UNITED STATES
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 September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-1590
THE WESTWOOD GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-1983910
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization identification No.)
190 V.F.W. Parkway, Revere, Massachusetts 02151
(Address of principal executive offices) (Zip Code)
617-284-2600
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (l) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 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 November 14, 1996 343,210 shares of the Registrant's common
stock, par value $.01 per share and 912,015 shares of the
Registrant's Class B common stock, par value $.01 per
share, were outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE WESTWOOD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, December 31,
1996 1995
(Unaudited)
Current assets:
Cash $ 618,128 $ 450,987
Restricted cash 878,835 1,401,799
Accounts receivable 1,145,414 796,085
Prepaid expenses and other
current assets 428,303 270,685
Total current assets 3,070,680 2,919,556
Land 348,066 348,066
Buildings 19,653,991 19,397,281
Machinery and equipment 5,019,142 4,936,976
Leasehold improvements 10,777,472 10,694,678
35,798,671 35,377,001
Less: accumulated depreciation
and amortization (19,711,743) (18,765,247)
Net property, plant
and equipment 16,086,928 16,611,754
Other assets:
Goodwill, less accumulated
amortization of $ 348,000
and $240,000 372,000 480,000
Investment in
unconsolidated subsidiary 4,887,932 4,901,401
Accounts receivable
from officers, employees
and related party 331,644 318,005
Other assets, less accumulated
amortization of $965,716 and
$818,614 235,879 376,909
Total other assets 5,827,455 6,076,315
Total assets $24,985,063 $25,607,625
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
THE WESTWOOD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' DEFICIT
September 30, December 31,
1996 1995 *
(Unaudited)
Current liabilities:
Current portion of
long-term debt $ 939,949 $5,853,754
Long-term obligations
in default 5,878,709 1,751,235
Subordinated notes payable 285,000 285,000
Accounts payable and
other accrued expenses 14,891,952 14,388,952
Outstanding pari-mutuel
tickets 1,609,153 1,120,334
Total current liabilities 23,604,763 23,399,275
Long-term debt,
less current maturities 5,258,122 5,773,651
Other long-term liabilities 1,006,071 1,347,425
Total liabilities 29,868,956 30,520,351
Commitments and contingencies
Stockholders' deficit:
Common Stock, $.01 par value;
Authorized 5,000,000 shares
1,936,409 shares issued and
outstanding 19,364 19,364
Class B Common stock,
$.01 par value;
Authorized 5,000,000 shares;
912,615 shares issued and
outstanding 9,126 9,126
Additional paid-in capital 13,355,355 13,355,355
Accumulated deficit ( 9,969,430) (10,009,155)
Note receivable from
related party ( 326,965) ( 316,073)
Minimum pension
liability adjustment ( 6,561) ( 6,561)
Less cost of 1,593,199
common and 600
class B common
shares in treasury ( 7,964,782) (7,964,782)
Total stockholders' deficit ( 4,883,893) (4,912,726)
Total liabilities, minority
interest and stockholders'
deficit $24,985,063 $25,607,625
The accompanying notes are an integral part of these
consolidated financial statements.
* Reclassified for comparative purposes
<PAGE>
THE WESTWOOD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended September 30, l996 and l995
(Unaudited)
1996 1995 *
Operating revenue:
Parimutuel commissions $ 7,745,942 $ 7,823,253
Concessions 839,232 845,283
Other operating 580,279 584,922
Total operating revenue 9,165,453 9,253,458
Operating expenses:
Wages, taxes and benefits 2,620,627 2,892,077
Purses 2,679,257 2,582,920
Cost of food and beverage 288,536 402,755
Administrative, general
and operating 2,999,575 2,871,694
Depreciation and amortization 405,972 413,860
Total operating expenses 8,993,967 9,163,306
Income from operations 171,486 90,152
Other income/(expenses):
Interest expense ( 156,910) ( 306,367)
Equity income in
unconsolidated subsidiary 13,431 4,879
Other income 88,333 88,334
( 55,146) ( 213,154)
Income (loss) before
provision for income taxes 116,340 ( 123,002)
Provision for income tax - -
Net income (loss) $ 116,340 $( 123,042)
Net income (loss) per share $ .09 $( .10)
Weighted average common
shares outstanding 1,255,225 1,255,225
The accompanying notes are an integral part of these consolidated
financial statements.
