U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-QSB
(Mark One)
_X_ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the quarterly period ended June 30, 1996
__ Transition report under Section 13 or 15(d) of the Exchange Act
For the period from _____ to _____
Commission file number 0-2528
POCONO HOTELS CORPORATION
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 51-0099583
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1209 Orange Street, Wilmington, Delaware 19801
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(Address of Principal Executive Offices)
(302) 658 - 7581
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(Issuer's Telephone Number, Including Area Code)
None
----
(Former Name, Former Address and Former Fiscal Year,
if Changes Since Last Report)
Check whether the issuer:
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the past 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 __
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
9,812 Shares of Common Stock
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<PAGE>
POCONO HOTELS CORPORATION
INDEX
PAGE NO.
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Consolidated Condensed Balance Sheets
June 30, 1996 & December 31, 1995 2
Consolidated Condensed Statements of Loss 3
Six Months Ended June 30, 1996 & 1995
Consolidated Statement of Cash Flows 4
Six Months Ended June 30, 1996 & 1995
Notes to the Consolidated Condensed Financial Statements 5
Management's Discussion and Analysis of the Consolidated
Condensed Statements of Loss 6
Final Exhibits and Reports 7
<PAGE>
POCONO HOTELS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
UNAUDITED
<TABLE>
<CAPTION>
JUNE 30, 1996 DEC. 31, 1995
------------- -------------
<S> <C> <C>
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ (106,433) $ 222,661
ACCOUNTS RECEIVABLE - NET 805,906 432,288
INVENTORIES 157,746 153,011
PREPAID EXPENSES 159,211 255,246
DEFERRED INCOME TAX BENEFIT 0
------------ ------------
TOTAL CURRENT ASSETS 1,016,430 1,063,206
INVESTMENTS AT COST 42,851 42,851
PROPERTY, PLANT AND EQUIPMENT 15,577,650 14,889,831
LESS: ACCUMULATED DEPRECIATION 11,553,323 11,354,675
------------ ------------
TOTAL PROPERTY, PLANT AND EQUIPMENT 4,024,327 3,535,156
CLUSTER HOMES AND LOTS HELD FOR SALE 831,169 830,064
TOTAL ASSETS 5,914,779 5,471,277
============ ============
LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 492,768 $ 330,952
ACCRUED EXPENSES 287,902 224,300
TAXES PAYABLE AND ACCRUED 173,465 146,798
ADVANCE DEPOSITS 516,512 272,765
NOTES PAYABLE 100,000 0
------------ ------------
TOTAL CURRENT LIABILITIES 1,570,647 974,815
DEFERRED INCOME TAX LIABILITY 124,332 134,313
STOCKHOLDER'S EQUITY
CAPITAL STOCK: 942,300 942,300
PREFERRED STOCK - 7% CUMULATIVE -
$100 PAR VALUE; AUTHORIZED 12,000 SHARES
ISSUED AND OUTSTANDING - 9,423 SHARES
COMMON STOCK - NO PAR VALUE: 259,080 259,080
------------ ------------
AUTHORIZED 16,000 SHARES,
ISSUED 13,994 SHARES
TOTAL CAPITAL STOCK 1,201,380 1,201,380
RETAINED EARNINGS 3,075,117 3,217,466
------------ ------------
4,276,497 4,418,846
LESS: TREASURY STOCK AT COST
COMMON STOCK - 4,182 SHARES 56,697 56,697
------------ ------------
TOTAL STOCKHOLDER'S EQUITY 4,219,800 4,362,149
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY 5,914,779 5,471,277
============ ============
</TABLE>
2
<PAGE>
