<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Amendment No. 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission File Number: 0-17436
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
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(Exact name of small business issuer as specified in its charter)
Colorado 84-1034868
- ---------------------------- ---------------------------------
(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5325 South Valley View Boulevard, Suite 10, Las Vegas, Nevada 89118
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(Address of principal executive offices including zip code)
(702) 798-7777
--------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
As of May 27, 1997, 5,319,008 shares of common stock, no par value per share,
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes___ No X
<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
FORM 10-QSB
INDEX
Page No.
Part I: Financial Information
Item 1. Financial Information:
Unaudited Condensed Consolidated Balance Sheets 3-4
Unaudited Condensed Consolidated Statements of
Income 5
Unaudited Condensed Consolidated Statements of
Cash Flows 6
Notes to Unaudited Condensed Consolidated
Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II: Other Information
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 9
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<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 8,315,000 $ 6,457,000
Accounts receivable 305,000 86,000
Inventories 498,000 1,776,000
Prepaid expenses and other 25,000 101,000
----------- -----------
Total current assets 9,143,000 8,420,000
FURNITURE, EQUIPMENT AND
LEASEHOLD IMPROVEMENTS, NET 227,000 416,000
PROJECT DEVELOPMENT COSTS 3,338,000 2,103,000
OTHER ASSETS 65,000 150,000
NET ASSETS OF DISCONTINUED OPERATIONS - 443,000
----------- -----------
$12,973,000 $11,532,000
NOTE: The balance sheet at December 31, 1996 has been taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-3-
<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
CURRENT LIABILITIES:
Bank line of credit $ - $ 398,000
Accounts payable and accrued
expenses 1,355,000 2,047,000
Deferred franchise fees - 63,000
Income taxes payable 575,000 -
----------- -----------
Total current liabilities 1,930,000 2,508,000
NOTE PAYABLE TO SHAREHOLDER 105,000 631,000
OTHER LONG-TERM LIABILITIES 102,000 111,000
DEFERRED INCOME TAX LIABILITY 743,000 743,000
MINORITY INTEREST 6,431,000 5,802,000
STOCKHOLDERS' EQUITY:
Convertible, preferred stock,
Series A, no par value:
authorized-5,000,000 shares;
issued and outstanding-512,799
shares 5,000 5,000
Common stock, no par value:
authorized-15,000,000 shares,
issued and outstanding-
5,319,008 shares 3,871,000 3,871,000
Accumulated deficit (214,000) (2,139,000)
----------- -----------
Total stockholders' equity 3,662,000 1,737,000
$12,973,000 $11,532,000
NOTE: The balance sheet at December 31, 1996 has been taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
For the Three Months
Ended March 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
REVENUES:
Net merchandise sales $ 961,000 $ 1,613,000
Interest income 69,000 5,000
Royalties 6,000 -
Other 72,000 55,000
----------- -----------
Total revenues 1,108,000 1,673,000
EXPENSES:
Cost of sales 545,000 1,103,000
Selling, general and administrative 614,000 831,000
SportPark development costs 77,000 94,000
----------- -----------
Total expenses 1,236,000 2,028,000
LOSS BEFORE PROVISION FOR INCOME TAXES (128,000) (355,000)
PROVISION (BENEFIT) FOR INCOME TAXES - -
----------- -----------
LOSS BEFORE MINORITY INTEREST (128,000) (355,000)
MINORITY INTEREST (629,000) 76,000
INCOME (LOSS) BEFORE LOSS FROM
DISCONTINUED OPERATIONS (757,000) (279,000)
DISCONTINUED OPERATIONS
Income (loss) from operations of
discontinued franchise and
wholesale operations (159,000) 46,000
Gain on disposal of franchised
wholesale operations (less
applicable income taxes of
$575,000) 2,841,000 -
----------- -----------
NET INCOME (LOSS) $ 1,925,000 $ (233,000)
NET INCOME (LOSS) PER SHARE:
Income (loss) from operations $ (.02) $ (.04)
Income (loss) from discontinued
operations .38 -
----------- -----------
NET INCOME (LOSS) PER SHARE $ .36 $ (.04)
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,925,000 $ (233,000)
Adjustments to reconcile net income
(loss) to net cash used by operating
activities:
Minority interest 629,000 (76,000)
Depreciation and amortization 14,000 27,000
Gain on sale of franchise and
wholesale operations (3,416,000) -
