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 DECEMBER 3, 2000
( ) 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 JANUARY 8, 2001 THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON
STOCK, NO PAR VALUE, WAS 1,003,168.
TRANSITION SMALL BUSINESS DISCLOSURE FORMAT YES NO X
WINTER SPORTS, INC.
INDEX
PAGE NO.
PART I.FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
AT:
DECEMBER 3, 2000(UNAUDITED)
DECEMBER 5, 1999(UNAUDITED)
MAY 31, 2000
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS:
SEPTEMBER 10, 2000 - DECEMBER 3, 2000(UNAUDITED)
SEPTEMBER 13, 1999 - DECEMBER 5, 1999(UNAUDITED)
JUNE 1, 2000 - DECEMBER 3, 2000(UNAUDITED)
JUNE 1, 1999 - DECEMBER 5, 1999(UNAUDITED)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS:
JUNE 1, 2000 - DECEMBER 3, 2000(UNAUDITED)
JUNE 1, 1999 - DECEMBER 5, 1999(UNAUDITED)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
12/3/00 12/5/99 5/31/00
(UNAUDITED) (UNAUDITED) SEE NOTE 2
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 373,957 $ 458,522 $ 297,356
CERTIFICATES OF DEPOSIT 0 72,079 0
RECEIVABLES (NET OF RESERVE FOR
BAD DEBTS OF $17,680, $17,680
AND $17,680, RESPECTIVELY) 259,946 75,510 85,895
RECEIVABLES - RELATED PARTIES 0 12,573 17,258
INTEREST RECEIVABLE 1,735 0 0
INCOME TAX REFUND RECEIVABLE 570,203 381,434 190,284
CURRENT DEFERRED TAX ASSET 27,320 24,516 27,320
INVENTORIES 791,187 669,773 406,876
PREPAID EXPENSES 173,726 175,577 223,708
TOTAL CURRENT ASSETS 2,198,074 1,869,984 1,248,697
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT, AT COST 24,316,967 23,729,766 24,350,639
ACCUMULATED DEPRECIATION
AND AMORTIZATION (13 345,809)(12,017,121) (13,346,404)
10,971,158 11,712,645 11,004,235
CONSTRUCTION IN PROGRESS 1,564,915 1,726,913 564,681
LAND AND DEVELOPMENT COSTS 2,906,010 3,501,262 3,051,961
NET PROPERTY AND EQUIPMENT 15,442,083 16,940,820 14,620,877
OTHER ASSETS 208,475 413,224 209,824
TOTAL ASSETS $ 17,848,632 $19,224,028 $16,079,398
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 1,029,293 $ 1,016,203 $ 844,126
ACCOUNTS PAYABLE
- RELATED PARTIES 0 4,041 21,784
EMPLOYEE COMPENSATION AND
RELATED EXPENSES 273,522 233,431 166,983
TAXES OTHER THAN
PAYROLL AND INCOME 177,416 170,544 142,440
INTEREST PAYABLE 0 11,146 45,063
CURRENT PORTION OF
LONG-TERM DEBT 0 53,902 0
DEPOSITS AND OTHER
UNEARNED INCOME 2,389,111 2,218,050 1,858,915
OTHER CURRENT LIABILITIES 13,397 7,071 15,338
TOTAL CURRENT LIABILITIES 3,882,739 3,714,388 3,094,649
LONG-TERM DEBT, LESS CURRENT
PORTION 3,881,520 6,811,302 1,996,319
DEFERRED INCOME TAXES 1,447,290 1,470,564 1,447,290
TOTAL LIABILITIES 9,211,549 11,996,254 6,538,258
STOCKHOLDERS' EQUITY
COMMON STOCK (5,000,000 SHARES
AUTHORIZED; NO PAR VALUE;
1,003,168, 1,008,368 AND
1,008,368 SHARES OUTSTANDING) 4,070,936 4,099,174 4,099,174
ADDITIONAL PAID-IN CAPITAL 0 20,519 20,519
RETAINED EARNINGS 4,566,147 3,108,081 5,421,447
TOTAL STOCKHOLDERS' EQUITY 8,637,083 7,227,774 9,541,140
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 17,848,632 $19,224,028 $16,079,398
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
SECOND QUARTER YEAR TO DATE
9/10/00 9/13/99 6/1/00 6/1/99
TO TO TO TO
12/3/00 12/5/99 12/3/00 12/5/99
