<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-QSB
Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934
For the quarterly period ended September 30, 1997
Commission file number 0-22582
TBA ENTERTAINMENT CORPORATION
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 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
(Registrant's Telephone Number, Including Area Code)
Nashville Country Club, Inc.
(Former Name 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 October 31, 1997, the Registrant had outstanding 8,000,275 shares of
Common Stock, par value $.001 per share.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
FORM 10-QSB
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Statements of Operations . . . . . . . . . . . . . . . . 2
Consolidated Statements of Operations . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis or Plan of Operation . . . . . . 9
PART II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . 15
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . 16
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
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TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,659,921 $ 3,264,051
Accounts receivable 611,279 2,875,506
Due from Joint Venture -- 801,250
Inventories 429,987 422,713
Prepaid expenses and other current assets 139,771 1,042,365
------------ ------------
Total current assets 3,840,958 8,405,885
Property and equipment, net 34,043,605 45,128,723
Investment in Joint Venture -- 341,472
Other assets, net:
Goodwill -- 7,594,467
Other 223,544 852,254
------------ ------------
Total assets $ 38,108,107 $ 62,322,801
============ ============
Current liabilities:
Current portion of long-term debt $ 884,311 $ 2,308,918
Accounts payable 1,282,723 1,439,122
Advance deposits 1,739,839 5,860,516
Accrued expenses 1,733,170 2,654,215
------------ ------------
Total current liabilities 5,640,043 12,262,771
Capital land lease obligation 733,000 733,000
Long-term debt, net of current portion 19,521,739 21,199,540
------------ ------------
Total liabilities 25,894,782 34,195,311
------------ ------------
Minority Interest -- 2,253,550
------------ ------------
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
Common stock, par value $.001; authorized 20,000,000
shares, 8,000,275 shares issued and outstanding 16,770,423 29,219,423
Accumulated deficit (4,567,098) (3,355,483)
------------ ------------
Total stockholders' equity 12,213,325 25,873,940
------------ ------------
Total liabilities and stockholders' equity $ 38,108,107 $ 62,322,801
============ ============
</TABLE>
See notes to financial statements.
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TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Nine Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
1996 1997 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Resort ................................................ $ 6,417,657 $ 18,235,140 $ 16,563,944 $ 18,235,140
Entertainment ......................................... -- 9,455,680 23,245,180 26,874,289
------------ ------------ ------------ ------------
Total revenue ....................................... 6,417,657 27,690,820 39,809,124 45,109,429
------------ ------------ ------------ ------------
Operating expenses:
Resort ................................................ 6,887,450 15,457,773 14,482,461 15,457,773
Entertainment ......................................... -- 7,713,210 21,796,379 24,012,128
Depreciation and amortization ......................... 429,691 988,956 1,503,031 1,518,825
Corporate expenses .................................... 183,339 376,317 183,339 376,317
------------ ------------ ------------ ------------
Total operating expenses ............................ 7,500,480 24,536,256 37,965,210 41,365,043
------------ ------------ ------------ ------------
(Loss) income from operations ........................... (1,082,823) 3,154,564 1,843,914 3,744,386
Equity in income of Joint Venture ....................... -- 497,109 449,462 528,587
Interest expense, net ................................... (698,064) (1,305,314) (1,498,512) (1,432,214)
------------ ------------ ----------- -----------
(Loss) income before taxes and minority interest ........ (1,780,887) 2,346,359 794,864 2,840,759
Provision for taxes ..................................... -- -- -- --
Minority interest ....................................... -- (1,134,744) (392,088) (1,875,542)
------------ ------------ ------------ ------------
(Loss) net income ....................................... $ (1,780,887) $ 1,211,615 $ 402,776 $ 965,217
============ ============ ============ ============
(Loss) earnings per common and equivalent common share .. $ (.56) $ .17 $ .05 $ .12
============ ============ ============ ============
Weighted average shares outstanding ..................... 3,206,767 6,948,142 8,334,560 8,334,560
============ ============ ============ ============
</TABLE>
See notes to financial statements.
2
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TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Three Months Ended Three Months Ended
September 30, September 30,
-------------------------------- --------------------------------
1996 1997 1996 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Resort .............................................. $ 4,123,456 $ 4,665,820 $ 4,123,456 $ 4,666,527
Entertainment ....................................... -- 8,060,459 15,705,939 10,228,105
------------ ------------ ------------ ------------
Total revenue ..................................... 4,123,456 12,726,279 19,829,395 14,894,632
------------ ------------ ------------ ------------
Operating expenses:
Resort .............................................. 4,117,537 4,394,074 4,117,537 4,394,074
Entertainment ....................................... -- 5,997,817 13,529,971 7,934,147
Depreciation and amortization ....................... 237,164 398,407 507,592 455,533
Corporate expenses .................................. 92,286 119,490 92,286 119,490
------------ ------------ ------------ ------------
Total operating expenses .......................... 4,446,987 10,909,788 18,247,386 12,903,244
------------ ------------ ------------ ------------
(Loss) income from operations ......................... (323,531) 1,816,491 1,582,009 1,991,388
Equity in income of Joint Venture ..................... -- 72,761 98,558 72,761
Interest expense, net ................................. (466,828) (455,494) (522,240) (472,062)
------------ ------------ ------------ ------------
(Loss) income before taxes and minority interest ...... (790,359) 1,433,758 1,158,327 1,592,087
Provision for taxes ................................... -- -- -- --
Minority interest ..................................... -- (1,134,744) (941,997) (1,295,864)
------------ ------------ ------------ ------------
(Loss) net income ..................................... $ (790,359) $ 299,014 $ 216,330 $ 296,223
============ ============ ============ ============
(Loss) earnings per common and equivalent common share .. $ (.17) $ .04 $ .03 $ .04
============ ============ ============ ============
Weighted average shares outstanding ................... 4,590,435 7,458,473 8,334,560 8,334,560
============ ============ ============ ============
</TABLE>
See notes to financial statements.
