U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 12, 1999
( ) TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-15030
WINTER SPORTS, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
MONTANA 81-0221770
- -------------------- ----------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER I.D. NO.)
P.O. BOX 1400, WHITEFISH, MONTANA 59937
---------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE (406) 862-1900
FORMER NAME, FORMER ADDRESS & FORMER 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, AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
----- ----
AS OF OCTOBER 18, 1999 THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON
STOCK, NO PAR VALUE, WAS 1,008,368.
TRANSITION SMALL BUSINESS DISCLOSURE FORMAT YES NO X
----- ----
WINTER SPORTS, INC.
INDEX
PAGE NO.
PART I.FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
AT:
SEPTEMBER 12, 1999
SEPTEMBER 13, 1998
MAY 31, 1999
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS:
JUNE 1, 1999 - SEPTEMBER 12, 1999
JUNE 1, 1998 - SEPTEMBER 13, 1998
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS:
JUNE 1, 1999 - SEPTEMBER 12, 1999
JUNE 1, 1998 - SEPTEMBER 13, 1998
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
9/12/99 9/13/98 5/31/99
UNAUDITED UNAUDITED NOTE 2
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 226,818 $ 208,249 $ 236,132
CERTIFICATES OF DEPOSIT 7,125 249,000 7,125
RECEIVABLES (NET OF RESERVE FOR
BAD DEBTS OF $23,803, $11,090
AND $17,128, RESPECTIVELY) 124,980 111,796 81,278
RECEIVABLES - RELATED PARTY 15,003 2,088 14,882
INCOME TAX REFUND RECEIVABLE 315,669 642,271 190,753
CURRENT DEFERRED TAX ASSET 24,516 51,767 24,516
INVENTORIES 424,003 364,612 411,870
PREPAID EXPENSES 90,022 82,295 229,448
---------- ---------- ----------
TOTAL CURRENT ASSETS 1,228,136 1,712,078 1,196,004
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT, AT COST 23,693,174 22,462,483 23,693,174
ACCUMULATED DEPRECIATION
AND AMORTIZATION (12,006,310)(10,836,365) (11,992,377)
----------- ----------- -----------
11,686,865 11,626,118 11,700,797
CONSTRUCTION IN PROGRESS 1,101,936 4,212,767 419,568
LAND AND DEVELOPMENT COSTS 3,797,696 2,115,106 4,090,262
---------- ---------- ----------
NET PROPERTY AND EQUIPMENT 16,586,497 17,953,991 16,210,627
---------- ---------- ----------
OTHER ASSETS 414,021 281,102 420,443
---------- ---------- ----------
TOTAL ASSETS $18,228,653 $19,947,171 $17,827,074
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 498,331 $ 885,285 $ 452,800
ACCOUNTS PAYABLE - RELATED PARTIES 15,482 15,781 7,998
EMPLOYEE COMPENSATION AND
RELATED EXPENSES 178,253 180,589 173,302
TAXES OTHER THAN PAYROLL AND INCOME 253,477 188,274 149,064
INCOME TAXES PAYABLE 0 0 50
INTEREST PAYABLE 18,320 23,214 0
CURRENT PORTION OF LONG-TERM DEBT 0 1,356,704 24,347
DEPOSITS AND OTHER UNEARNED INCOME 1,856,055 809,605 911,467
OTHER CURRENT LIABILITIES 9,172 5,580 4,953
---------- ---------- ----------
TOTAL CURRENT LIABILITIES 2,829,090 3,465,032 1,723,981
LONG-TERM DEBT, LESS CURRENT
PORTION 6,304,245 7,190,000 6,589,369
DEFERRED INCOME TAXES 1,470,564 1,361,554 1,470,564
---------- ---------- ----------
TOTAL LIABILITIES 10,603,899 12,016,586 9,783,914
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES $ 0 $ 0 0
SHAREHOLDERS' EQUITY
PREFERRED STOCK (950 SHARES
AUTHORIZED; $100 PAR VALUE;
4% CUMULATIVE; 0, 0 AND
0 SHARES OUTSTANDING) $ 0 $ 0 $ 0
COMMON STOCK (5,000,000 SHARES
AUTHORIZED; NO PAR VALUE;
1,008,368, 1,008,368 AND
1,008,368 SHARES OUTSTANDING) 4,099,174 4,099,174 4,099,174
ADDITIONAL PAID-IN CAPITAL 20,519 20,519 20,519