REVENUE
LIFTS $ 166,992 $ 158,521 $ 395,109 $ 400,219
FOOD, BEVERAGE & RETAIL 16,099 63,706 159,929 398,723
EQUIPMENT RENTAL
& REPAIR 24,297 21,401 46,731 42,155
LODGING 17,738 7,504 77,969 60,013
LEASE, MANAGEMENT
& OTHER FEES 202,234 103,253 477,616 472,338
LEASE, MANAGEMENT & OTHER FEES
- RELATED PARTIES 15,306 21,325 26,286 47,723
REAL ESTATE SALES 544,000 1,015,890 1,809,200 1,787,240
TOTAL REVENUE 986,666 1,391,600 2,992,840 3,208,411
OPERATING COSTS AND EXPENSES
DIRECT EXPENSES - LIFTS 438,971 361,408 656,364 609,157
COST OF FOOD,
BEVERAGE & RETAIL 21,739 30,010 83,604 147,749
COST OF REAL
ESTATE SALES 504,518 448,902 865,040 818,830
PAYROLL AND
RELATED EXPENSES 460,856 503,430 1,074,529 1,086,232
DIRECT EXPENSES 239,386 234,252 638,082 719,977
DIRECT EXPENSES
- RELATED PARTIES 20,947 30,043 40,780 30,343
MARKETING 220,751 203,379 416,765 457,870
DEPRECIATION
& AMORTIZATION 11,791 11,772 27,170 26,604
GENERAL & ADMINISTRATIVE 264,384 172,616 502,115 406,849
GENERAL & ADMINISTRATIVE
- RELATED PARTIES 400 294 400 3,531
TOTAL OPERATING COSTS
AND EXPENSES 2,183,743 1,996,106 4,304,849 4,307,142
OPERATING INCOME(LOSS) (1,197,077) (604,506)(1,312,009) (1,098,731)
OTHER INCOME (EXPENSE)
INTEREST INCOME 0 3,919 0 4,155
INTEREST EXPENSE (58,607) (116,449) (121,379) (242,893)
GAIN (LOSS) ON
DISPOSAL OF ASSETS 0 4,645 6,771 4,645
OTHER INCOME (EXPENSE) 402 57,849 1,114 136,059
TOTAL OTHER INCOME
(EXPENSE) (58,205) (50,036) (113,494) (98,034)
INCOME(LOSS) BEFORE
INCOME TAXES (1,255,282) (654,542)(1,425,503)(1,196,765)
PROVISION FOR(RECOVERY OF)
INCOME TAXES (502,114) (257,561) (570,203) (381,434)
NET INCOME(LOSS) $ (753,168) $(396,981) $ (855,300)$ (815,331)
EARNINGS(LOSS)
PER COMMON SHARE $ (0.75) $ (0.39)$ (0.85)$ (0.81)
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,004,318 1,008,368 1,005,474 1,008,368
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
6/1/00 6/1/99
TO TO
12/3/00 12/5/99
NET CASH PROVIDED BY(USED IN)
OPERATING ACTIVITIES: $(1,793,515)$ 43,455
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF CERTIFICATES OF DEPOSIT 0 (72,079)
REDEMPTION OF CERTIFICATES OF DEPOSIT 0 7,125
PROCEEDS FROM SALE OF ASSETS 33,672 4,645
PROPERTY AND EQUIPMENT ACQUISITIONS 0 (36,592)
NET CASH PROVIDED BY(USED IN) INVESTING ACTIVITES 33,672 (96,901)
CASH FLOWS FROM FINANCING ACTIVITIES:
STOCK REPURCHASE PLAN (48,757) 0
PROCEEDS FROM DRAWS ON LONG-TERM REVOLVER 2,775,201 3,238,677
PRINCIPAL PAYMENTS ON TERM LOAN 0 (517,776)
PRINCIPAL PAYMENTS ON LONG-TERM REVOLVER (890,000) (2,445,065)
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,836,444 275,836
NET INCREASE IN CASH AND CASH EQUIVALENTS 76,601 222,390
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 297,356 236,132
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 373,957 $ 458,522
SUPPLEMENTAL DISCLOSURES OF CASH PAID YEAR-TO-DATE FOR:
INTEREST (NET OF CAPITALIZED INTEREST) $ 152,329 $ 232,643
INCOME TAXES (NET OF REFUNDS) $ 0 $ (190,574)
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. THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ARE PREPARED BY MANAGEMENT AND ARE UNAUDITED. 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, 2000.