POCONO HOTELS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
UNAUDITED
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
ROOMS $1,117,464 $869,028 $1,881,228 $1,455,794
FOOD & BEVERAGE 741,611 1,622,834 1,340,828
898,016
CLUSTER HOME SALES 17,729 8,234
8,017 5,000
GOLF & OTHER SPORTS 203,267 358,054 342,288
220,268
SUNDRY DEPARTMENTS 115,876 224,155 182,034
115,297
OTHER INCOME 44,900 221,427 161,758
107,529
TOTAL REVENUES 2,466,591 1,979,682 4,325,427 3,490,936
OPERATING COSTS & EXPENSES
FOOD & BEVERAGE 670,088 1,232,350 1,204,768
661,481
HOTEL OPERATING 517,857 900,748 927,748
419,629
COST OF CLUSTER HOMES 15,268 4,015
11,106 2,212
ADMIN. & GENERAL 542,805 387,084 963,923 766,588
ADVERTISING & PROMOTION 164,347 454,443 302,412
251,016
HEAT, LIGHT & POWER 70,286 188,295 168,078
75,724
REPAIRS & MAINTENANCE & GROUNDS CARE 167,424 357,922 384,724
179,844
REAL ESTATE, CAPITAL 57,495 113,433 117,153
37,653
STOCK & OTHER TAXES & BUILDING INSURANCE
INTEREST EXPENSE 1,396 3,418
1,396 3,418
DEPRECIATION 120,000 240,000 240,000
120,000
TOTAL EXPENSES 2,300,655 2,160,211 4,467,779 4,118,904
(LOSS) FROM OPERATIONS (180,529) (142,351) (627,968)
165,937
LESS: PROVISION FOR INCOME TAXES (Note 3)
NET INCOME (LOSS) (Note 2) (180,529) (142,351) (627,968)
165,937
DIVIDENDS ON PREFERRED STOCK 16,490 32,980 32,980
16,490
NET INCOME TO COMMON STOCKHOLDERS (197,019) (175,331) (660,948)
149,447
NET (LOSS) PER COMMON SHARE BASED 15.23 (20.08) (17.87) (67.36)
ON 9,812 SHARES OUTSTANDING AFTER
RECOGNITION OF STOCK DIVIDENDS (Note 4)
</TABLE>
3
<PAGE>
POCONO HOTELS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
PERIOD ENDED
6/30/96 6/30/95
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) $(142,351) $(627,968)
ADJUSTMENTS TO RECONCILE NET INCOME TO
CASH PROVIDED BY OPERATING ACTIVITIES
DEPRECIATION & AMORTIZATION 240,000 240,000
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE (373,618) (81,013)
DECREASE (INCREASE) IN INVENTORIES (4,735) (44,180)
DECREASE (INCREASE) IN PREPAID EXPENSES 96,035 (26,688)
DECREASE (INCREASE) IN CLUSTERED HOMES/LOTS (1,105) (140,956)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE 161,816 (97,257)
INCREASE (DECREASE) IN ACCRUED EXPENSE 63,602 31,181
INCREASE (DECREASE) IN OTHER ACCRUED TAXES 26,667 93,070
INCREASE (DECREASE) IN ADVANCE DEPOSITS 243,747 173,721
TOTAL ADJUSTMENTS 452,409 145,878
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 310,058 (482,090)
CASH FLOWS FROM INVESTING ACTIVITIES
INCREASE IN INVESTMENTS
PURCHASES OF PROPERTY, PLANT & EQUIPMENT (738,153) (230,070)
NET CASH (USED IN) INVESTING ACTIVITIES (738,153) (230,070)
CASH FLOWS FROM FINANCING ACTIVITIES
PROCEEDS FROM CONSTRUCTION LOAN
PAYMENTS TO CONSTRUCTION LOAN
PROCEEDS FROM BANK NOTES PAYABLE 175,000 400,000
PAYMENTS ON BANK NOTES PAYABLE (75,000) (200,000)
NET CASH FROM FINANCING ACTIVITIES 100,000 200,000
NET INCREASE (DECREASE) IN CASH (328,095) (512,160)
CASH & CASH EQUIVALENTS @ BEGINNING OF YEAR 221,661 862,297
CASH & CASH EQUIVALENTS @ END OF YEAR (106,433) 350,137
</TABLE>
4
<PAGE>
POCONO HOTELS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
1. In the opinion of the company, the accompanying unaudited Consolidated
Condensed Financial Statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position as
of June 30, 1996 and 1995 and the results of operations and changes in financial
position for the six months then ended.