3
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TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------------
1996 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (1,780,887) $ 1,211,615
------------ ------------
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization 424,893 988,956
Undistributed earnings of Joint Venture -- (349,954)
Undistributed earnings to minority interest -- 441,220
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 232,200 (369,693)
(Increase) decrease in inventory (38,454) 48,134
(Increase) decrease in prepaid expenses and other current assets (21,262) 86,474
Increase in other assets (25,000) (179,767)
Increase (decrease) in accounts payable and accrued expenses 179,597 (1,894,799)
------------ ------------
Total adjustments 751,974 (1,229,430)
------------ ------------
Net cash used in operating activities (1,028,913) (17,814)
------------ ------------
Cash flows from investing activities:
Acquisitions, net of cash acquired (7,834,936) (6,724,895)
Expenditures for property and equipment (393,605) (481,125)
------------ ------------
Net cash used in investing activities (8,228,541) (7,206,020)
------------ ------------
Cash flows from financing activities:
Proceeds from sale of common stock, net of offering costs 11,300,661 8,129,000
Proceeds from borrowings -- 674,474
Repayments of borrowings (456,278) (975,510)
------------ ------------
Net cash provided by financing activities 10,844,383 7,827,964
------------ ------------
Net increase in cash and cash equivalents 1,586,929 604,130
Cash and cash equivalents - beginning of period 235,711 2,659,921
------------ ------------
Cash and cash equivalents - end of period $ 1,822,640 $ 3,264,051
============ ============
Supplemental disclosure of non-cash investing and financing activities:
The Company issued common stock valued at $2,097,627 in connection with the acquisition of The Village at Breckenridge
Resort in April 1996.
The Company issued notes payable totalling $2,480,000 and common stock valued at $4,320,000 in connection with the
acquisition of Avalon Entertainment Group, Inc. in April 1997.
</TABLE>
See notes to financial statements.
4
<PAGE> 7
TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements include
the accounts of TBA Entertainment Corporation, a Delaware corporation (formerly
Nashville Country Club, Inc., a Tennessee corporation), and its direct and
indirect wholly owned and majority owned subsidiaries, including VAB
Acquisition Corp, Inc., which acquired The Village at Breckenridge Resort (the
"Breckenridge Resort") on April 29, 1996, Avalon Entertainment Group, Inc.
("AEG"), an indirect wholly owned subsidiary which the Company acquired on
April 21, 1997 and AWC Acquisition Corp., Inc., a direct wholly owned
subsidiary through which the Company acquired a 51% interest in a group of
entities collectively referred to as Avalon West Coast ("AWC") on July 31, 1997
(collectively, the "Company"). The accompanying unaudited consolidated
financial statements of 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 10(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.
The operations of the Breckenridge Resort are subject to significant
seasonal variations with substantially all of the Breckenridge Resort's
operating profits generated in the first quarter and in the month of December,
which periods correspond to the winter ski season. Generally, the Breckenridge
Resort reports a loss for the spring, summer and fall periods. In addition,
the operations of the Breckenridge Resort may fluctuate significantly due to a
number of factors, including weather. Such fluctuations may materially affect
the Company's revenues and profitability.
Operating results for the nine months ended September 30, 1997 are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1997. 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, 1996.
Certain prior period amounts have been reclassified to conform with
the 1997 presentation. Such reclassifications had no impact on the Company's
1996 net loss.
The acquisition of the Breckenridge Resort was effective April 29,
1996. The acquisition of AEG was effective April 21, 1997. The acquisition of
a 51% interest in AWC was effective July 31, 1997. The pro forma unaudited
consolidated statements of operations for the three-month and nine-month
periods ended September 30, 1996 and 1997 include the results of operations of
the Breckenridge Resort, AEG and AWC assuming the acquisitions of the
Breckenridge Resort, AEG and AWC had occurred effective January 1, 1996.
2. ACQUISITION OF AVALON ENTERTAINMENT GROUP, INC.
On April 21, 1997, the Company acquired 100% of the common stock of
Avalon Entertainment Group, Inc., a Tennessee corporation. The $7.2 million
purchase price was satisfied by the issuance of $4,320,000 in aggregate fair
value of common stock of the Company (809,840 shares), $2,480,000 of promissory
notes and $400,000 in cash. The promissory notes accrue interest at 5% per
annum. The Company intends to repay the promissory notes with proceeds from
debt financing which the Company obtained in November 1997 (Note 9).
The merger agreement relating to the acquisition of AEG provides for an
adjustment to the purchase price based on AEG's net income before taxes for the
year ending December 31, 1997 (the "1997 Pre-Tax Net Income"). In the event
that AEG's 1997 Pre-Tax Net Income equals or exceeds $1.2 million, the purchase
price is not adjusted. In the event that AEG's 1997 Pre-Tax Net Income is less
than $1.2 million, the purchase price is adjusted downward in an amount equal
to six times the difference between the 1997 Pre-Tax Net Income and $1.2
million. The
5
<PAGE> 8
former owners of AEG may satisfy the adjusted purchase price by delivering to
the Company either cash or shares of common stock valued based on the average
closing prices of the common stock for the 30 days ending 5 days prior to the
calculation of the 1997 Pre-Tax Net Income.
The acquisition was accounted for using the purchase method of
accounting and, accordingly, the net purchase price has been allocated to the
assets acquired and the liabilities assumed based on their estimated fair
values on the date of acquisition. The net purchase price was allocated as
follows:
<TABLE>
<S> <C>
Assets acquired:
Cash $886,000
Other current assets 425,000
Property and equipment 61,000
-----------
1,372,000
Liabilities assumed:
Accounts payable and accrued expenses 1,562,000
-----------
Net liabilities assumed $ 190,000
===========
</TABLE>
Including acquisition costs, the total purchase price for AEG was
approximately $7,574,000. The acquisition of AEG results in the recognition of
goodwill of approximately $7,764,000. The goodwill is being amortized over an
estimated useful life of 20 years.