* Reclassified for comparative purposes
<PAGE>
THE WESTWOOD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the nine months ended September 30, l996 and l995
(Unaudited)
1996 1995 *
Operating revenue:
Parimutuel commissions $ 21,044,063 $21,131,400
Concessions 2,229,499 2,280,318
Other operating 1,783,135 1,748,834
Total operating revenue 25,056,697 25,160,552
Operating expenses:
Wages, taxes and benefits 7,539,231 7,949,587
Purses 6,722,293 6,597,902
Cost of food and beverage 796,780 892,230
Administrative, general
and operating 8,405,525 8,852,685
Depreciation and amortization 1,210,907 1,223,841
Total operating expenses 24,674,736 25,516,245
Income (loss) from
operations 381,961 ( 355,693)
Other income/(expenses):
Interest expense, net ( 593,767) ( 674,062)
Equity income (loss) in
unconsolidated subsidiary ( 13,469) ( 60,611)
Other income 265,000 265,000
( 342,236) ( 469,673)
Income, (loss) before provision
for income taxes 39,725 ( 825,366)
Provision for income tax - -
Net income (loss) $ 39,725 $( 825,366)
Net income, (loss) per share $ .03 $( .66)
Weighted average common
shares outstanding 1,255,225 1,255,225
The accompanying notes are an integral part of these consolidated
financial statements.
*Reclassified for comparative purposes
<PAGE>
THE WESTWOOD GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT)
for the periods ended 1996, 1995 and 1994
Class B Additional
Common Common Paid-In Accumulated
Stock Stock Capital (Deficit)
Balance, December 31,
1994 $19,364 $9,126 $13,355,355 $(7,954,721)
Net loss - - - (2,054,434)
Interest receivable - - -
Minimum pension
liability adj. - - - -
Balance, December 31,
1995 19,364 9,126 13,355,355 (10,009,155)
Net income - - - 39,725
Interest receivable - - -
Balance, September
30, 1996 $19,364 $9,126 $13,355,355 $( 9,969,430)
<PAGE>
THE WESTWOOD GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT)
for the periods ended 1996, 1995 and 1994
(continued)
Minimum
Note Receivable Pension Total
From Related Liability Treasury Stockholders'
Party Adj. Stock Equity(Deficit)
Balance, December 31,
1994 $(301,551) $( 115,182) $(7,964,782) $ ( 2,952,391)
Net loss - - - ( 2,054,434)
Interest
receivable( 14,522) - - ( 14,522)
Minimum pension
liability adj. 108,621 - 108,621
Balance, December 31,
1995 (316,073) ( 6,561) (7,964,782) ( 4,912,726)
Net income - - - 39,725
Interest
receivable( 10,892) - - ( 10,892)
Balance, September
30, 1996 $(326,965) $( 6,561) $(7,964,782) $( 4,883,893)
<PAGE>
THE WESTWOOD GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996 and l995
(Unaudited)
1996 1995
Cash Flows From Operating Activities:
Net income (loss) $ 39,725 $( 825,366)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities -
Depreciation and amortization 1,210,907 1,223,841
Equity in loss of
unconsolidated subsidiary 13,469 60,611
Deferred revenue ( 265,000) ( 265,000)
Amortization of note ( 118,825) ( 118,823)
Changes in operating assets
and liabilities -
Restricted Cash 522,964 ( 73,163)
Receivables ( 349,329) ( 689,572)
Prepaid expenses
and other current assets ( 157,618) 169,019
Other assets ( 39,912) 98,279
Accounts payable
and other accrued
liabilities, including
interest and taxes 503,000 660,636
Outstanding pari-mutuel tickets 488,820 207,089
Other long-term liabilities ( 76,354) ( 101,955)
Total adjustments 1,732,122 1,170,962
Net cash provided by
operating activities 1,771,847 345,596
Cash Flows From Investing Activities:
Additions to property,
plant and equipment ( 421,670) ( 350,499)
Net cash used in investing
activities ( 421,670) ( 350,499)
Cash Flows From Financing Activities:
Proceeds from long-term debt 300,000 -
Principal payments of debt (1,483,036) ( 576,742)
Net cash (used in)
financing activities (1,183,036) ( 576,742)
Net increase, (decrease) in cash 167,141 ( 581,645)
Cash at beginning of period 450,987 812,424
Cash at end of period $ 618,128 $ 230,779
Supplemental Disclosures of Cash
Flow Information:
Cash paid during the period for-
Interest: $ 716,394 $ 542,878
Income taxes $ 32,000 $ 114,892
The accompanying notes are an integral part of these consolidated
condensed financial statements.
