89 (121) (255)
Income tax expense (benefit) (2) 37 - (80)
Net income (loss) $ (126) $ 52 $ (121) $ (175)
Income (loss) per common share outstanding* $ (.01) $ .00 $ (.01) $ (.01)
Income (loss) per common share & equivalents $ (.01) $ .00 $ (.01) $ (.01)
outstanding**
Weighted average common shares outstanding 23,274 23,190 23,274 23,268
<FN>
* Computed by dividing net income or loss, after reduction for preferred stock dividends, by the weighted average
number of common shares outstanding.
**Computed by dividing net income or loss, after reduction for preferred stock dividends, by the weighted average
number of common share and common share equivalents outstanding.
</FN>
</TABLE>
2
<PAGE>
AJAY SPORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS), (UNAUDITED)
Six Months
Ended June 30,
1997 1996
Cash flows from operating activities:
Net income (loss) $ (121) $ (175)
Adjustments to reconcile net cash flows from
operating activities:
Depreciation and amortization 188 229
Change in assets [(increase)/decrease] and
Liabilities [increase/(decrease)]:
Trade accounts receivable, net (2,590) (1,856)
Inventories 952 448
Prepaid expenses and other current assets (346) (299)
Other assets 89 (179)
Deferred tax benefits - (81)
Accounts payable (213) 260
Accrued expenses 97 (88)
----- -----
Net cash used in
operating activities (1,944) (1,741)
----- -----
Cash flows from investing activities:
Acquisitions of property, plant, equipment (99) (161)
----- -----
Net cash used in
investing activities (99) (161)
----- -----
Cash flows from financing activities:
Net change in bank loan 1,371 2,001
Net change in notes payable to affiliates 1,105 -
Preferred stock conversion - 1
Dividends paid (82) (154)
Net cash provided by
financing activities 2,394 1,848
----- -----
Net increase in cash and cash equivalents 351 (54)
Cash and cash equivalents at beginning of period 64 362
----- -----
Cash and cash equivalents at end of period $ 415 $ 308
===== =====
Supplemental disclosures of cash flow information:
Cash paid for interest $ 656 $ 587
===== =====
Cash paid for income tax - -
===== =====
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000753557
<NAME> LBO Capital Corp.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 406
<SECURITIES> 30,437
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,843
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,843
<CURRENT-LIABILITIES> 553,848
<BONDS> 0
0
0
<COMMON> 1,210
<OTHER-SE> (524,215)
<TOTAL-LIABILITY-AND-EQUITY> 30,843
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 400
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,925
<INCOME-PRETAX> (26,325)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,325)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
|
|