FORM 10-QSB/A
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
(Mark One)
Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended March 31, 1996
Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ____________ to ______________
Commission file number 0-22582
NASHVILLE COUNTRY CLUB, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Tennessee 62-1535897
(State or Other Jurisdiction of I.R.S. Employer Identification Number
Incorporation or Organization)
402 Heritage Plantation Way, Hickory Valley, Tennessee 38042
(Address of Principal Executive Offices)
(901) 764-2300
(Issuer's Telephone Number, Including Area Code)
Not applicable
(Former Name, Former Address and Former Fiscal Year, if
Changed Since Last Report)
Check whether the Registrant: (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
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
As of March 31, 1996, the Registrant had outstanding 1,470,000 shares
of Common Stock, no par value per share.
Transitional Small Business Disclosure Format (check one)
Yes No X
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Table of Contents
PART I: Financial Information
Item 1: Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flow 5
Notes to Consolidated Financial Statements 7
Item 2: Management's Discussion and Analysis or Plan of Operation 9
PART II: Other Information
Signature 11
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Part I
Financial Information
Item 1. Financial statements
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Pro Forma
(See Note B)
March 31, March 31,
1996 1996 December 31
(Unaudited) (Unaudited) 1995
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 5,454,759 $ 55,592 $ 235,711
Accounts receivable 914,219 25,074 -
Inventories 417,511 120,909 120,554
Prepaid expenses and other 165,762 27,375 7,190
Current assets
Total current assets 6,952,251 228,950 363,455
Property, plant, and
equipment, at cost
Land 12,827,521 800,000 800,000
Buildings and improvements 15,965,351 1,352,547 1,351,439
Furniture, fixtures,
restaurant equipment, and
other equipment 1,940,291 509,691 508,495
30,733,163 2,662,238 2,659,934
Less accumulated
depreciation and
amortization (158,307) (158,307) (129,202)
30,574,856 2,503,931 2,530,732
Other assets
Other assets and
intangibles 2,577,475 277,475 138,412
Deferred offering and
resort acquisition costs - 956,202 -
Total assets $ 40,104,582 $ 3,966,558 $ 3,032,599
Current liabilities
Notes payable $ 565,000 $ 300,000 $ 250,000
Accounts payable 1,460,079 1,134,729 138,595
Accrued expenses 2,912,621 103,330 116,046
Total current liabilities 4,937,700 1,538,059 504,641
Capital lease obligation 733,000 733,000 733,000
Long-term debt 20,350,756 - -
Stockholders' equity
Preferred stock, no par
value; authorized 1,000,000
shares, 334,285 of Series A
convertible preferred stock
issued and outstanding,
$10,029 liquidation
preference 10,000 10,000 10,000
Common stock, no par value;
authorized 20,000,000
shares, 1,470,000 shares
issued and outstanding;
4,287,525 shares issued and
outstanding pro forma 15,612,374 3,224,747 3,224,747
Accumulated deficit (1,539,248) (1,539,248) (1,439,789)
Total stockholders'
equity 14,083,126 1,695,499 1,794,958
Total liabilities and
stockholders' equity $ 40,104,582 $ 3,966,558 $ 3,032,599
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Pro Forma (See Note B)
Three Months
Three Months Ended Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenue
Room $ - $ - $ 5,120,975 $ 4,074,343
Food and beverage 505,261 545,227 2,616,213 2,295,335
Commercial leasing - - 549,907 549,165
Other 9,981 - 1,084,766 291,944
Total revenue 515,242 545,227 9,371,861 7,210,787
Departmental expenses
Rooms - - 2,916,147 2,370,543
Food and beverage 354,402 451,598 1,913,309 1,745,634
Other - - 954,311 283,155
Total departmental
expenses 354,402 451,598 5,783,767 4,399,332
Departmental profit 160,840 93,629 3,588,094 2,811,455
Undistributed operating
expenses
Other operating costs 198,561 248,793 446,518 457,354
Sales and marketing - - 187,408 188,644
General and administrative 34,595 96,547 521,452 594,733
Depreciation 29,105 27,962 225,544 224,401
262,261 373,302 1,380,922 1,465,132
Gross operating (loss)
profit (101,421) (279,673) 2,207,172 1,346,323
Other income (expenses)
Interest, net 1,962 10,941 (450,491) (485,193)
Property taxes - - (68,588) (23,332)
Total other income
(expenses) 1,962 10,941 (519,079) (508,525)
Net (loss) income $ (99,459) $(268,732) $ 1,688,093 $ 837,798
Weighted average shares
outstanding 1,470,000 1,470,000 4,287,525 4,287,525
Earnings (loss) per common
share (.06) (.18) .39 .20
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flow (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Net loss $(99,459) $(268,732)
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation and amortization 29,105 27,962
Changes in assets and liabilities
Accounts receivable (25,074) -
Inventory (355) (4,418)
Prepaid expenses (20,185) 9,274
Other assets (139,063) (10,244)
Accounts payable and accrued
expenses 27,216 (144,751)
(128,356) (122,177)
Net cash used by operating
activities (227,815) (390,909)
Cash flows from investing activities
Property and equipment additions (2,304) (14,114)
Net cash used by investing
activities (2,304) (14,114)
Cash flows from financing activities
Proceeds from notes payable 50,000 - 50,000
Net cash provided by financing
activities 50,000 -
Net decrease in cash and cash equivalents (180,119) (405,023)
Cash and cash equivalents - beginning of
period 235,711 1,046,709
Cash and cash equivalents - end of period $ 55,592 $ 641,686
Supplemental disclosure of cash flow information:
Cash paid for interest was $0 for the three months ended March
31, 1996 and 1995.