3. INVESTMENT IN WARNER/AVALON JOINT VENTURE
AEG owns a 50% interest in a joint venture with Warner Custom Music
Corp. The joint venture, Warner/Avalon, commenced limited operations in 1994
and was formally organized as a Delaware general partnership on November 25,
1995. Warner/Avalon develops and coordinates live, sponsored music
entertainment marketing tours and programs and related projects. Warner/Avalon
generates revenues primarily from third party corporate sponsorships.
Warner/Avalon recognizes revenue by amortizing the contract sponsorship funds
over the life of the related program. Programs may range from single day
events to tours lasting several months.
AEG accounts for the investment using the equity method of accounting.
Summary statements of operations data of Warner/Avalon, included in the
accompanying proforma consolidated statements of operations for the three-month
period and nine-month period ended September 30, 1997 are as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, 1997 September 30, 1997
------------------ ------------------
<S> <C> <C>
Revenues $1,872,000 $10,265,000
Gross Profit 461,000 1,987,000
Net (Loss) Income (21,000) 890,000
</TABLE>
As of September 30,1997, AEG had undistributed earnings from Warner/Avalon of
approximately $341,000. In addition, AEG has advanced Warner/Avalon $245,000,
which accrues interest at 10%. This advance is included in Due from Joint
Venture in the accompanying consolidated balance sheets as of September 30,
1997.
4. ACQUISITION OF AVALON WEST COAST
On July 31, 1997, the Company acquired a 51% controlling interest in
AWC, a group of entities affiliated with AEG. Avalon West Coast owns and
manages amphitheaters, produces concert events, provides advertising services
and is involved in event merchandising for large-scale sporting and
entertainment events. The $7 million purchase price was paid with proceeds
from the Company's stock offering (Note 8).
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The final purchase price for the Company's 51% interest in AWC will be
equal to the greater of (i) $7 million or (ii) 51% of the sum of (a) six times
the average of the earnings before interest, taxes and depreciation and
amortization for AWC's amphitheater operations for the years 1996, 1997 and
1998 and (b) six times the average of the net income before taxes of the
remaining business entities constituting AWC for the years 1996, 1997 and 1998.
The excess of the final purchase price over $7 million will be payable in
common stock of the Company based on an average of the common stock price for
the years 1996, 1997 and 1998.
The acquisition was accounted for using the purchase method of
accounting and, accordingly, the net purchase price has been allocated to the
assets acquired and the liabilities assumed based on their estimated fair
values on the date of acquisition. The net purchase price was allocated as
follows:
<TABLE>
<S> <C>
Assets acquired:
Cash $ 911,000
Other current assets 3,937,000
Property and equipment and other non-current assets 6,063,000
------------
10,911,000
------------
Liabilities assumed:
Accounts payable and accrued expenses 6,812,000
Long-term debt 400,000
------------
7,212,000
------------
Net assets at acquisition date 3,699,000
Minority Interest 1,812,000
------------
Interest in net assets acquired by Company $ 1,886,000
------------
</TABLE>
Including acquisition costs, the total purchase price for AWC was approximately
$7,748,000. The excess purchase price over the Company's interest in the net
assets of AWC of $5,862,000 has been allocated to property and equipment in the
accompanying consolidated balance sheets and is being amortized over an
estimated useful life of 20 years.
5. INVESTMENT IN WESTERN AMPHITHEATER PARTNERS JOINT VENTURE
Effective April 1997, one of the entities comprising AWC entered into
a partnership ("Western Amphitheater Partners" or "WAP") with Pavilion
Partners. WAP was formed for the purpose of combining the operations of the
Irvine Meadows Amphitheater (owned by the Company) and Glen Helen Amphitheater
(owned by Pavilion Partners). Pursuant to the partnership agreement, each
partner retains ownership of its respective amphitheater and shares equally in
the net operating results of WAP.
The company has management control over the operation of both
facilities and, therefore, the operations of WAP have been consolidated in the
accompanying consolidated statements of operations. Pavilion Partners' 50%
share of WAP net income was $694,000 for the period from August 1, 1997 to
September 30, 1997 and, on a proforma basis, $823,000 and $1,375,000 for the
three- and nine-month periods ended September 30, 1997, and is reflected as
minority interest.
As of September 30, 1997, the accompanying consolidated balance sheet
includes a receivable from Pavilion Partners of approximately $556,000,
representing cash receipts received by Pavilion Partners not yet remitted to
WAP, net of minority interest due to Pavilion Partners.
6. 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
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financial statements as the Company has net operating loss carryforwards to
offset future net income. The deferred tax asset for the remaining net
operating losses would be fully impaired as a result of the uncertainty as to
their ultimate utilization.
7. STOCK OFFERING
On July 31, 1997, the Company completed an offering of 2,600,000
shares of its common stock for the purpose of completing the acquisition of
Avalon West Coast and for working capital purposes. The net proceeds totaled
approximately $8.1 million after deducting approximately $971,000 of offering
costs.
8. EARNINGS (LOSS) PER COMMON SHARE
The preferred stock is convertible into 334,285 shares of common
stock, is considered a common stock equivalent and has been included in the
weighted average number of common and common equivalent shares outstanding for
those periods that the Company generated net income. The preferred stock is
not included in the weighted average number of common and common equivalent
shares outstanding for those periods that the Company generated a net loss as
their inclusion would have been antidilutive. Outstanding warrants and options
were not included as their exercise price exceeded the market price for the
Company's common stock during all periods.
The Company is required to adopt Statement of Financial Accounting
Standards No. 128, "Earnings per Share" ("SFAS 128") in the fourth quarter of
1997. The adoption of SFAS No. 128 is not expected to have a material effect
on the Company's consolidated financial statements. Therefore, pro forma
results for SFAS No. 128 have not been presented.
