<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
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OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-13740
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Jillian's Entertainment Corporation
-----------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-2334472
- ------------------------ -------------------------
(State or other Jurisdic- (I.R.S. Employer Identif-
tion of Incorporation) ication Number)
One Alhambra Plaza, Suite 620 Coral Gables, FL 33134
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(Address of Principal Executive Offices) (Zip Code)
(305) 446-0023
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(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 for 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
9,137,798 shares of common stock, $.001 par value as of August 11, 1995
Total number of pages contained in this document: 10
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<TABLE>
JILLIAN'S ENTERTAINMENT CORPORATION AND SUBSIDIARIES
Index
<CAPTION>
Part I. Financial Information Page No.
- --------------------------------------- --------
<S> <C> <C> <C>
Item 1. Consolidated Condensed Balance Sheets as of
June 30, 1995 and March 31, 1995 3
Consolidated Condensed Statements of Operations
for the Three Month Periods ended June 30,
1995 and 1994 4
Consolidated Condensed Statements of Cash Flows
for the Three Month Periods ended June 30,
1995 and 1994 5
Notes to Consolidated Condensed Financial Statements
for the Three Month Period ended June 30, 1995 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7
Part II Other Information
- -----------------------------------
Item 6. Exhibits and Reports on Form 8-K 9
</TABLE>
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<TABLE>
JILLIAN'S ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
June 30, March 31,
1995 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 392,147 $ 564,120
Restricted cash 115,354 690,000
Inventory 175,509 155,567
Accounts receivable 31,429 33,688
Other current assets 201,274 263,910
----------- -----------
Total current assets 915,713 1,707,285
Investments, net 39,725 39,725
Property and equipment, net 5,449,634 4,988,624
Goodwill, net 845,323 858,636
Other assets 264,059 253,202
----------- -----------
Total assets $ 7,514,454 $ 7,847,472
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 645,784 $ 683,028
Accrued expenses and other liabilities 559,738 564,584
Current portion of notes and equipment
leases payable 506,380 484,158
----------- -----------
Total current liabilities 1,711,902 1,731,770
Notes and equipment leases payable 1,355,524 1,568,171
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Total liabilities 3,067,426 3,299,941
----------- -----------
Minority interest 1,423,033 1,435,785
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Stockholders' equity:
Cumulative preferred stock, $.001 par
value, 1,000,000 shares authorized, none
issued or outstanding - -
Common stock, $.001 par value,
25,000,000 shares authorized, 9,137,798
shares issued and outstanding on
June 30, 1995 and March 31, 1995 9,138 9,138
Paid-in capital 9,513,277 9,513,277
Accumulated deficit (6,498,420) (6,307,256)
----------- -----------
Total 3,023,995 3,215,159
Notes receivable from stockholders - (103,413)
----------- -----------
Total stockholders' equity 3,023,995 3,111,746
----------- -----------
Total liabilities and stockholders'
equity $ 7,514,454 $ 7,847,472
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 4
<TABLE>
JILLIAN'S ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Month Period
Ended June 30,
1995 1994
---------- ----------
<S> <C> <C>
Revenues from clubs $2,461,662 $1,598,081
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Cost and expenses:
Cost of club operations:
Cost of food and beverage 599,743 356,293
Wages 577,730 385,528
Rent 387,540 281,998
Direct operating expenses 539,418 343,003
Start-up costs related to
development stage clubs 57,976 126,955
General and administrative expenses 294,970 161,689
Depreciation and amortization 143,548 113,642
Minority interest 19,384 28,540
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Total cost and expense 2,620,309 1,797,648
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Other income/(expenses):
Gain on sale of investment - 4,785
Other income, primarily interest 12,701 12,060
Interest expense (45,218) (15,120)
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Total other income/(expenses) (32,517) 1,725
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Net loss $ (191,164) $ (197,842)
========== ==========
Net loss per share of common and common
equivalents $ (0.02) $ (0.02)
========== ==========
Weighted average common and common
equivalent shares outstanding 9,137,798 8,032,798
========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 5
<TABLE>
JILLIAN'S ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Month Period
Ended June 30,
1995 1994
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (191,164) $ (197,842)
------------ -----------
Adjustments to reconcile loss to net
cash used by continuing operations:
Depreciation and amortization 143,548 113,642
Gain on sale of investment - (4,785)
Decrease in accounts receivables 2,259 6,986
(Increase)/decrease in inventory (19,942) 5,813
Decrease/(increase) in other assets 44,707 (65,051)
Decrease in accounts payable (37,244) (77,713)
(Decrease)/increase in other liabilities (4,846) 53,226
Decrease in minority interest 19,384 28,540
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Total adjustments 147,866 60,658
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Cash used by operating activities (43,298) (137,184)