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of
Nashville Country Club, Inc. (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and
Item 310(b) of Regulation S-B under the Securities Exchange Act of
1934. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating
results for the three months ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the fiscal year
ending December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in
the Company's Form 10-KSB for the year ended December 31, 1995.
NOTE B - PRO FORMA OPERATIONS
On April 29, 1996, the Company acquired the assets and interests
comprising The Village at Breckenridge - A Wyndham Resort (the
"Resort"). The acquisition is accounted for using the purchase
method of accounting and, accordingly, the net purchase price has
been allocated to the assets purchased and the liabilities assumed
based on the fair values on the date of acquisition. The net
purchase price was allocated as follows:
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Working capital (deficit) $ (1,190,365)
Property and equipment 28,070,925
Intangibles 2,300,000
Long-term debt (20,615,756)
Net assets acquired $ 8,564,804
</TABLE>
Intangibles are being amortized over 15 years. The unaudited pro
forma results of operations at March 31, 1996 and 1995 included in
the accompanying consolidated financial statements include the
results of operations of the Resort assuming that the acquisition was
effective January 1, 1995. A portion of the purchase price was
satisfied with proceeds from the public offering (Note E).
NOTE C - EARNINGS (LOSS) PER COMMON SHARE
The computation of earnings per share was based on the weighted
average number of common shares outstanding. Common stock
equivalents were not considered as their inclusion would be
antidilutive. Pro forma earnings per share includes the shares
issued to the sellers in connection with the acquisition of the
Resort and shares issued to the public in connection with the
securities offering (Note E) to finance a portion of the cash
purchase price for the Resort which are considered outstanding as of
January 1, 1995.
NASHVILLE COUNTRY CLUB, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
NOTE D - INCOME TAXES
The Company calculates and records the amounts of income taxes
payable or refundable currently or in future years for temporary
differences between the financial statement basis and income tax
basis based on the current enacted tax laws. No provision for income
taxes has been provided in the accompanying consolidated financial
statements as the Company has net operating loss carryforwards to
offset future net income. The deferred tax asset of approximately
$525,000 for the remaining net operating losses would be fully
impaired as a result of the uncertainty as to their ultimate
utilization. Therefore, the accompanying consolidated financial
statements would not differ.
NOTE E - SUBSEQUENT EVENTS
On April 29, 1996, the Company completed a public offering of
1,200,000 units at $10 per unit. Each unit consisted of two shares
of common stock and one redeemable common stock purchase warrant.
Each redeemable common stock purchase warrant entitles the holder to
purchase one share of common stock at a price of $6.25 until April
23, 2001. Net proceeds from the offering were approximately
$10,300,000, a portion of which was used to pay the cash purchase
price for the Resort (Note B) and expenses of the acquisition and the
offering.
Item 2. Management's Discussion and Analysis or Plan of Operation
Nashville Restaurant Operations
Total net sales for the three months ended March 31, 1996 were
approximately $515,000 compared to $545,000 for the same three month
period in the prior year. The overall decrease is due to poor winter
weather conditions in Nashville. Food and beverage expenses
decreased, as a percent of revenue, to 70% in 1996 from 84% for the
same period in 1995. The decrease in expenses and overall increase
in departmental profit was due primarily to improved operating
efficiencies.
Pro Forma Operations
On a pro forma basis, assuming the acquisition of the Resort, as of
January 1, 1995, revenues for the three months ended March 31, 1996
increased 30% from $7,211,000 for the three months ended March 31,
1995 to $9,372,000 for the three months ended March 31, 1996. The
increase of 30% was primarily due to an increase in room and other
revenues. The increase in room revenues is due in part to the
acquisition of additional living units under management contracts and
overall increased occupancy and increased average rates for rooms.