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 DECEMBER 5, 1999 FINANCIAL STATEMENTS HAVE BEEN
RECLASSIFIED TO CONFORM WITH THE DECEMBER 3, 2000 PRESENTATION.
NOTE 2 - MAY 31, 2000
THE BALANCE SHEET AT MAY 31, 2000 HAS BEEN CONDENSED FROM THE AUDITED FINANCIAL
STATEMENTS AT THAT DATE.
NOTE 3 - 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 AND YEAR-TO-DATE PERIODS ENDED DECEMBER 3, 2000 AND
DECEMBER 5, 1999 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED
FOR THE FULL YEAR.
NOTE 4 - 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 5 - 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 THAT
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
DECEMBER 3, 2000 $4,368,480 WAS UNUSED OF THE $8,250,000 AVAILABLE UNDER THE
INSTRUMENT. AT DECEMBER 5, 1999 $2,599,546 WAS UNUSED OF THE $9,000,000
AVAILABLE UNDER THE INSTRUMENT. THE LOAN BEARS INTEREST AT OR BELOW SEAFIRST'S
PRIME RATE.
THE COMPANY ALSO HAD A TERM LOAN AGREEMENT WITH WHITEFISH CREDIT UNION FOR
FINANCING OF THE CONSTRUCTION OF A MIXED-USE CONDOMINIUM PROJECT. AT DECEMBER 5,
1999 THE BALANCE OF THE TERM LOAN WAS $464,750. DURING FISCAL YEAR ENDING MAY
31, 2000, THE LOAN WAS PAID IN FULL.
NOTE 6 - 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
SECOND QUARTERS OF 2000 AND 1999 AND YEAR TO DATE PERIODS THEN ENDED IS
SUMMARIZED AS FOLLOWS:
SKI AREA REAL ESTATE CONSOLIDATED
QUARTER ENDED 12/3/00
TOTAL REVENUE $417,353 $ 569,313 $ 986,666
OPERATING PROFIT (LOSS) $(1,185,604)$ (11,473) $ (1,197,077)
DEPRECIATION
AND AMORTIZATION $ 6,717 $ 5,074 $ 11,791
IDENTIFIABLE ASSETS $14,081,446 $ 3,767,186 $ 17,848,632
CAPITAL EXPENDITURES $ 0 $ 0 $ 0
QUARTER ENDED 12/5/99
TOTAL REVENUE $ 349,616 $ 1,041,984 $ 1,391,600
OPERATING PROFIT (LOSS) $(1,128,347)$ 523,841 $ (604,506)
DEPRECIATION
AND AMORTIZATION $ 6,698 $ 5,075 $ 11,773
IDENTIFIABLE ASSETS $15,129,331 $ 4,094,697 $ 19,224,028
CAPITAL EXPENDITURES $ 36,592 $ 0 $ 36,592
6/1/00 TO 12/3/00
TOTAL REVENUE $ 1,108,146 $ 1,884,694 $ 2,992,840
OPERATING PROFIT (LOSS) $(2,161,132)$ 849,122 $ (1,312,010)
DEPRECIATION
AND AMORTIZATION $ 15,329 $ 11,841 $ 27,170
IDENTIFIABLE ASSETS $14,081,446 $ 3,767,186 $ 17,848,632