<PAGE>
THE WESTWOOD GROUP INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Unaudited)
1. Summary of Significant Accounting Policies
Interim Results
In the opinion of management, the accompanying
unaudited consolidated financial statements contain all
adjustments (consisting of normal recurring accruals and
deferrals) necessary to present fairly the Company's consolidated
financial position as of September 30, 1996, and the results of
its operations for the three months and nine months ended
September 30, 1996 and 1995 and the statement of cash flows for
the nine months ended September 30, 1996 and 1995. See the
Company's Annual Report on Form 10-K for a summary of the
significant accounting policies applied in the preparation of the
accompanying consolidated financial statements.
Principles of Consolidation
The accompanying consolidated financial statements as
of, and for the three and nine months ended, September 30, 1996
and 1995 include the accounts of the Company and its wholly-owned
subsidiaries.
Financial Statements for the Year Ended December 31, 1995
The consolidated balance sheet at December 31, 1995 is
presented for comparative purposes and was taken from the audited
consolidated financial statements for the year ended December 31,
1995. Certain prior year amounts have been reclassified to
conform with current period presentation.
Debt
Long-term obligations which are in default have been
classified as current liabilities. See Note 3 for debt defaults.
<PAGE>
Income (Loss) per Common Share
Income (loss) per share amounts are based on the
weighted average number of common and Class B common shares and
common share equivalents outstanding (if dilutive) during each
period. Common share equivalents consist of dilutive stock
options and warrants under the treasury stock method.
2. Results of Operations and Management's Plans
The Company's consolidated condensed financial
statements have been prepared on the basis that it will be able
to continue in existence. The Company had a consolidated net
loss of approximately $825,000 in the nine months ended September
30, 1995. For the nine months ended September 30, 1996, the
Company had net income of approximately $39,000. The results
from operations for each of the nine month periods ended
September 30, 1995 and 1996 include a non cash charge for
depreciation and amortization of approximately $1,200,000.
For the period beginning in November 1992 through
February 1995, the Company engaged the professional services of a
corporate advisor (the "Advisor") to assist management in the
planning and execution of a corporate reorganization. Subsequent
to their engagement, the Company restructured its finance and
accounting management personnel, who continued and enhanced the
financial strategies undertaken by the restructuring team.
These activities included; managing the Company within its cash
constraints, including the creation of a cash flow forecasting
system, developing an immediate short-term cost reduction and
cash generation program, reorganizing operations and
renegotiating certain service contracts and agreements in order
to achieve operational efficiencies, negotiating with existing
and potential lenders and creditors in an effort to restructure
the Company's debt and to secure new sources of capital (See Note
3).
<PAGE>
3. Debt
In June l993, the Company defaulted on its obligation
under a non-recourse promissory note (the "Promissory Note")
which was collateralized by a second mortgage on a building owned
by the Company. The Promissory Note, which matured in June 1993,
required a combined payment of principal and interest totalling
$400,000 and this balance is included in long-term obligations in
default at September 30, 1996. In October, 1996, the second
mortgagee proceeded with a foreclosure sale which effectively
sold their interest in the building to an independent
third party. These foreclosure proceeding and subsequent sale
resulted in a technical default on the first mortgage described
in the following paragraph.