2. The results of operations for the six months ended June 30, 1996 and 1995 are
not necessarily indicative of the results to be expected for the full year.
3. At June 30, 1996 the Company's arrearage in cumulative preferred stock
dividends amounted to $223.50 per share and the total of all such shares
outstanding at the date amounted to $2,106,041.
4. The Company, through a subsidiary, has issued irrevocable letters of credit
in favor of Barrett Township, which obligates the Subsidiary to complete certain
grading, road paving and installation of utilities at the sites. The letters of
credit expire in November 1996 or when these improvements are completed and
inspected by the Township.
5
<PAGE>
POCONO HOTELS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF INCOME
General
The Company derives substantially all of its revenues from the operation of a
resort in Skytop, Pennsylvania, and the development and sale of clustered homes.
Historically, the Company's revenues, and consequently, profits, have been
received primarily in May through October of each year. Operations in November
through April are usually at a loss. These seasonal fluctuations do not
materially affect the Company's or its subsidiaries' capital expenditures,
inventories, or terms on which business is conducted.
Results of Operations
Revenues for the second quarter of 1996 increased by $486,909 or 25% as compared
to the second quarter of 1995. This was the result of an increase in rooms
occupancy for the Lodge of 594 room nights, a change in occupancy percentage
from 44% in the second quarter of 1995 to 48% in the second quarter of 1996.
Operating costs and expenses increased $140,444 for the second quarter of 1996
when compared with the same period a year ago. This increase is attributable to
the increased volume of business.
Changes in Financial Position
Liquidity and Capital Resources
The capital project spending during the second quarter totaled $446,938.
The Company has a line of credit for the resort operation of $2,500,000 with an
outstanding balance of $100,000 at the end of June 1996.
Skytop Development Corporation has completed construction of thirty of the
planned thirty-two units of the clustered homes. Of these, twenty-eight have
been sold; two units are presently available for sale.
6
<PAGE>
Item 9 Exhibits and Reports on Form 8-K
(a) Exhibits:
Computation of per share earnings
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net Income (Loss) $165,937 $(180,529) $(142,351) $(627,968)
LESS:
Earnings applicable to cumulative 16,490 16,490 32,980 32,980
7% - $100 par value Preferred Stock
9,423 shares outstanding
Net Applicable to Common Stock 149,447 (197,019) (175,331) (660,948)
Common Stock
Number of shares issued 13,994 13,994 13,994 13,994
Less number of shares in treasury 4,182 4,182 4,182 4,182
Net Shares 9,812 9,812 9,812 9,812
Net (Loss) per Common Share 15.23 (20.08) (17.87) (67.36)
</TABLE>
(b) Reports on Form 8-K
There were no reports on Form 8-K for the six months ended
June 30, 1996.
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.
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Date Edward Mayotte, Vice President
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Date Charles F. Hewson, Asst. Treasurer
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENT OF INCOME FOR THE QUARTER ENDED MARCH 31, 1996 AND THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> (106,433)
<SECURITIES> 0
<RECEIVABLES> 805,906
<ALLOWANCES> 0
<INVENTORY> 157,746
<CURRENT-ASSETS> 1,016,430
<PP&E> 15,577,650
<DEPRECIATION> (11,553,323)
<TOTAL-ASSETS> 5,914,779
<CURRENT-LIABILITIES> 1,570,647
<BONDS> 0
0
942,300
<COMMON> 259,080
<OTHER-SE> 3,142,752
<TOTAL-LIABILITY-AND-EQUITY> 5,914,779
<SALES> 0
<TOTAL-REVENUES> 2,466,591
<CGS> 0
<TOTAL-COSTS> 2,300,655
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 169,937
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 15.23
</TABLE>