CAPITAL EXPENDITURES $ 873,597 $ 0 $ 873,597
6/1/99 TO 12/5/99
TOTAL REVENUE $ 1,346,377 $ 1,862,034 $ 3,208,411
OPERATING PROFIT (LOSS) $(1,983,219)$ 884,488 $ (1,098,731)
DEPRECIATION
AND AMORTIZATION $ 15,246 $ 11,358 $ 26,604
IDENTIFIABLE ASSETS $15,129,331 $ 4,094,697 $ 19,224,028
CAPITAL EXPENDITURES $ 303,143 $ 0 $ 303,143
WINTER SPORTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
FOR THE PERIOD
6/ 1/00 6/ 1/99
TO TO
12/3/00 12/5/99
GROSS REVENUES $2,992,840 $ 3,208,411
NET LOSS $ (855,300) $ (815,331)
LOSS PER COMMON SHARE $ (0.85) $ (0.81)
TOTAL ASSETS $ 17,848,632 $ 19,224,028
LONG-TERM DEBT
LESS CURRENT PORTION $ 3,881,520 $ 6,811,302
RESULTS OF OPERATIONS, SECOND QUARTER AND YEAR-TO-DATE
REVENUES
REVENUES FOR THE SECOND QUARTER ENDING DECEMBER 3, 2000 WERE $986,666, A
DECREASE OF $404,934 OR 29% OVER THE SAME QUARTER OF THE PRIOR YEAR. THE
DECREASE IS DUE PRIMARILY TO REAL ESTATE SALES OF $544,000 COMPARED TO
$1,015,890 DURING THE SAME QUARTER LAST YEAR. THIS DECREASE IS DUE IN PART TO A
REDUCTION IN INVENTORY OF AVAILABLE REAL ESTATE PRODUCT, DUE TO STRONG SALES
DURING THE LAST TWELVE MONTHS. THE COMPANY IS CURRENTLY EVALUATING NEW PROJECTS
AND PLANS TO HAVE MORE REAL ESTATE DEVELOPMENT AVAILABLE FOR SALE WITHIN THE
NEXT EIGHT MONTHS.
FOOD AND BEVERAGE REVENUES WERE $16,099 FOR THE SECOND QUARTER OF 2001 COMPARED
TO $63,706 IN 2000. THIS DECREASE OF $47,607 OR 75% IS DUE TO A SHIFT IN
MANAGEMENT OF THE FOOD AND BEVERAGE OPERATIONS OF THE RESORT FROM THE REGISTRANT
TO A NATIONAL FOOD CONCESSIONAIRE. THIS IS ALSO RESPONSIBLE FOR THE INCREASE IN
LEASE, MANAGEMENT AND OTHER FEES OF $98,981 OVER THE PREVIOUS YEAR.
TOTAL REVENUES FOR THE YEAR ARE DOWN BY 7% FROM THE PREVIOUS YEAR DUE IN PART TO
A SUMMER SEASON IMPACTED BY THE PERCEIVED FIRE DANGER EXPERIENCED IN MONTANA.
THE SKI RESORT HAS ALSO EXPERIENCED LOWER THAN NORMAL SNOWFALL AMOUNTS DURING
THE FIRST TWO MONTHS OF THE SKI SEASON. EARLY SNOWMAKING HAS HELPED TO MAKE
SKIING CONDITIONS VERY GOOD DESPITE LESS ACCUMULATION OF NATURAL SNOW. IT
CANNOT BE DETERMINED AT THIS TIME WHETHER THIS WILL RESULT IN A DROP IN SKIER
VISITATION FOR THIS SEASON.