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Cash flows from investing activities:
Purchases of property and equipment (584,173) (255,145)
Collections of notes receivable 103,413 6,667
Proceeds from sale of stock - 14,470
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Cash used in investing activities (480,760) (234,008)
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Cash flows from financing activities:
(Repayment)/issuance of notes and
leases payables (190,425) 135,120
Distributions to minority interest shareholders (32,136) (44,566)
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Cash (used by)/provided by financing activities (222,561) 90,554
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Net decrease in cash (746,619) (280,638)
Cash and cash equivalents at beginning of year 1,254,120 1,129,561
------------ -----------
Cash and cash equivalents at end of period $ 507,501 $ 848,923
============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements
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<PAGE> 6
JILLIAN'S ENTERTAINMENT CORPORATION AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
June 30, 1995
-------------
Note A - General
- ------------------
The unaudited consolidated financial statements include the accounts of
Jillian's Entertainment Corporation (the "Registrant"), Jillian's, Inc. and its
subsidiaries. All significant intercompany accounts and transactions have been
eliminated.
Net loss per share amounts are computed based upon the average number of
common and common equivalent shares outstanding, assuming proceeds from the
assumed exercise of options and warrants were used to purchase common shares
outstanding at the average fair market value during each period, unless such
exercise is anti-dilutive.
The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with the instructions for Form 10-QSB and therefore
do not include all information and footnotes necessary for a fair presentation
of financial position, results of operations and changes in cash flow in
conformity with generally accepted accounting principles. The unaudited
consolidated condensed financial statements should be read in conjunction with
the financial statements and related notes included in the Registrant's Annual
Report on Form 10-KSB for the year ended March 31, 1995. In the opinion of
management, the unaudited consolidated condensed financial statements contain
all adjustments necessary for a fair presentation of the results of operations
for the interim periods presented and all such adjustments are of a normal and
recurring nature. The results of operations for the three months ended June
30, 1995 are not necessarily indicative of the results which may be expected
for the entire fiscal year.
Certain amounts in the accompanying condensed consolidated financial
statements for the three months ended June 30, 1994 have been reclassified to
conform to the presentation in the three months ended June 30, 1995.
Note B - Development Stage Club
- -------------------------------
On December 21, 1994, the Registrant, through a Delaware corporation that is
wholly-owned by the Registrant, entered into a lease to operate a Jillian's
billiard club in Tacoma, Washington. The property is located near the
University of Puget Sound. The Registrant anticipates that this club will open
in the fourth quarter of calendar 1995. The club will contain approximately
25,000 square feet of space on two floors and approximately 20 Brunswick
billiard tables, along with other table-top games, dart boards and a game room.
The estimated cost of building out and equipping the club is approximately
$1,600,000. The Tacoma club is being primarily finance by a $660,000 landlord
contribution, equipment financing, and cash generated from the Registrant's
club operations. The Registrant is likely to raise funds for this purpose
through bank financing or other sources.
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<PAGE> 7
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations
June 30, 1995
-------------------------------
Results of Operations
- ---------------------
The Registrant had net losses of $191,164 and $197,842 for the quarters
ended June 30, 1995 and 1994, respectively. The slight decrease in net
losses from 1994 to 1995 was primarily due to higher net club operating income
of $125,972 and a reduction in startup costs related to development stage clubs
of $68,979 offset in part by increased general and administrative expenses,
depreciation and amortization and interest expense.
Total revenues were $2,461,662 and $1,598,081 for the quarters ended June
30, 1995 and 1994, respectively. The increase of $863,581 was primarily due to
increased revenues of $811,409 from the Champaign, Annapolis and Long Beach
clubs, which opened on August 19, 1994, October 24, 1994 and May 5, 1995,
respectively.
Total costs and expenses were $2,620,309 and $1,797,648 for the quarters
ended June 30, 1995 and 1994, respectively. The increase in total expenses of
$822,661 was primarily due to increased costs of $756,591 associated with
Champaign, Annapolis and Long Beach clubs and increased general and
administrative expenses. The Registrant had general and administrative
expenses of $294,970 and $161,689 for the three month period ended June 30,
1995 and 1994, respectively. The increase in general and administrative
expenses was primarily due to increased wages, professional services, and
travel of approximately $42,000, $71,000 and $22,000, respectively. The
increase in wages and travel from 1994 to 1995 was primarily attributed to the
hiring of a new President and Chief Operating Officer and a new Controller.