Changes in assets and liabilities:
(Increase)in accounts receivable (240,000) (112,000)
(Increase)decrease in inventory (218,000) 274,000
Decrease in prepaid expenses and
other 68,000 654,000
(Increase)decrease in other assets 3,000 (4,000)
Increase(decrease) in accounts payable 204,000 (773,000)
Increase (decrease) in deferred
franchise fees (63,000) 21,000
Increase in income tax payable 575,000 -
----------- -----------
Net cash used by operating activities (519,000) (222,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Project development costs (1,240,000) (152,000)
Refund development costs - 85,000
Proceeds from sale of operations 4,550,000 -
----------- -----------
Net cash flows provided by (used in)
investing activities 2,881,000 (67,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on bank line of credit, net (398,000) -
Payments on note to shareholder (526,000) -
Payments on long-term debt (9,000) -
----------- -----------
Net cash used by financing activities (933,000) -
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,858,000 (289,000)
CASH AND CASH EQUIVALENTS
-Beginning of period 6,457,000 1,043,000
CASH AND CASH EQUIVALENTS -
End of period $ 8,315,000 $ 754,000
The accompanying notes are an integral part of these condensed consolidated
financial statements.
-6-
<PAGE>
LAS VEGAS DISCOUNT GOLF & TENNIS, INC. AND SUBSIDIARIES
NOTES TO UNADUITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1. CONDENSED FINANCIAL STATEMENTS
The accompanying condensed financial statements include the accounts of Las
Vegas Discount Golf & Tennis, Inc. (LVDGT), and its subsidiaries, Saint
Andrews Golf Corporation (SAGC), LVDGT Development Corporation and LVDGT
Rainbow, Inc. (Rainbow); (collectively the "Company"). All significant
intercompany transactions have been eliminated.
The accompanying financial statements have been prepared by the Company
without audit pursuant to the rules and regulations of the SEC. In the
opinion of management, all adjustments necessary to present fairly the
financial position, results of operations and cash flows at March 31, 1997 and
for all periods presented have been made.
On February 26, 1997, the Company completed the sale of certain of its assets
and transferred certain liabilities to an unrelated buyer who has incorporated
under the name Las Vegas Golf & Tennis, Inc. The total purchase consideration
received was $5.3 million of which $4.6 million was paid in cash, $264,000 was
received in the form of a short-term unsecured receivable, $200,000 was placed
in escrow pending the accounting for inventory and trade payables, and
$200,000 was placed in escrow for two years to cover potential indemnification
obligations. Of the total consideration received approximately $2,612,000 was
allocated to the Company and $2,688,000 was allocated to SAGC.
The Company's operations after the sale consist solely of the SportPark
operations currently under development and the retail location on Rainbow
Boulevard in Las Vegas, Nevada. The sale of all assets, liabilities and
operations related to the franchise and wholesale business have been presented
as "Discontinued Operations" in the accompanying balance sheets and statements
of operations as of and for the three months ending March 31, 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. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's December 31,
1996 audited financial statements. The results of operations for the periods
ended March 31, 1997 and 1996 are not necessarily indicative of the operating
results for the full year.
NOTE 2. EARNINGS PER SHARE
In March 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings Per Share,"
effective for fiscal years ending after December 15, 1997. The Company will
adopt SFAS 128 for the year ending December 31, 1997. SFAS 128 requires the
computation and presentation of basic and diluted earnings per share for all
periods an income statement is presented. For the three months ended March
31, 1997 and 1996 the proforma calculations were as follows:
-7-
<PAGE>
March 31, 1997 March 31, 1996
Basic Diluted Basic Diluted
-------------- --------------
Income(loss) from operations $(.02) $(.02) $(.05) $(.05)
Income(loss) from discontinued operations .38 .35 (.01) .01
---- ---- ----- -----
Net income(loss) per share $.36 $ .33 $(.04) $(.04)
Options to purchase 442,000 shares of common stock were outstanding at March
31, 1997 and 1996, at exercise prices of $0.80 to $1.625 at March 31, 1997 and
1996.