In October 1994, the Company entered into a Loan
Restructuring Agreement with the Mortgagee of property located at
284 Newbury St. The new agreement ("Loan Restructure Agreement")
reduced the principal amount from approximately $4.5 million to
$4.1 million and released outstanding interest of approximately
$400,000. In consideration of the above, the Company has
assigned all of the rents it receives from BBRG to the Mortgagee.
The Loan Restructure Agreement required interest only payments
through Maturity on September 1, 1998. Interest charged at 5.50%
thru October 1995 and 8.29% thereafter.
As part of the Loan Restructure Agreement, the Company
maintains a non-recourse guarantee in the amount of $400,000,
which is collateralized by 30,000 of the Company's shares of
BBRG. The guarantee is reduced by $50,000 per year for three
years beginning March 1996. In addition, the Company has pledged
15,000 of its BBRG shares to the Mortgagee as indemnification
against past due real estate taxes owed to the City of Boston.
Such shares will be released to the Company on a pro-rata basis
as the past due real estate taxes are satisfied. The
Company is amortizing the interest forgiven over the term of the
new note.
Due to the foreclosure of the second mortgage position
and technical default on the first mortgage described above, the
first mortgagee has enacted foreclosure proceedings. The effect
of these proceedings would be a sale of the related building at
foreclosure. The Company anticipates that these foreclosure
proceedings and related sales will result in loss of control of
the building and elimination of related debt. These transactions
are expected to result in a net gain. The Company is unsure of
the status of the shares of BBRG currently held as collateral on
the non-recourse guarantee.
<PAGE>
The outstanding balance included in long term
obligation in default at September 30, 1996 is $4,400,237.
In May 1994, the Company settled certain litigation
regarding the Creditor Trust Agreement and entered into a
Settlement Agreement of approximately $2.2 million. Under the
Settlement Agreement, the balance was divided into two
non-interest bearing notes.
The first note included a principal balance of $200,000
and four equal monthly installments through September 15, 1994,
which was paid in full. The second note included a principal
balance of $2 million, and requires minimum quarterly payments of
$105,000 in 1994, $145,000 in 1995, $150,000 in 1996 and $230,000
through maturity in September 1997. The Company has pledged 100%
of the distributions of the Foxboro Park Capital Improvement
Trust Funds as payment towards these amounts. The Company has not
made the minimum quarterly payments in 1996 and is currently in
default of this obligation. All distributions of the Foxboro
Park Capital Improvements Trust Fund have been paid towards this
obligation and the Company has received a verbal commitment to
restructure the agreement requiring the minimum payments
to equal distributions from the Foxboro Park Capital Improvement
Trust Funds. The outstanding balance included in long-term
obligations in default at September 30, 1996 is $1,078,472.
In December 1994, the Company entered into an amended
loan agreement restructuring a $4.5 million term loan agreement
dated November 1993. The new agreement was divided into two new
notes. The first note included a principal balance of $1.0
million which was paid in full. The second note in the amount of
$3.5 million was renewed on September 13, 1996, with an extension
of terms through January 31, 1998. The terms of the renewal
require monthly principal and interest payments of $42,298 with
interest at 11% through January 31, 1998. In addition, the
principal balance was reduced through the payment of funds
previously held in escrow of $534,000. The outstanding balance
included in long term debt at September 30, 1996 is $2,701,227.
In March 1995, the Company and the bank reached an
agreement to restructure a $2,000,000 Term Note which was in
default at December 31, 1994. The agreement became effective in
April 1995. The terms provide for the pledge of 401,000 shares
of BBRG common stock, (the "Collateral") and for the maintenance
of a loan to collateral value ratio of 75%.
<PAGE>
In March 1995, the loan to collateral value ratio fell
below 75% and the Company has provided additional collateral
through a second mortgage on certain real property. The Company
is in compliance with all other terms of the note and has made
all required payments. The Company renewed the loan agreement
on September 13, 1996, with an extension of terms through January
31, 1998. The terms of the renewal require monthly payments of
principal of $16,000 plus interest at 10% through January 31,
1998. The outstanding balance included in long-term debt as
of September 30, 1996 is $1,792,000.