9. REFINANCING OF COMPANY DEBT
In November 1997, the Company repaid four mortgage notes payable
related to the Breckenridge Resort, totaling approximately $14.3 million, with
proceeds from a new $14.6 million mortgage note payable to a bank. The new
loan accrues interest at 9% for the first three years and adjusts to the bank's
base rate plus .5% for the remaining four years of the loan. The new loan
provides for an initial amortization of principal and interest over a period of
20 years, adjusting to a period of twelve years in year four. The new loan
matures in November 2004. The new loan is secured by substantially all the
assets of the Breckenridge Resort.
In November 1997, the Company entered into a $2.6 million loan
agreement with a bank. The proceeds will be used to repay the promissory notes
issued in connection with the acquisition of AEG (Note 2). The loan accrues
interest at the bank's base rate plus .25% and requires monthly principal
payments of $43,333 plus accrued interest through December 2000 when all
remaining principal and interest is due. The loan is secured by the common
stock of AEG.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO
SEPTEMBER 30, 1996
The Company operates in two primary business divisions, Resorts and
Entertainment. The Resort Division comprises the Nashville Restaurant, which
opened in November 1994 and The Village at Breckenridge Resort (the
"Breckenridge Resort"), which the Company acquired in April 1996. The Resort
Division's revenues are derived from room rentals, food and beverage sales,
commercial leasing, travel services, entertainment events and ancillary
departments at the Breckenridge Resort and the Nashville Restaurant. The
Entertainment Division comprises the operations of Avalon Entertainment Group,
Inc. ("AEG"), which the Company acquired in April 1997, and the operations of a
group of entities collectively referred to as Avalon West Coast or "AWC", in
which the Company acquired a 51% interest on July 31, 1997. The Entertainment
Division's revenues are derived primarily from the production of corporate
entertainment events, the production of concerts, event merchandising, and
ownership and management of amphitheaters. AEG also is a 50% joint venture
partner in Warner/Avalon, which provides entertainment marketing programs.
To enhance comparability, the following discussion of the results of operations
of the Company is presented on a pro forma basis to reflect the acquisitions of
the Breckenridge Resort (acquired in April 1996), AEG (acquired in April 1997)
and a 51% interest in AWC (acquired in July 1997) as though such transactions
had occurred as of January 1, 1996 for statements of operations purposes. The
pro forma results are not necessarily indicative of the combined results that
would have occurred had the acquisitions of the Breckenridge Resort, AEG and
AWC actually occurred as of January 1, 1996.
Seasonality
The Breckenridge Resort's operations are subject to significant seasonal
variations with substantially all of the Breckenridge Resort's operating
profits generated in the first quarter and in December, which periods
correspond to the winter ski season. Generally, the Breckenridge Resort
reports a loss for the spring, summer and fall periods. In addition, the
operations of the Breckenridge Resort may fluctuate significantly due to a
number of factors, including weather. Such fluctuations may materially affect
the Company's revenues and profitability.
Comparison of Nine Months Ended September 30, 1997 and 1996
Total revenues increased $5,300,000, or 13%, to $45,109,000 for the nine months
ended September 30, 1997 from $39,809,000 for the nine months ended September
30, 1996. Resort revenues increased $1,671,000, or 10%, to $18,235,000 for the
nine months ended September 30, 1997 from $16,564,000 for the nine months ended
September 30, 1996, due primarily to an increase in rooms and other revenues
offset by a decline in food and beverage revenues at the Breckenridge Resort.
The rooms revenue increase of $1,262,000 is attributable to a 7% increase in
the number of occupied room nights and a 9% increase in average daily rate for
the nine months ended September 30, 1997 compared to the nine months ended
September 30, 1996. The increase in other revenues of $581,000, or 17%, is due
primarily to revenue growth of the Breckenridge Resort's travel company, as the
Company provided travel and recreation services to more visitors to the
Breckenridge Resort. Food and beverage revenues declined $186,000, or 4%, due
primarily to heightened food and beverage competition from other restaurants,
taverns and grocery stores in Breckenridge.
Entertainment revenues increased $3,629,000, or 16%, to $26,874,000 for the
nine months ended September 30, 1997 from $23,245,000 for the nine months ended
September 30, 1996. AEG revenues increased $964,000 or 23% to $5,231,000 for
the nine months ended September 30, 1997 from $4,267,000 for the nine months
ended September 30, 1996. The increase resulted primarily from the production
of 9 additional Corporate Entertainment events, to 99 events produced in the
nine months ended September 30, 1997 compared to 90 events produced in the nine
months ended September 30, 1996 and an increase in the average revenue per
event, to $52,000 in the 1997 period compared to $47,000 for the 1996 period as
AEG sought to increase the number of larger events produced.
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<PAGE> 12
In April 1997, one of the entities comprising AWC entered into a partnership
(Western Amphitheater Partners or "WAP") with Pavillion Partners. WAP was
formed for the purpose of combining the operations of the Irvine Meadows
Amphitheater ("IMA", owned by the Company) and Glen Helen Amphitheater ("GHA",
owned by Pavillion Partners). Pursuant to the partnership agreement, each
partner retains ownership of its respective amphitheater and shares equally in
the net operating results of WAP. Since the agreement was not effective until
1997, the pro forma consolidated operating results for 1996 include only the
operating results of IMA, while in 1997, the pro forma operating results
included both IMA and GHA.
