SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 No. 33-8964
CAPTAIN TONY'S PIZZA, INC.
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(Exact name of registrant as specified in its charter)
New York 16-1260971
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(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
P. O. box 82, Deland, Florida 32721-0082
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(Address of principal executive offices)
(800) 332-8669
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(Issuer's telephone number)
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(Former name, former address and formal fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
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As of March 31, 1996, 8,131,661 Common Shares were outstanding.
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CAPTAIN TONY'S PIZZA, INC.
INDEX
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<CAPTION>
Page
Number
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PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 1996
(Unaudited) and June 30, 1995.................................1
Consolidated Statements of Operations for the Nine
Months Ended March 31, 1996 and 1995 (Unaudited)..............2
Consolidated Statements of Cash Flows for the Nine
Months Ended March 31, 1996 and 1995 (Unaudited)..............3
Notes to Consolidated Financial Statements
(Unaudited)...................................................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.......................5
PART II. OTHER INFORMATION.............................................6
SIGNATURES..............................................................7
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CAPTAIN TONY'S PIZZA, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
(Unaudited) (Note)
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 39,092 $ 36,644
Accounts receivable, net 247 2,138
Inventories - 2,772
Prepaid expenses - 1,014
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TOTAL CURRENT ASSETS 39,339 42,568
EQUIPMENT - 13,051
Less accumulated depreciation - 12,760
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- 291
OTHER ASSET
Security deposit - 375
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$ 39,339 $ 43,234
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 471 $ 7,622
Other liabilities - 1,215
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TOTAL CURRENT LIABILITIES 471 8,837
SHAREHOLDERS' EQUITY (NOTE B)
Common stock 8,131 8,121
Additional paid-in capital 938,781 937,791
Accumulated deficit (908,044) (911,515)
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38,868 34,397
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$ 39,339 $ 43,234
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</TABLE>
Note: The balance sheet at June 30, 1995 has been taken from the audited
financial statements at that date and condensed.
See notes to consolidated financial statements.
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CAPTAIN TONY'S PIZZA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
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<CAPTION>
Three months ended Nine months ended
March 31, March 31,
1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Revenues:
Franchise royalty fees $ 15,566 $ 18,912 $ 44,581 $ 69,103
Other franchise fees - - 2,500 2,500
Institutional food sales - 11,181 - 35,815
Other sales - 2,659 3,793 17,594
Other income - 41 6,207 987
-------- -------- -------- --------
15,566 32,793 57,081 125,999
Costs and expenses:
Cost of institutional food sales - 10,607 - 33,966
Cost of other sales - 2,039 4,441 12,783
Operating, general and
administrative expenses 10,176 36,428 49,307 99,862
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10,176 49,074 53,748 146,611
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INCOME (LOSS) FROM
OPERATIONS 5,390 (16,281) 3,333 (20,612)
Interest income, net 132 236 138 3,309
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INCOME (LOSS) BEFORE
INCOME TAXES AND
EXTRAORDINARY ITEM 5,522 (16,045) 3,471 (17,303)
Income taxes 1,215 - 765 -
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INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM 4,307 (16,045) 2,706 (17,303)
Extraordinary item-utilization of
operating loss carryforward 1,215 - 765 -
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NET INCOME (LOSS) $ 5,522 $(16,045) $ 3,471 $(17,303)
======== ======== ======== ========
Net income (loss) per share $ - $ - $ - $ -
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</TABLE>
See notes to consolidated financial statements.
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CAPTAIN TONY'S PIZZA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine months ended March 31,
1996 1995
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<S> <C> <C>
CASH FLOWS - OPERATING ACTIVITIES
Net income (loss) for the period $ 3,471 $(17,303)
Adjustments to reconcile net income (loss) to
net cash provided by (used for) operating
activities:
Depreciation and amortization 291 797
Changes in certain assets and liabilities
affecting operations:
Accounts receivable 1,891 5,338
Inventories 2,772 163
Prepaid expenses 1,014 (7,374)
Accounts payable (7,151) (4,454)
Accrued payroll - 1,190
Due to officer/shareholder - (33,931)
Other liabilities (1,215) (1,760)
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NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES 1,073 (57,334)
CASH FLOWS - INVESTING ACTIVITIES
Issuance of common stock 1,000 -
Security deposits refunded 375 805
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NET CASH PROVIDED BY INVESTING
ACTIVITIES 1,375 805
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NET INCREASE (DECREASE) IN CASH 2,448 (56,529)
Cash at beginning of period 36,644 101,893
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CASH AT END OF PERIOD $ 39,092 $ 45,364
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</TABLE>
See notes to consolidated financial statements.
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CAPTAIN TONY'S PIZZA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A: CONDENSED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary, CTP Equipment, Inc. ("CTP").
Intercompany transactions and balances have been eliminated in consolidation.