The increase in other revenues was primarily due to improved
operations of A Travel Company, a full service travel agency owned
and operated by the Resort and income from special events packages.
Changes in expenses as if the acquisition was effective January 1,
1995 are as follows:
Room expenses as a percentage of room revenues decreased from 58%
at March 31, 1995 to 57% at March 31, 1996. These expenses
include the fees paid to the owners of the living units for
revenues produced from the rental of such units. Food and
beverage expenses as a percentage of food and beverage revenues
decreased from 76% at March 31, 1995 to 73% at March 31, 1996.
This decrease is primarily due to improved operating efficiencies.
Other expenses increased primarily due to an increase in special
events packages.
Other expenses remained relatively stable on a quarter to quarter
basis.
Net income, on a proforma basis, for the first quarter of 1996
increased 101% from $838,000 to $1,688,000 due to increased Resort
revenues and improved operating efficiencies.
The Resort's results of operations are affected by seasonality in its
business, primarily to the extent that revenues and operating profits
may be lower in the spring, summer and fall months than in the winter
months. Historically, the first quarter of the year is the most
profitable with other quarters' earnings significantly less or in a
loss position.
Item 2. Management's Discussion and Analysis or Plan of Operation
Liquidity and Capital Resources
As of March 31, 1996, the Company had cash and cash equivalents of
approximately $56,000 and a working capital deficit of approximately
$353,000. On April 29, 1996, the Company completed a public offering
resulting in the Company receiving proceeds of approximately
$10,300,000. The Company paid approximately $6,134,000 of such net
proceeds in satisfaction of the cash purchase price for the Resort
and approximately $887,000 in closing costs associated with the
acquisition and the offering. The cash and cash equivalents on hand
at March 31, 1996 and the remaining proceeds from the offering of
approximately $3,279,000 are anticipated to be sufficient to conduct
operations and satisfy current debt financing obligations for at
least the next eighteen months.
Certain oral and written statements of management of the Company
included in this Form 10-QSB/A and elsewhere may contain forward-
looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, which are intended to be covered by the safe harbors created
thereby. These statements include the plans and objectives of
management for future operations. The forwardlooking statements
included herein and elsewhere are based on current expectations that
involve numerous risks and uncertainties. Assumptions relating to
the foregoing involve judgments which are difficult or impossible to
predict accurately and many of which are beyond the control of the
Company. In particular the assumptions assume favorable weather
conditions in Breckenridge, Colorado, continued popularity of winter
sports, including skiing, the continued ability of Resort management
to maintain and increase revenues from the Resort's operations,
continued popularity of country music and the country lifestyle
associated with country music and favorable, economic, competitive
and market conditions for the Company's business operations.
Although the Company believes that the assumptions underlying the
forward-looking statements are reasonable, any of the assumptions
could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements will prove to be accurate. In light
of the significant uncertainties inherent in the forward-looking
statement, the inclusion of such information should not be regarded
as a representation by the Company or any other person that the
objectives and plans of the Company will be achieved.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
Exhibit 27 Financial Data Schedule
(B) Form 8-K filed during the quarterly period
ended March 31, 1996:
On February 13, 1996 the Registrant filed a Form 8-K with respect to
the acquisition of The Village at Breckenridge Resort.
SIGNATURES
In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized in the city of Hickory Valley, Tennessee, on the 18th day
of June 1996.
NASHVILLE COUNTRY CLUB, INC.
By: /s/ Thomas Jackson Weaver III
Thomas Jackson Weaver III Chairman of the
Board, Chief
Executive Officer and President
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 55,592
<SECURITIES> 0
<RECEIVABLES> 25,074
<ALLOWANCES> 0
<INVENTORY> 120,909
<CURRENT-ASSETS> 228,950
<PP&E> 2,662,238
<DEPRECIATION> 158,307
<TOTAL-ASSETS> 3,966,558
<CURRENT-LIABILITIES> 1,538,059
<BONDS> 0
0
10,000
<COMMON> 3,224,747
<OTHER-SE> (1,539,248)
<TOTAL-LIABILITY-AND-EQUITY> 3,966,558
<SALES> 515,242
<TOTAL-REVENUES> 515,242
<CGS> 354,402
<TOTAL-COSTS> 354,402
<OTHER-EXPENSES> 262,261
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,962
<INCOME-PRETAX> (99,459)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (99,459)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
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