AWC revenues increased $2,665,000 or 14%, to $21,643,000 for the nine months
ended September 30, 1997 from $18,978,000 for the nine months ended September
30, 1996. The increase results from an increase in amphitheater revenues,
offset by a decrease in revenues from concert events produced at other venues
and a decrease in merchandising revenues. The increase in amphitheater
operations results from an increase in revenue generated by WAP of $4,990,000,
or 68%, to $12,304,000 for the nine months ended September 30, 1997 from
$7,314,000 for the nine months ended September 30, 1996. The increase results
from an increase in the number of contemporary shows to 26 for the nine months
ended September 30, 1997 from 20 for the nine months ended September 30, 1996,
a 24% increase in average show attendance, a 28% increase in per capita
spending for concessions, parking, and merchandise, offset by a 23% decrease in
average ticket price. Revenue from other concert events decreased $4,712,000,
or 49%, to $4,875,000 for the nine months ended September 30, 1997 from
$9,587,000 for the nine months ended September 30, 1996. The decrease results
from a reduction in the number of shows for the nine months ended September 30,
1997 from the nine months ended September 30, 1996. The decrease in the
number of shows results from greater emphasis being placed on producing a
smaller number of events at larger venues because management believes these
venues provide greater profit opportunities. Included in 1997 revenues is
$3,473,000 from one stadium show, whereas the comparable 1996 period had no
stadium shows. Merchandise and other revenues decreased $1,086,000, or 52%, to
$991,000 for the nine months ended September 30, 1997 from $2,077,000 for the
nine months ended September 30, 1996. This decrease generally results from
revenues which the Company earned in the third quarter of 1996 related to its
Olympic merchandising activities, while no such revenues existed in the
comparable 1997 period.
Total operating expenses increased $3,400,000, or 9%, to $41,365,000 for the
nine months ended September 30, 1997 from $37,965,000 for the nine months ended
September 30, 1996. Resort operating expenses increased $976,000, or 7%, to
$15,458,000 for the nine months ended September 30, 1997 from $14,482,000 for
the nine months ended September 30, 1996. Resort operating expenses, as a
percent of Resort revenues, decreased to 85% for the nine months ended
September 30, 1997 from 87% for the nine months ended September 30, 1996. The
decrease was primarily due to the Breckenridge Resort's ability to leverage
staffing levels in revenue and overhead departments, thereby providing the
ability to increase revenues without corresponding increases in operating
costs.
Entertainment operating expenses increased $2,216,000, or 10%, to $24,012,000
for the nine months ended September 30, 1997 from $21,796,000 for the nine
months ended September 30, 1996. AEG operating expenses increased $1,159,000,
or 29%, to $5,166,000 for the nine months ended September 30, 1997 from
$4,007,000 for the nine months ended September 30, 1996. Direct costs of
producing Corporate Entertainment events increased $899,000, or 29%, to
$3,972,000 for the nine months ended September 30, 1997 from $3,073,000 for the
nine months ended September 30, 1996. The increase in direct costs was due to
the increase in the number and size of events produced. Direct costs, as a
percentage of revenues increased to 76% for the 1997 period from 72% for the
1996 period. The increase was primarily due to the production of several large
Corporate Entertainment events at lower profit margins for the nine months
ended September 30, 1997 compared to the production of four large Corporate
Entertainment events at higher profit margins for the nine months ended
September 30, 1996. Other AEG entertainment operating expenses increased
$260,000 for the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996 primarily due to salary and related expense
increases associated with the increased number of Corporate Entertainment
events.
AWC operating expenses increased $1,057,000, or 6%, to $18,846,000 for the nine
months ended September 30, 1997 from $17,789,000 for the nine months ended
September 30, 1996. This increase results from an increase in direct costs and
general and administrative expenses for amphitheater operations, partially
offset by a decrease in direct costs for other concert events. Direct costs at
WAP increased $1,795,000, or 31%, to $7,617,000 for the nine months ended
September 30, 1997 from $5,822,000 for the nine
10
<PAGE> 13
months ended September 30, 1996. General and administrative costs at WAP
increased $898,000, or 54%, to $2,554,000 for the nine months ended September
30, 1997 from $1,656,000 for the nine months ended September 30, 1996. As a
percentage of revenues, combined direct costs and general and administrative
expenses decreased to 83% for the nine months ended September 30, 1997 from 102%
for the nine months ended September 30, 1996. This decrease results from the
operational efficiencies achieved by combining the operations of IMA and GHA in
the WAP partnership. Direct costs for other concert events decreased
$1,454,000, or 17%, to $7,303,000 for the nine months ended September 30, 1997
from $8,757,000 for the nine months ended September 30, 1996. The decrease
results from the lower number of shows produced in 1997, offset by the high
cost of one stadium show in 1997.
Depreciation and amortization remained relatively constant for the nine months
ended September 30, 1997 compared to the nine months ended September 30, 1996.
Corporate expenses increased from $183,000 for the nine months ended September
30, 1996 to $376,000 for the nine months ended September 30, 1997, primarily as
a result of increased compensation expense associated with the addition of
Corporate Officers for the nine months ended September 30, 1997.
Equity income from AEG's 50% joint venture interest in Warner/Avalon increased
$79,000, or 18%, to $529,000 for the nine months ended September 30, 1997 from
$450,000 for the nine months ended September 30, 1996. Revenues for
Warner/Avalon increased $2,281,000, or 29%, to $10,265,000 for the nine months
ended September 30, 1997 from $7,984,000 for the nine months ended September
30, 1996. The increase results primarily from the production of one additional
large single day Entertainment Marketing event in 1997 representing $3,087,000
of revenues, which was partially offset by a $1,087,000 decrease in revenues
due to the loss of an Entertainment Marketing tour in 1997. Direct costs of
producing entertainment marketing programs increased $1,787,000, or 28%, to
$8,278,000 for the nine months ended September 30, 1997 from $6,491,000 for the
nine months ended September 30, 1996. Direct costs, as a percentage of
revenues, remained relatively constant between periods. Other general and
administrative expenses for Warner/Avalon increased $300,000 for the nine
months ended September 30, 1997 compared to the nine months ended September 30,
1996 primarily due to an increase in staffing levels associated with the
increased business activity of Warner/Avalon.