Included in the current portion of long term debt is
outstanding indebtedness under a margin agreement of
approximately $113,152 at September 30, 1996. The indebtedness
is collateralized by 88,000 shares of BBRG common stock.
In April 1995, the Company reached an agreement to
modify and extend a 5% Promissory Note in the amount of $110,000.
The terms of the new agreement require sixty (60) monthly
payments of principal and interest of $2,003. The annual
interest rate is 7.5%, but is increased to 12% in the event of a
default. The outstanding balance included in long term debt at
September 30, 1996 is $72,081.
In May 1995, the Company reached an agreement with a
related party to restructure a 6% Promissory Note (the "Note") in
the amount of $318,000. The terms provided for the pledge of an
additional 60,000 shares of BBRG common stock. The terms also
provide for principal payments, plus interest at 3/4 of 1% per
month, of $9,000 per month until April 1996 and $12,000 per
month from May 1996 until maturity in November 1996. In November
of 1996, the Company negotiated an extension of terms through
October 18, 1997. The outstanding balance included in
long-term debt at September 30, 1996 is $156,000.
In December 1994, as part of the agreement to sell land
owned collectively by the Company and the Revere Realty Group,
Inc., the Company was loaned $300,000 evidenced by a promissory
Note and Second Mortgage. In conjunction with the loan, a
portion of the sales price in the amount of $300,000 was
contingent upon the buyer obtaining certain permits for
construction. The proceeds from this contingent
payment are to be used to extinguish the obligation on the
related loan. During August 1995, the buyer received the
applicable permits and on November 4, 1996, the Mortgage was
discharged. The effect of the discharge will be reflected in the
fourth quarter of 1996.
<PAGE>
In May 1994, the Company entered into an agreement with
BBRG to transfer the operations under the Concessions Agreement
and the Management Agreement to the Company in return for a six
year term note in the amount of $970,000. In April 1995 the Note
was amended requiring equal quarterly payments of principal and
interest beginning April 1, 1996 of approximately $36,000 with
interest at 6%. On June 4, 1996, the Note was amended extending
payment terms requiring the quarterly payments to begin on April
1, 1998. The outstanding balance included in long term debt at
September 30, 1996 is $970,000.
In January 1996, the Company entered into a short term
borrowing arrangement in the form of a Note Payable in the amount
of $300,000. The note required 16 weekly payments commencing
January 21, 1996 of $19,119.91 including principal and interest
at 12%. The balance was paid in full during 1996.
4. Contingencies
On October 3, 1996, Foxboro Realty Associates, LLC,
Foxboro Stadium Associates Limited Partnership, and New England
Patriots, L.P. filed a complaint against Foxboro Park, Inc.,
Foxboro Harness Inc., and The Westwood Group Inc. (collectively
"Foxboro Park") in Norfolk Superior Court in Massachusetts. The
complaint seeks a declaratory judgment with respect to the right
to occupy the Foxboro Raceway, as well as specific performance of
an agreement relating to the use of hospitality facilities at the
Raceway.
On October 8, 1996, Foxboro Park filed an answer to the
complaint which assert that Foxboro Park has a long-term right to
occupy the Raceway and is entitled to substantial monetary
damages. On that day, Foxboro Park filed a related complaint in
Norfolk Superior Court Against Robert K. Kraft, Foxboro Realty
Associates LLC, New Foxboro Corp., and Thomas L. Aronson and
moved to consolidate that case with the earlier filed case.
Foxboro Park also moved to add Robert K. Kraft as a
party defendant to the counterclaims in the earlier case.