The condensed consolidated balance sheet as of March 31, 1996, the consolidated
statements of operations for the nine-month periods ended March 31, 1996 and
1995, and the consolidated statements of cash flows for the nine-month periods
then ended have been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at March 31, 1996 and for all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or are omitted. It is suggested that these condensed
financial statements be read in conjunction with financial statements and notes
thereto included in the Company's form 10-K, Annual Report, under Section 13 or
15(d) of the Securities Exchange Act of 1934 for the fiscal year ended June 30,
1995. The results of operations for the period ended March 31, 1996 are not
necessarily indicative of operating results for the full year.
NOTE B: ISSUANCE OF COMMON STOCK
In September 1995, the Board of Directors approved the issuance of 10,000
shares of common stock to a Director for services rendered. The stock was
valued at $.01 per share based on an independent appraisal.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity, Capital Resources and Financial Condition
The Company's cash balance increased by $2,448 for the nine months ended
March 31, 1996 due principally to the net income of $3,471 for the period.
With the exception of some minor receivables, the only operating asset is
cash of $39,092 at March 31, 1996.
The Company's assets are highly liquid and the cash balance along with
normal cash flows from recurring franchise royalties is adequate to meet
the current reduced level of operating expenditures into the foreseeable
future. The Company, in its current financial condition, does not have
the ability to obtain debt or equity financing and has no current plans to
do so, except by way of a merger with a company with much greater
financial resources and potential for growth. The Company is actively
discussing such opportunities with several candidates.
Results of Operations
Historically, the Company has operated three business segments:
Franchising, institutional food sales and restaurant equipment sales.
While no revenues have been earned in the nine months ended March 31, 1996
from institutional food or equipment sales, the Company has not formally
discontinued these business activities. Inquiries and quotations
regarding food service contracts and equipment sales continue to be
handled routinely but thus far have not resulted in the obtaining of any
sales contracts. However, the maintenance of existing franchises and the
solicitation of possible new franchises is the principal focus of
management's efforts in the operation of the Company.
Since June 30, 1995, the Company's operations have changed significantly.
In December 1995, management moved the corporate offices from Rochester,
New York to Florida. The Company currently has no contracts for
institutional food sales and no longer carries inventories and sells food,
paper and merchandise to franchisees who now purchase direct from approved
suppliers. Further, coincident with the move to Florida, the only
employee is the President, Michael J. Martella whose administrative duties
include prospecting for new franchisees, assisting existing franchisees,
and seeking merger or acquisition candidates for the Company. These
duties do not require his full-time attention.
The Company had a net income of $5,522 for the current quarter versus a
loss of $16,045 for the year-ago quarter reflecting the downsizing of
administrative operations.
There were 15 franchisee stores open at March 31, 1995 compared with 11 at
March 31, 1996. These store closings have resulted in the decline of
royalty revenues from $69,103 for the 1995 nine months to $44,581 for the
current 1996 nine months. Similarly, royalties declined from $18,912 for
the 1995 three months to $15,566 for the three months ended March 31,
1996.
With the loss of revenues, management has been taking the necessary steps
to reduce fixed overhead - cutting occupancy costs, office personnel,
accounting and legal fees, and other administrative expenses. Operating,
general and administrative expenses decreased by 51% for the current six
months compared with the year-ago six months, and by 72% for the current
three months versus the year-ago three months.
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS cont'd
Trends and Outlook
Management continues to operate the Company's business, monitoring the
collection of royalties and effectively containing operating expenses
while actively seeking viable candidates for merger or acquisition.
Discussions are currently being conducted with three candidates.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
N/A
Item 3. Defaults Upon Senior Securities
N/A
Item 4. Submission of Matters to a Vote of Security Holders
N/A
Item 5. Other Information
N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K -
There were no reports on Form 8-K filed for the three months
ended March 31, 1996.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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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(REGISTRANT) CAPTAIN TONY'S PIZZA, INC.
BY (SIGNATURE) /s/ Michael J. Martella
(NAME AND TITLE) Michael J. Martella, President,
Treasurer, (Principal Financial Officer)
Chief Executive Officer and Director
(DATE) May 13, 1996
BY (SIGNATURE) /s/ Robert J. Wood
(NAME AND TITLE) Robert J. Wood, Secretary and Director
(DATE) May 13, 1996
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 39,092
<SECURITIES> 0
<RECEIVABLES> 247
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39,339
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 39,339
<CURRENT-LIABILITIES> 471
<BONDS> 0
0
0
<COMMON> 8,131
<OTHER-SE> 30,737
<TOTAL-LIABILITY-AND-EQUITY> 39,339
<SALES> 57,081
<TOTAL-REVENUES> 57,219
<CGS> 4,441
<TOTAL-COSTS> 4,441
<OTHER-EXPENSES> 49,307
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,471
<INCOME-TAX> 765
<INCOME-CONTINUING> 2,706
<DISCONTINUED> 0
<EXTRAORDINARY> 765
<CHANGES> 0
<NET-INCOME> 3,471
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
