<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1996
OR
[X] 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 0-1365
SCIOTO DOWNS, INC.
(Exact name of registrant as specified in its charter)
OHIO 31-4440550
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6000 SOUTH HIGH STREET, COLUMBUS, OHIO 43207
(Address of principal executive offices) (Zip Code)
(614) 491-2515
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) 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
and (2) has been subject to such filing requirements for the
past 90 days.
Yes X No _____
The number of common shares outstanding at ______________:
595,767, par value $1.05
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SCIOTO DOWNS, INC.
INDEX
<TABLE>
<CAPTION>
Pages
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets at January 31, 1996 (Unaudited), October 31, 1995,
and January 31, 1995 (Unaudited) 3-4
Statements of Operations for the three-month periods ended
January 31, 1996 and 1995 (Unaudited) 5
Statements of Cash Flows for the three-month periods ended
January 31, 1996 and 1995 (Unaudited) 6
Notes to the Financial Statements (Unaudited) 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 10
Exhibit 27 - Financial Data Schedule 11
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCIOTO DOWNS, INC.
BALANCE SHEETS
JANUARY 31, 1996 (UNAUDITED) AND 1995 (UNAUDITED) AND OCTOBER 31, 1995
<TABLE>
<CAPTION>
ASSETS JANUARY 31, OCTOBER 31, JANUARY 31,
1996 1995 1995
----------- ----------- -----------
(Unaudited) (Unaudited)
Current assets:
<S> <C> <C> <C>
Cash and cash equivalents $ 135,171 $ 787,786 $ 27,692
Accounts receivable 65,193 71,060 63,564
Prepaid expenses and other 89,550 77,950 131,905
Investment in joint venture 59,101 59,101 43,396
----------- ----------- -----------
Total current assets 349,015 995,897 266,557
----------- ----------- -----------
Property and equipment, at cost 19,123,743 19,078,911 18,832,258
Less accumulated depreciation 11,450,018 11,279,018 10,756,935
----------- ----------- -----------
Total property and equipment 7,673,725 7,799,893 8,075,323
Construction in progress 98,943
----------- ----------- -----------
7,673,725 7,799,893 8,174,266
----------- ----------- -----------
Total assets $ 8,022,740 $ 8,795,790 $ 8,440,823
=========== =========== ===========
</TABLE>
CONTINUED 3
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PART I. FINANCIAL INFORMATION
SCIOTO DOWNS, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY JANUARY 31, OCTOBER 31, JANUARY 31,
1996 1995 1995
----------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Current liabilities:
Accounts payable, trade $ 35,962 $ 167,392 $ 38,458
Dividends payable 29,789
----------- ----------- -----------
Current maturities, term debt 3,217,641 3,247,411 100,000
Deferred income taxes 4,449 11,880 22,520
Accrued expenses 159,971 208,715 162,184
----------- ----------- -----------
Total current liabilities 3,418,023 3,665,187 323,162
----------- ----------- -----------
Minimum pension liability 78,566 78,566 83,123
----------- ----------- -----------
Net deferred income taxes 11,295 180,864 94,032
----------- ----------- -----------
Term debt, net of current maturities 3,235,498
-----------
Stockholders' equity:
Common stock, $1.05 par value; issued and
outstanding, 595,767 shares 625,555 625,555 625,555
Capital in excess of par value 2,037,300 2,037,300 2,037,300
Retained earnings 1,891,476 2,247,793 2,083,186
Pension liability adjustment, net of taxes (39,475) (39,475) (41,033)
----------- ----------- -----------
Total stockholders' equity 4,514,856 4,871,173 4,705,008
----------- ----------- -----------
Total liabilities and stockholders' equity $ 8,022,740 $ 8,795,790 $ 8,440,823
=========== =========== ===========
</TABLE>
The accompanying notes are an intergral part of the financial statements. 4
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SCIOTO DOWNS, INC.
STATEMENTS OF OPERATIONS
for the three-month periods ended January 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Operating revenues, other $ 6,957 $ 4,852
--------- ---------
Operating expenses:
Salaries and wages 113,604 114,084
Depreciation 171,000 171,500
Other operating and general expense 198,184 192,701
--------- ---------
482,788 478,285
--------- ---------
Loss from operations (475,831) (473,433)
Net interest expense (57,486) (60,567)
--------- ---------
Loss before income tax benefit (533,317) (534,000)
Income tax benefit of operating loss (Note 3) 177,000 180,000
--------- ---------
Net loss $(356,317) $(354,000)
========= =========
Net loss per common share (Note 2) $ (.60) $ (.59)
========= =========
Weighted average common shares outstanding 595,767 595,767
========= =========
</TABLE>
The accompanying notes are an intergral part of the financial statements. 5
<PAGE> 6
SCIOTO DOWNS, INC.