On November 17, 1996, Foxboro Realty Associates LLC
filed a summary process complaint against The Westwood Group,
Inc. Foxboro Park, Inc. and Foxboro Harness, Inc. in Norfolk
Superior Court. This complaint seeks to evict The Westwood
Group, Inc., Foxboro Park, Inc., and Foxboro Harness, Inc. from
the Foxboro Raceway. On November 18, 1996, Foxboro Park, Inc.
filed an answer asserting numerous defenses and counterclaims
against Foxboro Realty Associates LLC and moved to consolidate
this case with the first action.
<PAGE>
No trial date on any of the actions has been set by
Court. Foxboro Park intends to vigorously contest the claims
asserted against it and related parties Foxboro Harness, Inc. and
the Westwood Group, Inc. and to fully prosecute its affirmative
claims against Foxboro Realty Associates, LLC and related
parties. No liabilities relating to these actions are probable
or reasonably estimateable and as such no further adjustments
were reflected in the financial statements as of September 30,
1996.
5. Investment in Affiliate
The following unaudited financial information
summarizes the financial position and results of operations of
BBRG, as of and for the periods ended 1996 and 1995. The
Company's investment in BBRG is accounted for under the equity
method.
Financial Information September 29, December 31,
(In thousands) 1996 1995
Balance sheet data
Current assets $ 3,179 $ 5,236
Noncurrent assets 40,915 40,864
Current liabilities 12,467 13,363
Noncurrent liabilities 6,977 8,010
Net equity 24,650 24,727
39 weeks ended
September 29, September 24,
1996 1995
Earnings data
Net sales $63,824 $67,587
Gross profit 24,884 26,536
Net income (loss) ( 83) ( 325)
Company's equity in net
(loss) of BBRG $( 13) $( 60)
The Company maintained and operated its restaurant and
concession facilities at Wonderland through BBRG, pursuant to a
concessions agreement (the "Concessions Agreement") which became
effective in 1992. The Company entered into an agreement with
BBRG to transfer the operations under the Concessions Agreement
which became effective on May 2, 1994.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Three months ended September 30, 1996 compared to three months
ended September 30, 1995
Wonderland Park
The table below illustrates certain key statistics for
Wonderland Park, the Company's greyhound racing operation, for
the three months ended September 30, 1996 and l995.
1996 1995
Live performances 117 132
Simulcast days 92 91
Parimutuel handle (thousands)
Live-on track $12,474 $17,181
Live-simulcast 9,564 8,279
Guest-simulcast 13,050 13,150
Total $35,088 $38,610
Total attendance 145,297 174,558
Average per capita wagering $ 176 $ 174
Foxboro Park
The table below presents certain key statistics for
Foxboro Park for the three months ended September 30, 1996 and
l995.
1996 1995
Total live performances 60 55
Total simulcast days 89 90
Parimutuel handle (thousands)
Live-on track $ 2,589 $ 2,711
Live-off track 13,560 7,518
Guest-simulcast 14,632 16,073
Total $30,781 $26,302
Total attendance 69,483 78,324
Average per capita wagering $ 250 $ 240
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Nine months ended September 30, 1996 compared to nine months
ended September 30, 1995
Wonderland Park
The table below illustrates certain key statistics for
Wonderland Park, the Company's greyhound racing operation, for
the nine months ended September 30, 1996 and l995.
1996 1995
Live performances 342 392
Simulcast days 273 272
Parimutuel handle (thousands)
Live-on track $35,830 $ 49,970
Live-simulcast 18,881 22,227
Guest-simulcast 40,163 39,262
Total $94,874 $111,459
Total attendance 413,795 507,122
Average per capita wagering $ 184 $ 176
Foxboro Park
The table below presents certain key statistics for
Foxboro Park for the nine months ended September 30, 1996 and
l995.
1996 1995
Total live performances 121 96
Total simulcast days 269 268
Parimutuel handle (thousands)
Live-on track $ 5,365 $ 5,568
Live-off track 26,403 14,035
Guest-simulcast 37,927 36,831
Total $69,695 $ 56,434
Total attendance 190,167 194,154
Average per capita wagering $ 228 $ 219
<PAGE>
Operating Revenue
Revenue from parimutuel commissions decreased to $7.7
million for the three months ended September 30, 1996 compared to
$7.8 million for the three months ended September 30, 1995. This
decrease is attributable to the decrease in Live Handle at
Wonderland Park of $4.7 million as a result of a reduction in the
number of live performances from 132 in 1995 to 117 in 1996.