Net interest expense decreased $67,000, or 4%, to $1,432,000 for the nine
months ended September 30, 1997 from $1,499,000 for the nine months ended
September 30, 1996, due primarily to principal payments made on the
Breckenridge Resort's long-term debt which decreased the average outstanding
debt balance.
Minority interest increased $1,484,000, to $1,876,000 for the nine months ended
September 30, 1997 from $392,000 for the nine months ended September 30, 1996.
$1,375,000 of the increase is attributable to the 50% minority interest in WAP,
which did not exist in 1996. The remaining $109,000 increase in minority
interest is due to the 49% minority interest in the increase in net income of
AWC due to reasons described above.
Net income increased $562,000, or 139%, to $965,000 for the nine months ended
September 30, 1997 from $403,000 for the nine months ended September 30, 1996
due to the reasons described above.
Comparison of Three Months Ended September 30, 1997 and 1996
Total revenues decreased $4,934,000, or 25%, to $14,895,000 for the third
quarter of 1997 from $19,829,000 for the third quarter of 1996. Resort
revenues increased $544,000, or 13%, to $4,667,000 for the third quarter of
1997 from $4,123,000 for the third quarter of 1996, due primarily to an
increase in rooms and other revenues at the Breckenridge Resort. The rooms
revenue increase of $279,000 is attributable to a 10% increase in the number of
occupied room nights and a 6% increase in average daily rate for the third
quarter of 1997 compared to the third quarter of 1996. The increase in other
revenues of $243,000, or 25%, is due primarily to revenue growth of the
Breckenridge Resort's travel company, as the Company sought to provide travel
and recreation services to more visitors to the Breckenridge Resort.
Entertainment revenues decreased $5,478,000, or 35%, to $10,228,000 for the
third quarter of 1997 from $15,706,000 for the third quarter of 1996. AEG
revenues increased $119,000, or 7% to $1,914,000 for the nine months ended
September 30, 1997 from $1,795,000 for the nine months ended September 30,
1996. The increase resulted primarily
11
<PAGE> 14
from the production of 30 Corporate Entertainment events in the third quarter
of 1997 at an average revenue per event of $64,000, compared to 32 events
produced in the third quarter of 1996 at an average revenue per event of
$56,000.
AWC revenues decreased $5,597,000 or 40%, to $8,314,000 for the nine months
ended September 30, 1997 from $13,911,000, for the nine months ended September
30, 1996. The decrease results from a decrease in revenues from concert events
produced at other venues and a decrease in merchandising revenues, offset by an
increase in amphitheater revenues. The increase in amphitheater operations
results from an increase in revenues generated by WAP of $1,243,000, or 21%, to
$7,195,000 for the third quarter of 1997 from $5,952,000 for the third quarter
of 1996. The increase results from a 24% increase in average show attendance,
a 28% increase in per capita spending for concessions, parking and merchandise,
offset by a 31% decrease in average ticket prices. Total shows for the periods
remained constant. Revenues from other concert events decreased $5,558,000, or
88%, to $768,000 for the third quarter of 1997 from $6,326,000 for the third
quarter of 1996. The decrease results from a reduction of shows in the
third quarter of 1997 as compared to the third quarter of 1996. The decrease
in the number of shows results from greater emphasis being placed on producing
a smaller number of events at larger venues because management believes these
venues provide greater profit opportunities. Merchandise and other revenues
decreased $1,361,000 to $0 for the third quarter of 1997 from $1,361,000 for
the third quarter of 1996. This decrease results entirely from a decrease in
revenues which the Company earned in the third quarter of 1996 related to its
Olympic merchandising activities, for which no such revenue existed in the
comparable 1997 period.
Total operating expenses decreased $5,344,000, or 29%, to $12,903,000 for the
third quarter of 1997 from $18,247,000 for the third quarter of 1996. Resort
operating expenses increased $276,000, or 7%, to $4,394,000 for the third
quarter of 1997 from $4,118,000 for the third quarter of 1996. Resort
operating expenses, as a percent of Resort revenues, decreased to 94% for the
third quarter of 1997 from 100% for the third quarter of 1996. The decrease
was primarily due to the Breckenridge Resort's ability to leverage staffing
levels in revenue and overhead departments, thereby providing the ability to
increase revenues without corresponding increases in operating costs.
Entertainment operating expenses decreased $5,596,000, or 41%, to $7,934,,000
for the third quarter of 1997 from $13,530,000 for the third quarter of 1996.
AEG operating expenses increased $45,000, or 3%, to $1,682,000 for the nine
months ended September 30, 1997 from $1,637,000 for the nine months ended
September 30, 1996. Direct costs of producing Corporate Entertainment events
increased $35,000, or 3%, to $1,369,000 for the third quarter of 1997 from
$1,334,000 for the third quarter of 1996. Direct costs, as a percentage of
revenues, decreased to 72% for the third quarter of 1997 from 74% for the third
quarter of 1996. The decrease was primarily due to the production of two large
Corporate Entertainment events at higher profit margins in the third quarter of
1997 compared to the production of one large Corporate Entertainment event at a
lower profit margin in the third quarter of 1996. Other AEG entertainment
operating expenses remained relatively constant between periods.
AWC operating expenses decreased $5,641,000, or 47%, to $6,252,000 for the nine
months ended September 30, 1997 from $11,893,000 for the nine months ended
September 30, 1996. This decrease results from a decrease in direct costs and
general and administrative expenses for amphitheater operations and a decrease
in direct costs for other concert events. Direct costs and general
administrative expenses at WAP decreased $310,000, or 5%, to $5,491,000 for the
three months ended September 30, 1997 from $5,801,000 for the three months
ended September 30, 1996. As a percentage of revenues, combined direct costs
and general and administrative expenses decreased to 76% for the three months
ended September 30, 1997 from 97% for the three months ended September 30,
1996. This decrease results from the operational efficiencies achieved by
combining the operations of IMA and GHA in the WAP partnership. Direct costs
for other concert events decreased $5,322,000, or 91%, to $526,000 for the
three months ended September 30, 1997 from $5,848,000 for the three months
ended September 30, 1996. The decrease results from the lower number of shows
produced in 1997.