STATEMENTS OF CASH FLOWS
for the three-month periods ended January 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
Cash flows used in operating activities:
<S> <C> <C>
Net loss $(356,317) $(354,000)
--------- ---------
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 179,736 180,236
Change in deferred income taxes (177,000) (180,000)
Cumulative effect of change in accounting for income taxes
Change in accounts receivable 5,867 (33,600)
Change in prepaid expenses and other (20,336) (19,637)
Change in accounts payable (131,430) (97,188)
Change in accrued expenses (48,744) (43,096)
--------- ---------
Total adjustments (191,907) (193,285)
--------- ---------
Net cash used in operating activities (548,224) (547,285)
--------- ---------
Cash flows used in investing activities:
Purchase of property and equipment (44,832) (52,602)
--------- ---------
Net cash used in investing activities (44,832) (52,602)
--------- ---------
Cash flows from financing activities:
Dividend paid (29,789) (29,789)
Payments on term debt (29,770) (27,717)
--------- ---------
Net cash used in financing activities (59,559) (57,506)
--------- ---------
Net decrease in cash and cash equivalents (652,615) (657,393)
Cash and cash equivalents, beginning of period 787,786 685,085
--------- ---------
Cash and cash equivalents, end of period $ 135,171 $ 27,692
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 56,866 $ 58,931
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements. 6
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SCIOTO DOWNS, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION:
The information furnished reflects all adjustments which are, in the
opinion of management, necessary to present a fair statement of the
results for the interim periods on a basis consistent with that of
prior periods.
The accompanying unaudited financial statements are presented in
accordance with the requirements of Form 10-Q and, consequently, do not
include all the disclosures normally required by generally accepted
accounting principles or those normally made in Scioto Downs' (the
Company) annual Form 10-K filing. All adjustments that are necessary
for a fair statement of results for the interim period are normal and
recurring. Reference should be made to the Company's 1995 Form 10-K for
additional disclosures, including a summary of the Company's accounting
policies.
2. LOSS PER SHARE:
Net loss per share is derived by dividing net loss by the weighted
average number of shares outstanding during the period.
3. INCOME TAXES:
A deferred income tax benefit of $177,000 was recognized during the
first quarter of 1996.
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and tax liabilities at January 31, 1996
are as follows:
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<S> <C>
Deferred tax liabilities arising from:
Depreciation $ 515,178
Other, net 7,713
---------
Total deferred tax liabilities $ 522,891
=========
Deferred tax assets arising from:
AMT credit/net operating loss
carryovers 586,599
Valuation allowance (99,775)
Pension liability adjustment 20,323
---------
Total deferred tax assets $ 507,147
=========
</TABLE>
7
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SCIOTO DOWNS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
January 31, 1996 Compared to October 31, 1995
Because of the seasonal nature of the business, the Company experiences net
operating losses during the first two quarters of the fiscal year. Additionally,
the Company utilizes the off-season to effect repairs and maintenance, as well
as facility improvements. During the first quarter of 1996, the Company
continued to service the debt on the new Clubhouse via internal funds.
Consequently, the liquidity and cash flow of the Company has been directly
affected by the renovation of the facilities.
The racing season at Scioto Downs annually falls within the third quarter ending
in July. The majority of rental income from leasing the racing facility to
Mid-America Racing Association is earned during the fourth quarter of the year,
ending in October.
THREE MONTHS ENDED JANUARY 31, 1996 COMPARED TO THREE MONTHS ENDED JANUARY 31,
1995
The loss before income tax benefit decreased by approximately $1,300. This
minimal change is due mainly to a stable environment in the first three months,
as the racing season does not begin until the third quarter. Maintenance,
utility and salary expense in the first quarter have remained relatively
constant compared to the first quarter in 1995.
8
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PART II. OTHER INFORMATION
SCIOTO DOWNS, INC.
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
(a) Exhibits 27 - Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
quarter ended January 31, 1996.
9
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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.
SCIOTO DOWNS, INC.
-------------------------------
Registrant
DATE: March 14, 1996 BY: /S/ ROBERT S. STEELE
---------------------- ----------------------------
Robert S. Steele, President
DATE: March 14, 1996 BY: /S/ TIMOTHY V. LUTHER
---------------------- ----------------------------
Timothy V. Luther, Controller
10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> JAN-31-1996
<EXCHANGE-RATE> 1
<CASH> 135,171
<SECURITIES> 0
<RECEIVABLES> 65,193
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 349,015
<PP&E> 19,123,743
<DEPRECIATION> 11,450,018
<TOTAL-ASSETS> 8,022,740
<CURRENT-LIABILITIES> 3,418,023
<BONDS> 0
0
0
<COMMON> 625,555
<OTHER-SE> 3,889,301
<TOTAL-LIABILITY-AND-EQUITY> 8,022,740
<SALES> 578
<TOTAL-REVENUES> 6,957
<CGS> 219
<TOTAL-COSTS> 482,788
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57,486
<INCOME-PRETAX> (533,317)
<INCOME-TAX> (177,000)
<INCOME-CONTINUING> (356,317)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (356,317)
<EPS-PRIMARY> (0.60)
<EPS-DILUTED> (0.60)
</TABLE>