OPERATING EXPENSES
OPERATING COSTS AND EXPENSES INCREASED IN THE SECOND QUARTER BY $187,637 OR 9%
FROM THE PRIOR YEAR. THIS INCREASE IS DUE PARTLY TO AN INCREASE IN GENERAL AND
ADMINISTRATIVE COSTS OF 53% OVER THE SECOND QUARTER LAST YEAR. COSTS IN THIS
CATEGORY WHICH HAVE INCREASED ARE FUEL, UTILITIES AND OCCUPANCY EXPENSES DUE TO
NORMAL UP KEEP OF OUR FACILITIES AS THE BUILDINGS AGE. THE COST OF REAL ESTATE
SALES ROSE 12% OVER THE SECOND QUARTER OF 2000 DUE TO REAL ESTATE SALES OF
CONDOMINIUM PROPERTY VERSUS TOWN HOME AND SINGLE FAMILY LOTS. A DECREASE IN THE
COST OF FOOD, BEVERAGE & RETAIL OF 27.5% WAS DUE TO THE FOOD OPERATIONS UNDER A
MANAGEMENT AGREEMENT BY A THIRD PARTY OPERATOR THIS QUARTER COMPARED TO ONLY
PARTIAL OPERATION BY THE OPERATOR DURING THE SAME QUARTER LAST YEAR.
OTHER INCOME
OTHER INCOME IN THE SECOND QUARTER AND YEAR-TO-DATE FOR 2000 REFLECT REVENUES
EARNED FROM SALES OF TIMBER ON THE COMPANY'S BASE AREA LANDS. THE REVENUE
RECEIVED WAS OF A ONE-TIME NATURE, AS THE COMPANY DOES NOT EXPECT TO HARVEST ANY
MORE TIMBER IN THE NEAR FUTURE.
OTHER EXPENSES
INTEREST EXPENSE FOR THE QUARTER ENDED DECEMBER 3, 2000 WAS $58,607, A DECREASE
OF $57,842, OR 50% LOWER THAN THE SECOND QUARTER LAST YEAR. YEAR-TO-DATE
INTEREST EXPENSE FELL BY $121,514 OR 50%, DURING THE FIRST TWO QUARTERS OF 2001
VERSUS THE SAME TWO QUARTERS OF THE PRIOR YEAR. THESE DECREASES ARE DUE TO
LOWER LEVELS OF BORROWING ON THE COMPANY'S LINE OF CREDIT AND REPAYMENT OF THE
TERM LOAN.
THE SECOND QUARTER NET LOSS OF $753,168 WAS $356,187 OR 90% MORE THAN THE SAME
QUARTER LAST YEAR. THE YEAR TO DATE NET LOSS OF $855,300 WAS $39,969 OR 5% LESS
THAN DURING THE SAME TIME PERIOD LAST YEAR.
A LOSS FOR THIS INTERIM PERIOD IN ANY YEAR IS NOT NECESSARILY INDICATIVE OF THE
RESULTS TO BE EXPECTED FOR THE ENTIRE YEAR, BUT INSTEAD REFLECTS THE SEASONAL
NATURE OF THE COMPANY'S BUSINESS. THE COMPANY'S MAIN PERIODS OF BUSINESS ARE
FROM MID-NOVEMBER THROUGH MID-APRIL. HISTORICALLY, THE FIRST AND SECOND
QUARTERS, ESPECIALLY TAKEN INDIVIDUALLY, BEAR LITTLE COMPARATIVE VALUE.
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL OF $(1,684,665) AT THE END OF THE SECOND QUARTER OF FISCAL 2001
IMPROVED FROM WORKING CAPITAL OF $(1,844,424) AT DECEMBER 5, 1999. THE CHANGE
WAS DUE PRIMARILY TO AN INCREASE IN THE COMPANY'S ACCOUNTS RECEIVABLE AND
INVENTORIES IN PREPARATION FOR THE SKI SEASON.