Depreciation expense remained relatively constant for the third quarter of 1997
compared to the third quarter of 1996.
Corporate expenses increased from $92,000 in the third quarter of 1996 to
$119,000 in the third quarter of 1997, primarily as a result of increased
compensation expense associated with the addition of a Chief Financial Officer
in 1997.
12
<PAGE> 15
Equity income from AEG's 50% joint venture interest in Warner/Avalon decreased
$26,000, or 26%, to $73,000 for the third quarter of 1997 from $99,000 for the
third quarter of 1996. Revenues for Warner/Avalon decreased $2,390,000, or
56%, to $1,872,000 for the third quarter of 1997 from $4,262,000 for the third
quarter of 1996. The decrease results primarily from the timing of
Warner/Avalon's primary Entertainment Marketing programs. Warner/Avalon
produced one large single day Entertainment Marketing event in the third
quarter of 1996. This event occurred in the second quarter of 1997. Direct
costs of producing entertainment marketing programs decreased $2,457,000, or
65%, to $1,411,000 for the third quarter of 1997 from $3,868,000 for the third
quarter of 1996. The decrease was primarily due to costs associated with the
production of one single day event in the third quarter of 1996. Other general
and administrative expenses for Warner/Avalon increased $113,000 for the third
quarter of 1997 compared to the third quarter of 1996 primarily due to an
increase in staffing levels associated with the increased business activity of
Warner/Avalon.
Net Interest expense decreased $50,000, or 10%, to $472,000 for the three
months ended September 30, 1997 from $522,000 for the three months ended
September 30, 1996, due primarily to principal payments made on the
Breckenridge Resort's long-term debt which decreased the average outstanding
debt balance.
Minority interest increased $354,000, to $1,296,000 for the third quarter of
1997 from $942,000 for the third quarter of 1996, $823,000 of the increase is
attributable to the 50% minority interest in WAP, which did not exist in 1996.
The remaining $469,000 decrease in minority interest is due to the 49% minority
interest in the decrease in net income of AWC due to reasons described above.
Net income increased $80,000 or 37%, to a net income of $296,000 for the third
quarter of 1997 from a net income of $216,000 for the third quarter of 1996 due
to the reasons described above.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1997, the Company had cash and cash equivalents of
approximately $3,264,000 and a working capital deficit of approximately
$3,857,000, including $2,309,000 of short-term notes payable and current
maturities of long-term debt.
The Company's primary capital requirements relate to maintaining the property
and equipment at the Breckenridge Resort and Nashville Restaurant, servicing of
the Company's indebtedness and the acquisition of businesses and assets in the
entertainment and resort industries. In 1996, the Company expended
approximately $618,000 for capital expenditures at the Breckenridge Resort and
Nashville Restaurant and expects to incur a similar level of capital
expenditures in 1997. AEG and AWC do not expect to incur significant capital
expenditures in 1997.
The Company is currently highly leveraged. In connection with the acquisition
of the Breckenridge Resort, the Company became subject to certain long-term
debt secured by liens on substantially all of the assets of the Breckenridge
Resort. In November 1997, the Company repaid mortgage notes payable totaling
$14.3 million with proceeds from a new $14.6 million mortgage note payable to a
bank. The new loan accrues interest at 9% for the first three years of the new
loan (the "New Loan") and adjusts to the lender's base rate plus .5% for the
remaining four years of the New Loan. The New Loan provides for (i) the
amortization of principal and interest payments under the New Loan over a
period of 20 years for the first three years of the loan and over a period of
12 years for the remaining four years of the loan, (ii) a security interest in
substantially all of the assets of the Breckenridge Resort and (iii) the
repayment of all principal and accrued interest under the New Loan on November
10, 2004. In November 1996, the Company entered into a revolving credit
facility which provided up to a maximum of $300,000 of unsecured borrowings
through November 5, 1997. As of September 30, 1997, $300,000 was outstanding
under this revolving credit facility and is reflected in current portion of
long-term debt. In November 1997, this revolving credit facility was converted
to an unsecured term loan to be repaid in equal principal payments of $100,000
in February, March and April 1998.
In April 1997, the Company acquired AEG. The purchase price for AEG of
$7,200,000 was paid through the issuance of common stock having an aggregate
value of $4,320,000 and the delivery of promissory notes in the aggregate
principal amount of $2,480,000 and cash in the amount of $400,000. The
promissory notes bear interest at 5% per annum. In November 1997, the Company
entered into a $2.6 million loan agreement with a bank. The net proceeds will
be used to repay the promissory notes. The merger agreement relating to the
acquisition of AEG
13
<PAGE> 16
provides for an adjustment to the purchase price based on AEG's 1997 Pre-Tax
Net Income. In the event that AEG's 1997 Pre-Tax Net Income equals or exceeds
$1.2 million, the purchase price is adjusted downward in an amount equal to six
times the difference between the 1997 Pre-Tax Net Income and $1.2 million. The
former owners of AEG may satisfy the adjusted purchase price, if any, by
delivering to the Company either cash or shares of common stock valued based on
the average closing price of the common stock for the 30 trading days ending 5
days prior to the calculation of the 1997 Pre-Tax Net Income.
On July 31, 1997, the Company completed an offering of 2,600,000 shares of its
common stock for the purpose of completing the acquisition of Avalon West Coast
(see below) and for working capital purposes. The proceeds totaled
approximately $8.1 million, after deducting approximately $971,000 of offering
costs.