Wonderland eliminated the less profitable Thursday Matinee
performance and increased the number of races on Friday and
Saturday Evening in an effort to maximize profit margins. In
addition, many performance were lost due to unsafe weather
conditions. This decrease in revenues at Wonderland was offset
by an increase in Live- Simulcast Handle at Foxboro Park of over
$6 million, from the comparable three months in 1995. Foxboro
Park continues a strong marketing effort to sell its signal to
premier Thoroughbred and Harness facilities throughout
the country, which has resulted in an increase in revenues.
As Foxboro Park has been able to find new and expanded
markets for its simulcast signal, it has been able to stabilize
parimutuel revenues for the three months ended September 30,
1996. Parimutuel commission at Foxboro was $3.22 million for the
three months ended September 30, 1996 consistent with the three
months ended on September 30, 1995 of $3.21 million
In addition, Wonderland Park has been able to stabilize the
effect of its decreased Handle by adjusting to a more favorable
take out structure. As such, Parimutuel commissions at
Wonderland Park has decreased only slightly for the three months
ended September 30, 1996 to $4.525 million compared $4.620
million for the three months ended September 30, 1995.
This trend is consistent for the nine months ending
September 30, 1996, as the Company has been able to stabilize
racing revenues by expanding the markets available to Foxboro
Park and increasing the take out percentage at Wonderland Park.
As Wonderland Park has noticed a decrease in Live Handle of $14.1
Million for the nine months ended September 30, 1996 with Live
Handle at $35.8 Million compared to the nine months ended
September 30, 1995 at $49.9. However, Wonderland has been able
to stabilize revenues with a decrease in parimutuel commissions
of only approximately $700,000 to parimutuel commission of $13.05
Million for the nine months ended September 30, 1996 from $13.75
Million for the comparable period in 1995. Foxboro Park has seen
an increase in parimutuel commissions from 1995 of $613,000 to
$7.985 million for the nine months ended September 30, 1996
compared to $7.372 million for the nine months ended September
30, 1995.
<PAGE>
Parimutuel commission for the nine months ended September
30, 1996 included approximately $279,400 deposited each into the
Greyhound Promotional Trust Fund and the Greyhound Capital
Improvements Trust Fund. Additionally, revenue for this period
includes approximately $107,355 deposited into the Harness and
Thoroughbred Promotional Trust Funds combined and $318,375
deposited into the Harness and Thoroughbred Capital
Improvement Trust funds combined. These funds are dedicated to
reimbursement of promotional expenses and capital improvements,
respectively, incurred by Wonderland Park and Foxboro Park.
Concessions revenue remained consistent for the nine months
ended September 30, 1996 from 1995 at approximately $2.2 million.
This level of consistent revenues is encouraging given the
inclement weather and reduction in attendance. These results
were attributable to better product offerings and an increased
effort by management to improve customer service and
satisfaction.
Other operating revenues consist of programs, admissions,
parking, lottery and other revenue directly related to the racing
performances. Other operating revenues increased by
approximately $40,000 for the nine months ended September 30,
1996 compared to 1995.
Operating Expenses
Operating expenses of $8.9 Million for the three months
ended September 30, 1996 decreased by approximately $300,000 from
$9.2 Million for the three months ended September 30, 1995. This
decrease is attributable to a decrease in wages, taxes and
benefits expense of $272,000 as a result of managements efforts
to improve efficiency. In addition, the reduction in the number
of performances at Wonderland Park with the elimination of the
Thursday Matinee resulted in a reduction of wages and related e
expenses. This reduction was a direct result of managements
efforts toward cost containment. These savings led to a
decrease in operating expenses to $24.67 Million for the nine
months ended September 30, 1996 from $25.56 Million in 1995.
<PAGE>
Interest Expense
Interest expense decreased to approximately $156,000 in the
three months ended September 30, 1996, from $306,000 in the three
months ended September 30, 1995.