NOTE 3. STATEMENT OF CASH FLOWS
For the purposes of the statement of cash flows, the Company considers all
highly liquid debt investments purchased with a maturity of three months or
less to be cash equivalents.
The Company made cash payments for interest expense of $30,000 and $17,000 for
the periods ended March 31, 1997 and 1996, respectively. There were no
payments for income taxes.
NOTE 4. RELATED PARTY TRANSACTIONS
Las Vegas Retail, a related party, purchases inventory at cost from the
Company. Such purchases amounted to $190,000 and $355,000 for the three
months ended March 31, 1997 and 1996, respectively.
NOTE 5. COMMITMENTS AND CONTINGENCIES
In December 1994, Saint Andrews entered into an agreement with Major League
Baseball ("MLB") concerning a license for the use of MLB logos, trade marks
and mascots in the decor, advertising and promotions of Saint Andrews' Slugger
Stadium concept. Saint Andrews obtained an exclusive license for indoor and
outdoor baseball batting stadiums in the United States through December 31,
1997, and in return Saint Andrews will pay a royalty of the gross revenues
from the batting cages with a minimum annual royalty for each stadium. Saint
Andrews' right to exclusively use MLB logos and other trade marks at its
baseball batting stadiums is dependent upon certain conditions set forth in
the agreement. Saint Andrews and MLB are currently in negotiations to extend
this agreement.
In May 1996, Saint Andrews entered into an agreement with Jeff Gordon, the
1995 NASCAR Winston Cup Champion and the 1997 Daytona 500 Champion, to serve
as spokesperson of the NASCAR SpeedPark through April 30, 2000. Mr. Gordon
wil be paid $25,000 for his services during 1996, $25,000 per SpeedPark per
year thereafter ($325,000 guaranteed over the life of the agreement).
Saint Andrews has an exclusive license agreement with The National Association
of Stock Car Auto Racing, Inc. ("NASCAR") for the operations of SpeedParks as
a part of the All-American SportPark or as a stand-alone NASCAR SpeedPark.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS.
SALE OF FRANCHISE OPERATIONS
On December 16, 1996, the Company and Saint Andrews entered into an agreement
to sell three retail stores and its franchise and wholesale operations
including all rights under existing franchise agreements, all trade names and
trademarks; specific depreciable assets and a modified convenant not to
compete. The sale was consummated on February 26, 2997 with the Company and
Saint Andrews receiving proceeds of $4.6 million.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997, COMPARED TO THREE MONTHS ENDED MARCH 31,
1996
During the three months ended March 31, 1997, the Company had total revenues
of $1,108,000 as compared to $1,673,000 for the same period in 1996. Cost of
sales as a percentage of merchandise sales decreased from 68% in 1996 to 57%
in 1997 as a result of a shift in product mix to items with higher average
profit margins. Selling, general and administrative expenses decreased by
$217,000 (26%) in 1997 as compared to 1996. Decreases in revenues and
expenses are primarily attributed to the February 26, 1997 sale of three
retail stores in California. Sportpark development costs decreased $17,000
(18%) in 1997.
Cost of sales as percentage of merchandise sales decreased from 68% in 1996 to
57% in 1997 as a result of a shift in product mix to items with higher average
profit margins.
The Rainbow store (not part of the February 26, 1997 sale) had an increase in
retail sales of $118,000 (21%) to $671,000 with cost of sales increasing
$96,000 (27%) to $456,000 for the three months ended March 31, 1997. Cost of
sales as a percentage of retail sales increased from 65% in 1996 to 68% in
1997. Selling, general and administrative expenses increased $14,000 (9%) to
$161,000.