RETAINED EARNINGS 3,505,060 3,810,892 3,923,467
-------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 7,624,753 7,930,585 8,043,160
---------- ---------- ----------
TOTAL LIABILITIES AND EQUITY $18,228,653 $19,947,171 $17,827,074
========== ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
QUARTER AND YEAR TO DATE
---------------------------
6/ 1/99 6/ 1/98
TO TO
9/12/99 9/13/98
---------- ----------
REVENUE
LIFTS $ 241,699 $ 235,033
FOOD, BEVERAGE AND RETAIL 335,017 358,565
EQUIPMENT RENTAL AND REPAIR 20,754 20,632
LODGING 52,508 55,672
LEASE, MANAGEMENT AND OTHER FEES 369,085 186,311
LEASE, MANAGEMENT AND OTHER FEES -
RELATED PARTIES 26,398 20,546
REAL ESTATE SALES 771,350 0
---------- ----------
TOTAL REVENUE 1,816,811 876,759
---------- ----------
OPERATING COSTS AND EXPENSES
DIRECT EXPENSE - LIFTS 247,749 213,066
COST OF FOOD, BEVERAGE AND RETAIL 117,738 138,242
COST OF REAL ESTATE SALES 369,929 0
PAYROLL AND RELATED EXPENSES 582,803 604,769
DIRECT EXPENSES 486,025 285,077
MARKETING 254,490 230,836
MARKETING - RELATED PARTY 0 591
DEPRECIATION AND AMORTIZATION 14,831 15,261
GENERAL AND ADMINISTRATIVE 234,233 254,049
GENERAL AND ADMINISTRATIVE -
RELATED PARTIES 3,237 12,667
---------- -----------
TOTAL OPERATING COSTS AND EXPENSES 2,311,036 1,754,558
--------- ----------
OPERATING INCOME (LOSS) (494,225) (877,799)
---------- ----------
OTHER INCOME (EXPENSE)
INTEREST INCOME 237 5,450
INTEREST EXPENSE (126,444) (144,499)
OTHER INCOME (EXPENSE) 78,210 100,307
---------- ----------
TOTAL OTHER INCOME (EXPENSE) (47,998) (38,742)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES (542,222) (916,541)
PROVISION FOR (RECOVERY OF) INCOME TAXES (123,873) (366,656)
-------- ---------
NET INCOME (LOSS) $ (418,350) $ (549,885)
========== ==========
EARNINGS (LOSS) PER COMMON SHARE $ (0.41) $ (0.55)
WEIGHTED AVERAGE SHARES OUTSTANDING 1,008,368 1,008,368
========= ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
QUARTER AND YEAR TO DATE
--------------------------
6/ 1/99 6/ 1/98
TO TO
9/12/99 9/13/98
---------- ----------
NET CASH FLOW PROVIDED BY:
PROVIDED BY (USED IN) OPERATING
ACTIVITIES: $ 542,361 $ (1,905,114)
CASH FLOWS FROM INVESTING ACTIVITIES
PROPERTY AND EQUIPMENT ACQUISITIONS (266,551) (248,109)
---------- ----------
NET CASH (USED IN) INVESTING ACTIVITIES: (266,551) (248,109)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM DRAWS ON LONG-TERM REVOLVER 1,143,135 1,905,120
PRINCIPAL PAYMENTS ON LONG-TERM DEBT (200,273) 1,195,639
PRINCIPAL PAYMENTS ON LONG-TERM REVOLVER (1,227,986) (889,292)
---------- ---------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES: (285,124) 2,211,467
--------- ----------
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS (9,314) 58,244
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 236,132 150,005
------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 226,818 $ 208,249
========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH PAID YEAR TO DATE FOR:
INTEREST (NET OF CAPITALIZED INTEREST) $ 93,498 $ 126,578
INCOME TAXES (NET OF REFUNDS) $ 50 $ 50
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
THE FINANCIAL STATEMENTS INCLUDED HEREIN ARE CONDENSED ACCORDING TO 10-QSB
REPORTING REQUIREMENTS. THEY DO NOT CONTAIN ALL INFORMATION REQUIRED BY
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO BE INCLUDED IN A SET OF AUDITED
FINANCIAL STATEMENTS. ACCORDINGLY, THE FINANCIAL STATEMENTS SHOULD BE READ IN
CONJUNCTION WITH THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE
COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED MAY 31, 1999.