Depreciation and Amortization
Depreciation and amortization has remained consistent
between years and any fluctuation is attributable to the purchase
of fixed asset additions. The Company continues to replace
capital items as they become obsolete. Depreciation and
amortization are expensed on a straight line basis over the
estimated life of the asset.
Other Income
Other income of approximately $88,333 for the three months
ended September 30, 1996 and $265,000 for the nine months ended
September 30, 1996 is attributable to the amortization of
deferred revenue related to advances made to the Company by a
vendor in consideration of the exclusive right to supply
specified equipment to Wonderland and Foxboro.
Liquidity and Capital Resources
Historically, the Company's primary sources of capital to
finance its businesses have been its cash flow from operations
and credit facilities. The Company's capital needs are primarily
for the maintenance and enhancement of the racing facilities at
Wonderland Park and Foxboro Park, and for debt service
requirements, including those relating to debt incurred in
connection with capital expenditures at Foxboro Park during
l992.
Racing Operations
In order to meet the requirements for renewal of racing
licenses in 1997, the Company's racing subsidiaries must
demonstrate that they are financially stable entities, capable of
disposing of their obligations on a timely basis. The Company
has been issued a racing license for each facility through the
1997 racing season. The Company must apply annually for the
racing license for the following year and as such there can be no
assurance that the Racing Commission will continue to grant
licenses to conduct racing on the schedules presently
maintained at Wonderland and Foxboro Park.
<PAGE>
PART II - OTHER INFORMATION
Item l. Legal Proceedings
On October 3, 1996, Foxboro Realty Associates, LLC,
Foxboro Stadium Associates Limited Partnership, and New England
Patriots, L.P. filed a complaint against Foxboro Park, Inc.,
Foxboro Harness Inc., and The Westwood Group Inc. (collectively
"Foxboro Park") in Norfolk Superior Court in Massachusetts. The
complaint seeks a declaratory judgment with respect to the right
to occupy the Foxboro Raceway, as well as specific performance of
an agreement relating to the use of hospitality facilities at the
Raceway.
On October 8, 1996, Foxboro Park filed an answer to the
complaint which assert that Foxboro Park has a long-term right to
occupy the Raceway and is entitled to substantial monetary
damages. On that day, Foxboro Park filed a related complaint in
Norfolk Superior Court Against Robert K. Kraft, Foxboro Realty
Associates LLC, New Foxboro Corp., and Thomas L. Aronson and
moved to consolidate that case with the earlier filed case.
Foxboro Park also moved to add Robert K. Kraft as a party
defendant to the counterclaims in the earlier case.
On November 17, 1996, Foxboro Realty Associates LLC
filed a summary process complaint against The Westwood Group,
Inc. Foxboro Park, Inc. and Foxboro Harness, Inc. in Norfolk
Superior Court. This complaint seeks to evict The Westwood
Group, Inc., Foxboro Park, Inc., and Foxboro Harness, Inc. from
the Foxboro Raceway. On November 18, 1996, Foxboro Park, Inc.
filed an answer asserting numerous defenses and counterclaims
against Foxboro Realty Associates LLC and moved to consolidate
this case with the first action.
No trial date on any of the actions has been set by
Court. Foxboro Park intends to vigorously contest the claims
asserted against it and related parties Foxboro Harness, Inc. and
the Westwood Group, Inc. and to fully prosecute its affirmative
claims against Foxboro Realty Associates, LLC and related
parties.
<PAGE>
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
(a) Exhibits
27.00 Financial data schedules.
(b) Reports on Form 8-K.
None.
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act
of l934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
THE WESTWOOD GROUP, INC.
Date November 20, 1996 /s/ Richard P. Dalton
Richard P. Dalton
President
Date November 20, 1996 /s/ Richard G. Egan, Jr.
Richard G. Egan, Jr.
Chief Financial Officer,
Treasurer
Date November 20, 1996 /s/ Anthony V. Boschetto
Anthony V. Boschetto
Controller
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