Net loss from discontinued operations increased from $46,000 income in 1996 to
$159,000 loss in 1997. Revenue from discontinued operations decreased 79%
from $1,362,000 in 1996 to $290,000 in 1997. Selling, general and
administrative expenses decreased 5% from $327,000 compared to $310,000 in
1997. Cost of sales as a percentage of wholesale sales increased from 95% in
1996 to 128% in 1997. All changes in discontinued operations are attributed
to the sale of the franchise and wholesale operations on February 26, 1997
resulting in less than two months activity in the period ending March 31,
1997, versus three months in the period ending March 31, 1996.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1997, the Company had working capital of approximately $7,213,000
compared to $5,912,000 at December 31, 1996.
Cash increased from $6,457,000 at December 31, 1996, to $8,315,000 at March
31, 1997, primarily due to the sale of franchise and wholesale operations for
$4,550,000 which was partially offset by a $240,000 increase in accounts
receivable, a $218,000 increase in inventory, principal repayments of note to
shareholder of $526,000, repayments of line of credit of $398,000 and capital
expenditures and development costs of $1,240,000.
The Company incurred $1,236,000 of project development costs during the
quarter related to the continued development of its first SportPark in Las
Vegas, Nevada.
-9-
<PAGE>
The Company's sources of working capital include its current cash balance,
cash flows from operating activities and a $500,000 bank line of credit.
The Company currently has not secured financing for the construction of the
first SportPark. The Company has been holding discussions with a number of
potential corporate sponsors who have expressed an interest in participating
in the SportPark, and management expects that corporate sponsors will
contribute a portion of the financing needed. The Company expects to receive
the balance of the financing from a combination of sources including outside
equity and/or debt investors, bank financing and the Company's own cash.
There is no assurance that financing will be obtained from any of these
sources.
FACTORS AFFECTING FORWARD-LOOKING INFORMATION
This Report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. Among others, such
forward-looking statements include statements with respect to (I) the
availability to the Company of additional equity and/or debt proceeds on terms
acceptable to the Company and at the times necessary to satisfy capital
expenditure, debt repayment and other requirements, (ii) the availability of
operating cash flow in amounts and at the times anticipated by management,
(iii) the adequacy of budgeted amounts for capital expenditure projects and
the adequacy of the Company's liquidity and capital resources generally, and
(iv) the anticipated time of completion of capital projects.
These forward-looking statements involve important risks and uncertainties,
many of which will be beyond the control of the Company, and which could
significantly affect anticipated future results, both short-term and long-
term. As a result, actual results may differ, in some cases materially, from
those anticipated or contemplated by forward-looking statements in this
Report. In addition to the cautionary statements included in this section and
elsewhere throughout this Report, attention is directed to the cautionary
statements included in the Company's other publicly available reports filed
with the Securities and Exchange Commission under the Securities Exchange Act
of 1934, including without limitation the cautionary statements set forth or
referenced in 1996, under the caption "Part II, Item 6., Management's
Discussion and Analysis or Plan of Operations - Safe Harbor Provision."
PART II - OTHER INFORMATION
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 on Form 8-K.
None.
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<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.
LAS VEGAS DISCOUNT GOLF & TENNIS, INC.
Date: June 26, 1997 By:/s/ Voss Boreta
Voss Boreta, President and Chief
Financial Officer
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<PAGE>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- -----------------------------
27. FINANCIAL DATA SCHEDULE Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited condensed consolidated balance sheets and unaudited condensed
consolidated statements of income found on pages 3, 4 and 5 of the Company's
Form 10-QSB for the year to date, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 8,315,000
<SECURITIES> 0
<RECEIVABLES> 305,000
<ALLOWANCES> 0
<INVENTORY> 498,000
<CURRENT-ASSETS> 9,143,000
<PP&E> 3,338,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,973,000
<CURRENT-LIABILITIES> 1,930,000
<BONDS> 0
<COMMON> 3,871,000
0
5,000
<OTHER-SE> (214,000)
<TOTAL-LIABILITY-AND-EQUITY> 12,973,000
<SALES> 961,000
<TOTAL-REVENUES> 1,108,000
<CGS> 545,000
<TOTAL-COSTS> 545,000
<OTHER-EXPENSES> 691,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (128,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,925,000
<EPS-PRIMARY> .36
<EPS-DILUTED> .36
</TABLE>