IN THE OPINION OF MANAGEMENT, THE ACCOMPANYING CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS CONTAIN ALL ADJUSTMENTS (CONSISTING OF NORMAL RECURRING ACCRUALS)
NECESSARY FOR A FAIR PRESENTATION OF THE INTERIM PERIODS PRESENTED.
CERTAIN AMOUNTS IN THE SEPTEMBER 13, 1998 FINANCIAL STATEMENTS HAVE BEEN
RECLASSIFIED TO CONFORM TO THE SEPTEMBER 12, 1999 PRESENTATION.
NOTE 2 - MAY 31, 1999
THE BALANCE SHEET AT MAY 31, 1999 HAS BEEN CONDENSED FROM THE AUDITED FINANCIAL
STATEMENTS AT THAT DATE.
NOTE 3 - (LOSS) PER COMMON SHARE
(LOSS) PER COMMON SHARE IS BASED ON NET INCOME (LOSS) AFTER DEDUCTING DIVIDENDS
PAID ON PREFERRED STOCK OF $0 FOR THE QUARTER ENDED SEPTEMBER 12, 1999. THE
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING WERE 1,008,368 AND
1,008,368 FOR THE QUARTERS ENDED SEPTEMBER 12, 1999 AND SEPTEMBER 13, 1998.
NOTE 4 - SEASONAL NATURE OF OPERATIONS
THE COMPANY'S OPERATIONS ARE HIGHLY SEASONAL IN NATURE. REVENUES, EARNINGS AND
CASH FLOW ARE GENERATED PRINCIPALLY FROM THE WINTER OPERATIONS OF LIFTS AND
RELATED FACILITIES. IT IS THE COMPANY'S PRACTICE TO RECOGNIZE SUBSTANTIALLY ALL
OF THE YEAR'S DEPRECIATION EXPENSE IN THE THIRD AND FOURTH QUARTERS IN ORDER TO
BETTER MATCH EXPENSES INCURRED IN GENERATING REVENUES DURING THE COMPANY'S MAIN
PERIODS OF BUSINESS. THE COMPANY ALSO GENERATES REVENUES FROM THE SALE OF REAL
ESTATE, WHICH IS ONGOING THROUGHOUT THE FISCAL YEAR. THEREFORE, THE RESULTS OF
OPERATIONS FOR THE INTERIM PERIODS ENDED SEPTEMBER 12, 1999 AND SEPTEMBER 13,
1998 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL
YEAR.
NOTE 5 - LEGAL PROCEEDINGS AND CONTINGENCIES
FROM TIME TO TIME, THE COMPANY HAS BEEN A DEFENDANT IN UNRELATED LAWSUITS FILED
BY INDIVIDUALS WHO ARE EACH SEEKING DAMAGES OF SPECIFIED AMOUNTS, FOR ALLEGED
PERSONAL INJURIES RESULTING FROM ACCIDENTS OCCURRING ON THE COMPANY'S PROPERTY
OR WHILE SKIING. THE COMPANY'S INSURANCE CARRIER PROVIDES DEFENSE AND COVERAGE
FOR THESE CLAIMS AND THE COMPANY'S PARTICIPATION HAS BEEN LIMITED TO ITS POLICY
DEDUCTIBLE. SUCH AMOUNTS ARE CHARGED TO GENERAL AND ADMINISTRATIVE EXPENSE UPON
SETTLEMENT.
NOTE 6 - NOTES PAYABLE
THE COMPANY CURRENTLY HAS A LOAN AGREEMENT WITH BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, DOING BUSINESS AS SEAFIRST BANK (SEAFIRST). THE
AGREEMENT PROVIDES FOR A $9,750,000 REVOLVING REDUCING LINE OF CREDIT, WHICH
MATURES ON JUNE 1, 2008. THE AGREEMENT CONTAINS COVENANTS THAT REQUIRE MINIMUM
NET WORTH, A FIXED CHARGE COVERAGE RATIO AND RESTRICTS INVESTMENT, DISPOSITION
OF ASSETS, CAPITAL EXPENDITURES, OUTSIDE BORROWING AND PAYMENT OF DIVIDENDS.