The increase in professional fees was primarily due to various consulting and
legal fees.
Interest expense was $45,218 and $15,120 for the quarter ended June 30,
1995 and 1994, respectively. The increase was primarily due to debt
associated with Champaign, Annapolis and Long Beach clubs.
Liquidity and Capital Resources
- -------------------------------
The Registrant's cash and cash equivalents and restricted cash decreased
$746,619 during the three month period ended June 30, 1995. The primary reason
for the decrease was the construction costs related to the Long Beach club and
the repayment of certain indebtedness, of approximately $544,000 and $159,000,
respectively.
The Registrant estimates that the total cost of building out and equipping
the Long Beach club will be $1,500,000. The Long Beach club was financed
primarily by a $250,000 landlord contribution, a $450,000 eleven-year loan from
the City of Long Beach, equipment financing and cash generated from the
Registrant's club operations.
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<PAGE> 8
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations
June 30, 1995, Continued
-------------------------------
The Registrant estimates that the total cost of the Tacoma club, which
currently is under development and is expected to open for business in the
fourth quarter of calendar 1995, will be approximately $1,600,000. The Tacoma
club is being financed primarily by a $660,000 landlord contribution, equipment
financing and cash generated from the Registrant's clubs operations. The
Registrant is likely to raise funds for this purpose through bank financing or
other sources.
The Registrant had nine clubs fully operational as of June 30, 1995 as
compared to six clubs as of June 30, 1994. Net club operating income was
$357,231 and $231,259 for the three month period ended June 30, 1995 and 1994,
respectively.
The Registrant anticipates that its cash on hand at June 30, 1995, cash
generated from club operations, and other financing sources should be adequate
to complete the Tacoma club and to fund the Registrant's future working capital
needs.
The Registrant, as of June 30, 1995, has recorded goodwill of $845,323, net
of amortization. The Registrant reviews at each balance sheet date the value
of the goodwill for impairment. The valuation is principally based on the
profitability of the clubs and the ongoing value of the Jillian's concept.
Based on its most recent evaluation, the Registrant does not believe goodwill
has been impaired.
The Registrant intends to develop, through wholly owned subsidiaries of
Jillian's, Inc., additional Jillian's clubs. These clubs may be owned by
Jillian's, Inc. subsidiaries directly or indirectly through their participation
in limited partnerships or joint ventures. In the case of clubs owned by
limited partnerships, the Registrant expects that in each case a wholly owned
subsidiary would be the general partner, own a substantial interest in the
limited partnership and receive a management fee. The Registrant currently is
investigating potential sites for clubs in Arizona, Florida, Massachusetts, and
certain other areas in the Midwest and Mid-Atlantic states. There can be no
assurance that the Registrant will be successful in developing additional
billiard clubs.
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<PAGE> 9
Part II
Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
--------
None
(b) Reports on Form 8-K
-------------------
None
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<PAGE> 10
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 hereunto duly authorized.
JILLIAN'S ENTERTAINMENT CORPORATION
(Registrant)
By: /s/ Richard F. Landry
-------------------------------------
Richard F. Landry
Vice President of Finance, Treasurer,
Secretary and Principal Accounting Officer
Dated: August 11, 1995
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JILLIAN'S ENTERTAINMENT
CORPORATION FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 507,501
<SECURITIES> 0
<RECEIVABLES> 31,429
<ALLOWANCES> 0
<INVENTORY> 175,509
<CURRENT-ASSETS> 915,713
<PP&E> 6,683,755
<DEPRECIATION> (1,234,121)
<TOTAL-ASSETS> 7,514,454
<CURRENT-LIABILITIES> 1,711,902
<BONDS> 1,355,524
<COMMON> 9,138
0
0
<OTHER-SE> 3,014,857
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 2,461,662
<CGS> 599,743
<TOTAL-COSTS> 2,620,309
<OTHER-EXPENSES> 32,517
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 45,218
<INCOME-PRETAX> (191,164)
<INCOME-TAX> 0
<INCOME-CONTINUING> (191,164)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (191,164)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
<FN>
Paid-in Capital 9,513,277
Accumulated Deficit (6,498,420)
</TABLE>