DEPOSITS AND OTHER UNEARNED INCOME IS $171,061 HIGHER THAN AT THE END OF THE
SECOND QUARTER OF THE PRIOR YEAR. THE INCREASE IS DUE TO AN INCREASE IN THE
COMPANY'S SPECIAL REDUCED PRICE SEASON PASS PRODUCT. TOTAL LIABILITIES OF
$9,211,549 REPRESENTS 106% OF STOCKHOLDERS' EQUITY AT DECEMBER 3, 2000, DOWN
FROM $11,996,254 OR 166% OF STOCKHOLDERS' EQUITY AT DECEMBER 5, 1999.
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 WHICH
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 DECEMBER 3, 2000 THERE WAS
$3,881,520 BORROWED WITH $4,368,480 OF UNUSED CAPACITY ON THE $8,250,000 LINE OF
CREDIT. AT DECEMBER 5, 1999, THERE WAS $6,400,454 BORROWED WITH $2,599,546 OF
UNUSED CAPACITY ON THE $9,000,000 LINE OF CREDIT.
THE COMPANY'S BOARD OF DIRECTORS AUTHORIZED A STOCK REPURCHASE PROGRAM ON MAY
19, 2000. UNDER THIS PROGRAM THE COMPANY COULD REPURCHASE UP TO 40,000 SHARES
OF THE COMPANY'S OUTSTANDING COMMON STOCK AT PREVAILING MARKET PRICES FROM TIME
TO TIME OVER A SIX TO EIGHT MONTH TIME PERIOD. AS OF JANUARY 8, 2001, THE
COMPANY HAD REPURCHASED 18,700 SHARES UNDER THIS PROGRAM. OF THOSE 18,700
SHARES, 13,500 SHARES HAD NOT YET BEEN PRESENTED FOR CANCELLATION ON THE
COMPANY'S RECORDS. ON DECEMBER 20, 2000, THE COMPANY FILED FORM 8K TO ANNOUNCE
A CONTINUANCE OF THIS PROGRAM OVER AN ADDITIONAL SIX MONTHS.
MANAGEMENT HAS BEEN INVOLVED IN NEGOTIATIONS WITH SEVERAL REAL ESTATE DEVELOPERS
FOR ADDITIONAL DEVELOPMENT OF THE LANDS OWNED BY THE COMPANY. AT THIS TIME, NO
DECISION HAS BEEN MADE AS TO WHETHER TO USE A DEVELOPER OR CONTINUE DEVELOPING
THE LAND INTERNALLY.
THE COMPANY HAS OFFERED CERTAIN OWNERS OF REAL ESTATE PROPERTIES LOCATED WITHIN
THE VILLAGE CORE TO PURCHASE THEIR UNITS FROM THEM. THESE OFFERS ARE FOR A
LIMITED TIME PERIOD AND ARE SUBJECT TO CERTAIN DUE DILIGENCE PROCEDURES. THE
COMPANY PLANS TO OPERATE THE PROPERTIES AS THEY HAVE BEEN OPERATED IN THE PAST.
FORWARD-LOOKING STATEMENTS
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING MATTERS THAT ARE
SUBJECT TO RISKS AND UNCERTAINTIES. FOR SUCH STATEMENTS, THE COMPANY CLAIMS THE
PROTECTION OF THE SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS CONTAINED IN
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S
RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN EACH FORWARD-LOOKING
STATEMENT DUE TO VARIOUS FACTORS, WHICH ARE OUTSIDE THE COMPANY'S CONTROL.
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 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED
DECEMBER 3, 2000.
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: JANUARY 17, 2001 /S/MICHAEL J. COLLINS
MICHAEL J. COLLINS
PRESIDENT & CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
DATE: JANUARY 17, 2001 /S/JAMI M. PHILLIPS
JAMI M. PHILLIPS
CHIEF FINANCIAL OFFICER & TREASURER
(PRINCIPAL FINANCIAL OFFICER)