EACH JUNE 1, THE AMOUNT AVAILABLE UNDER THE LINE REDUCES BY $750,000. AT
SEPTEMBER 12, 1999 $3,478,008 WAS UNUSED OF THE $9,000,000 AVAILABLE UNDER THE
INSTRUMENT. AT SEPTEMBER 13, 1998 $2,560,000 WAS UNUSED OF THE $9,750,000
AVAILABLE UNDER THE INSTRUMENT. THE LOAN BEARS INTEREST AT OR BELOW SEAFIRST'S
PRIME RATE.
THE COMPANY ALSO HAD A LOAN AGREEMENT WITH WHITEFISH CREDIT UNION FOR FINANCING
OF THE CONSTRUCTION OF A MIXED-USE CONDOMINIUM PROJECT. THE AGREEMENT PROVIDED
FOR A $3,900,000 LINE OF CREDIT DUE AND PAYABLE ON SEPTEMBER 1, 1999. AT
SEPTEMBER 13, 1998 $2,543,296 WAS UNUSED AND AVAILABLE FOR BORROWING UNDER THE
INSTRUMENT. THE LOAN INTEREST RATE WAS PRIME PLUS 0.5%. ON AUGUST 31, 1999 THE
COMPANY CONVERTED THE REMAINING BALANCE OF THE CONSTRUCTION LOAN INTO A FIFTEEN-
YEAR TERM LOAN WITH A THREE-YEAR BALLOON. AT SEPTEMBER 12, 1999 THE BALANCE OF
THE TERM LOAN WAS $782,253. THE TERM LOAN BEARS INTEREST AT NEW YORK PRIME,
ADJUSTED QUARTERLY.
NOTE 7 - BUSINESS SEGMENT INFORMATION
THE COMPANY OPERATES PRINCIPALLY IN TWO INDUSTRIES: THE OPERATION OF A SKI AREA
AND THE SALE OF REAL ESTATE. FINANCIAL INFORMATION BY INDUSTRY SEGMENT FOR THE
FIRST QUARTERS OF 1999 AND 2000 IS SUMMARIZED AS FOLLOWS:
SKI AREA REAL ESTATE CONSOLIDATED
-------- ----------- ------------
QUARTER ENDED 9/12/99
TOTAL REVENUE $ 996,061 $ 820,750 $ 1,816,811
OPERATING PROFIT (LOSS) $ (854,872) $ 360,648 $ (494,225)
DEPRECIATION AND AMORTIZATION $ 8,548 $ 6,283 $ 14,831
IDENTIFIABLE ASSETS $14,210,960 $ 4,017,693 $18,228,653
CAPITAL EXPENDITURES $ 266,551 $ 0 $ 266,551
QUARTER ENDED 9/13/98
TOTAL REVENUE $ 876,759 $ 0 $ 876,759
OPERATING PROFIT (LOSS) $ (789,579) $ (88,220) $ (877,799)
DEPRECIATION AND AMORTIZATION $ 10,177 $ 5,084 $ 15,261
IDENTIFIABLE ASSETS $14,767,036 $ 5,180,135 $19,947,171
CAPITAL EXPENDITURES $ 248,109 $ 0 $ 248,109
WINTER SPORTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
FOR THE PERIOD
6/ 1/99 6/ 1/98
TO TO
9/12/99 9/13/98
----------- -----------
GROSS REVENUES $ 1,816,811 $ 876,759
NET LOSS $ (418,350) $ (549,885)
LOSS PER COMMON SHARE $ (0.41) $ (0.55)
TOTAL ASSETS $18,228,653 $19,947,171
LONG-TERM DEBT LESS CURRENT PORTION $ 6,304,245 $ 7,190,000
RESULTS OF OPERATIONS, FIRST QUARTER AND YEAR TO DATE
REVENUES
TOTAL REVENUES FOR THE FIRST QUARTER THAT ENDED SEPTEMBER 12, 1999 WERE
$1,816,811, AN INCREASE OF $940,052 OR 107% FROM THE QUARTER THAT ENDED
SEPTEMBER 13, 1998. REAL ESTATE SALES ACCOUNTED FOR THE INCREASE. REAL ESTATE
SALES OF $820,750 IN THE FIRST QUARTER OF THE CURRENT YEAR COMPARED WITH NO REAL
ESTATE SALES IN THE FIRST QUARTER OF THE PRIOR. SKI AREA REVENUE INCREASED FROM
THE SAME QUARTER LAST YEAR DUE TO INCREASES IN RETAIL SALES, CONCERT PROCEEDS
AND PROPERTY MANAGEMENT SERVICES. CONCERT PROCEEDS INCREASED BY OVER 100% FROM
THE SAME QUARTER IN THE PRIOR YEAR.
THE COMPANY IS CURRENTLY NEGOTIATING WITH A NATIONAL FOOD CONCESSIONAIRE FOR THE
LEASE OR MANAGEMENT OF SEVERAL OF THE COMPANY'S FOOD AND BEVERAGE OPERATIONS.
THE CONSUMMATION OF THESE ARRANGEMENTS WILL LIKELY AFFECT THE FUTURE
CLASSIFICATION AND REPORTED AMOUNTS OF REVENUES AND COSTS FROM THESE OPERATIONS,
WHICH HAVE HISTORICALLY BEEN REPORTED AS FOOD AND BEVERAGE REVENUE AND COST OF
FOOD AND BEVERAGE, RESPECTIVELY.
OPERATING EXPENSES
TOTAL OPERATING COSTS AND EXPENSES IN THE QUARTER ENDED SEPTEMBER 12, 1999
INCREASED BY $556,478 FROM THE SAME QUARTER LAST YEAR. THE INCREASE IS DUE TO
INCREASES IN COST OF REAL ESTATE SALES AND DIRECT EXPENSES. THE COST OF REAL
ESTATE SALES INCREASED DUE TO REAL ESTATE SALES IN THE QUARTER ENDED SEPTEMBER
12, 1999. THE INCREASE IN DIRECT EXPENSES IS DUE TO THE INCREASED COST
ASSOCIATED WITH CONCERT PRODUCTIONS IN THE FIRST QUARTER OF THE CURRENT FISCAL
YEAR.
OTHER EXPENSES
INTEREST EXPENSE FOR THE QUARTER ENDED SEPTEMBER 12, 1999 WAS $126,444, A
DECREASE OF $18,055 OR 12.5% LOWER THAN THE FIRST QUARTER LAST YEAR. INTEREST
EXPENSE DECREASED DUE TO LOWER DEBT LEVELS ON THE COMPANY'S OPERATING LINE OF
CREDIT. THE DEBT LEVELS ARE A RESULT OF THE COMPANY'S CAPITAL EXPANSION PROGRAM
FROM THE 1998 FISCAL YEAR. INTEREST EXPENSE FOR THE FIRST QUARTER OF 1999 AND
1998 ARE NET OF CONSTRUCTION PERIOD INTEREST OF $2,256 AND $16,446,
RESPECTIVELY.
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL AT THE END OF THE QUARTER WAS $(1,600,955) WHICH IS AN INCREASE
OVER THE PRIOR YEAR'S $(1,752,953). THE INCREASE IS PRIMARILY DUE TO THE
CURRENT MATURITY OF $1,356,704 OF CONSTRUCTION LOAN DEBT DURING THE QUARTER
ENDED SEPTEMBER 13, 1998, AND AN INCREASE IN DEPOSIT AND OTHER UNEARNED INCOME
DURING THE QUARTER ENDED SEPTEMBER 12, 1999.
TOTAL LIABILITIES OF $10,603,899 REPRESENT 139% OF SHAREHOLDERS' EQUITY AT
SEPTEMBER 12, 1999, DOWN FROM $12,016,586 OR 152% OF SHAREHOLDERS' EQUITY AT
SEPTEMBER 13, 1998.
MANAGEMENT CONTINUALLY EVALUATES THE COMPANY'S CASH AND FINANCING REQUIREMENTS.
OVER THE YEARS, THE COMPANY HAS OBTAINED FAVORABLE FINANCING FROM FINANCIAL
INSTITUTIONS WHEN NECESSARY TO FUND OFF-SEASON REQUIREMENTS AND CAPITAL
ACQUISITIONS. THE COMPANY HAS A REVOLVING, REDUCING CREDIT AGREEMENT THAT
PROVIDES FINANCIAL RESOURCES ALLOWING THE COMPANY TO MEET SHORT-TERM OPERATING
NEEDS AND FUND CAPITAL EXPENDITURES. THE $9.75 MILLION AGREEMENT REDUCES
AVAILABLE CAPACITY BY $750,000 EACH JUNE 1. AT SEPTEMBER 12, 1999, THERE WAS
$5,521,992 BORROWED WITH $3,478,008 OF UNUSED CAPACITY ON THE $9,000,000 LINE OF
CREDIT. IN ORDER TO FINANCE THE CONSTRUCTION OF A CONDOMINIUM PROJECT THE
COMPANY OBTAINED A CONSTRUCTION LOAN IN THE FORM OF A LINE OF CREDIT. THE
$3,900,000 LINE OF CREDIT MATURED ON SEPTEMBER 1, 1999. AT SEPTEMBER 13, 1998,
THERE WAS $1,356,704 BORROWED WITH $2,543,296 OF UNUSED CAPACITY ON THE
$3,900,000 CONSTRUCTION LOAN. ON AUGUST 31, 1999 THE REMAINING BALANCE OF
$782,253 WAS CONVERTED INTO A FIFTEEN-YEAR TERM LOAN WITH A THREE-YEAR BALLOON.
WINTER SPORTS, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
REFERENCE IS MADE TO NOTE 5 OF THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF THIS FORM 10-QSB, WHICH IS INCORPORATED
HEREIN BY REFERENCE.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
AT THE REGULAR ANNUAL MEETING OF SHAREHOLDERS HELD ON OCTOBER 12,
1999, THE SHAREHOLDERS RE-ELECTED NINE CURRENT DIRECTORS TO ONE
YEAR TERMS. WHEN VOTING FOR DIRECTORS, SHAREHOLDERS ARE ENTITLED
TO CAST 9 VOTES FOR EACH SHARE OF COMMON STOCK HELD WITH
CUMULATIVE VOTING ALLOWED. THE SHAREHOLDERS ALSO VOTED TO RATIFY
JORDAHL & SLITER PLLC AS INDEPENDENT AUDITORS. THE TABLES BELOW
SUMMARIZE THE VOTING RESULTS:
ELECTION OF DIRECTORS
VOTES FOR VOTES WITHHELD
---------- --------------
CHARLES R. ABELL 817,039 124,927
BRIAN T. GRATTAN 671,363 142,667
CHARLES P. GRENIER 761,381 114,235
DENNIS L. GREEN 669,586 144,578
JERRY J. JAMES 697,929 138,673
MICHAEL T. JENSON 1,441,626 42,347
DARREL R. MARTIN 668,937 145,093
MICHAEL J. MULDOWN 902,690 97,818
CALVIN S. ROBINSON 677,548 144,532
RATIFICATION OF AUDITORS
SHARES VOTED FOR 801,101
SHARES VOTED AGAINST 338
SHARES ABSTAINING 12,832
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED
SEPTEMBER 12, 1999.
WINTER SPORTS, INC.
FORM 10-QSB
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT CAUSED
THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
WINTER SPORTS, INC.
(REGISTRANT)
DATE: OCTOBER 20, 1999 /S/MICHAEL J. COLLINS
MICHAEL J. COLLINS
PRESIDENT & CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
DATE: OCTOBER 20, 1999 /S/JOANN M. GOULD
JOANN M. GOULD
CONTROLLER & ASSISTANT SECRETARY
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 10-QSB dated
September 12, 1999 and is qualified in its entirety by reference to such 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-END> SEP-12-1999
<CASH> 233,943
<SECURITIES> 0
<RECEIVABLES> 163,786
<ALLOWANCES> 23,803
<INVENTORY> 424,003
<CURRENT-ASSETS> 1,228,135
<PP&E> 28,592,807
<DEPRECIATION> 12,006,310
<TOTAL-ASSETS> 18,228,653
<CURRENT-LIABILITIES> 2,829,090
<BONDS> 6,304,245
0
0
<COMMON> 4,099,174
<OTHER-SE> 3,525,579
<TOTAL-LIABILITY-AND-EQUITY> 18,228,653
<SALES> 335,017
<TOTAL-REVENUES> 1,816,811
<CGS> 117,738
<TOTAL-COSTS> 2,311,036
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126,444
<INCOME-PRETAX> (542,222)
<INCOME-TAX> (123,873)
<INCOME-CONTINUING> (418,350)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (418,350)
<EPS-BASIC> (0.41)
<EPS-DILUTED> (0.41)
</TABLE>