On July 31, 1997, the Company acquired a 51% interest in Avalon West Coast
("AWC"). The $7,000,000 purchase price was paid with proceeds from the
Company's stock offering. The purchase agreement provides for an aggregate
purchase price equal to the greater of (i) $7,000,000 or (ii) 51% of the sum of
(a) six times the average of earnings before interest, taxes and depreciation
and amortization for AWC's amphitheater operations for the computation period
and (b) six times the average of the net income before taxes of AWC's
non-amphitheater operations for the computation period. To the extent the
aggregate purchase price exceeds $7,000,000, the difference will be payable by
the Company in shares of common stock valued at the average closing price of
the common stock for each day in the computation period. Management does not
anticipate that the adjustment in the purchase price would result in the
issuance of a material amount of common stock, but there can be no assurance in
this regard.
The Company is exploring the development of a 107-room Nashville Hotel adjacent
to the Nashville Restaurant in Nashville. This development, which the company
estimates will cost approximately $10,300,000, would include the acquisition of
an existing, multi-story parking facility, the purchase of land and the
construction of a hotel and guest suites and office space. The Company is
negotiating with a bank to provide financing for the construction of the
Nashville Hotel.
In August 1996, the Company entered into an agreement in principal with
East-West Partners relating to the proposed development of residential and
commercial facilities located at the Breckenridge Resort. The Company expects
to enter into a definitive agreement with East-West Partners relating to the
proposed joint venture which will provide, among other things, that the Company
will contribute undeveloped land, commercial space and capital to the venture
and East-West Partners will contribute capital and manage master planning,
development, construction, funding and sales for these properties. Following
the anticipated execution of a definitive agreement, the Company anticipates
that its capital requirements associated with this joint venture will not be
material.
In connection with the acquisition of the Breckenridge Resort, the Company
agreed to repurchase shares of the Company's Common Stock owned by certain
prior owners of the Breckenridge Resort in an aggregate amount of up to
$413,170 and agreed to pay a fee of $97,000 to one of the former owners of the
Breckenridge Resort. The Company is currently negotiating the amount and
timing of such repurchase and payment. In September, 1997, the Company
repurchased approximately $25,000 of the common stock.
Management believes that cash flow from operations of the Resort and
Entertainment divisions, the proceeds of future issuances of its equity and
debt securities and the use of short-term bank debt will be adequate to fund
the operations and expansion plans of the Company during 1997. In addition, to
provide any additional funds necessary for the continued pursuit of the
Company's growth strategies, the Company may incur, from time to time,
additional short- and long-term bank indebtedness. The availability and
attractiveness of any outside sources of financing will depend on a number of
factors, some of which will relate to the financial condition and performance
of the Company, and some of which will be beyond the Company's control, such as
prevailing interest rates and general economic conditions. There can be no
assurance that such additional financing will be available or, if available,
will be on terms acceptable to the Company. To the extent that the Company is
able to finance its growth through external sources of capital, the Company
intends to continue to grow its operations through additional acquisitions.
Even if the Company is able to secure external financing sources for its growth
plans, there can be no assurance that the Company will be able to acquire any
additional businesses or assets, that any businesses or assets that are
acquired will be or will become profitable or the Company will be able to
effectively integrate any such businesses into its existing operations.
14
<PAGE> 17
TBA ENTERTAINMENT CORPORATION AND SUBSIDIARIES
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The matters voted upon at the annual meeting of stockholders
held on September 8, 1997 were as follows:
(i) The election of thirteen directors to serve until the
next annual meeting of stockholders or until their successors are elected and
qualified. The number of votes cast for and against the election of each
nominee, as well as the number of abstentions and broker non-votes with respect
to the election of each nominee, were as follows:
<TABLE>
<S> <C> <C> <C>
Frank Bumstead
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Charles Flood
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Robert E. Geddes
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Jeffrey McIntyre
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Thomas Miserendino
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Prab Nallamilli
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Louis J. Risi
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Steven L. Risi
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Jose F. Rosado
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Mark van Hartesvelt
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Frank M. Weaver
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Thomas J. Weaver
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
Kyle Young
For 5,066,278 Against/Withheld 0 Abstain 47,775 Broker Non-votes 0
</TABLE>
(ii) The approval of the 1997 Stock Option Plan. The number
of votes cast for and against, as well as the number of abstentions and broker
non-votes with respect to such matter were as follows:
<TABLE>
<S> <C> <C> <C>
For 2,687,043 Against 122,025 Abstain 25,715 Broker Non-votes 2,279,270
</TABLE>
(iii) The approval of changing the name of the Company to TBA
Entertainment Corporation. The number of votes cast for and against, as well
as the number of abstentions and broker non-votes with respect to such matter
were as follows:
<TABLE>
<S> <C> <C> <C>
For 5,058,301 Against 35,227 Abstain 20,525 Broker Non-votes 0
</TABLE>
(iv) The approval of the reincorporation of the Company in
Delaware. The number of votes cast for and against, as well as the number of
abstentions and broker non-votes with respect to such matter were as follows:
<TABLE>
<S> <C> <C> <C>
For 2,802,500 Against 39,275 Abstain 27,472 Broker Non-votes 2,244,806
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
Exhibit 27 Financial Data Schedule
(B) Form 8-K's filed during the quarterly period ended September 30,
1997:
1. Form 8-K/A filed July 3, 1997 with respect to the
Registrant's acquisition of Avalon Entertainment
Group, Inc., a Tennessee corporation, including
financial statements of Avalon Entertainment Group,
Inc.
2. Form 8-K filed August 13, 1997 with respect to the
Registrant's acquisition of a 51% interest in certain
entities comprising Avalon West Coast.
3. Form 8-K filed September 23, 1997 with respect to the
Registrant's reincorporation from Tennessee to
Delaware and its change of name.
15
<PAGE> 18
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 14th day of November, 1997.
TBA ENTERTAINMENT CORPORATION
By: /s/ Thomas Jackson Weaver III
--------------------------------------------
Thomas Jackson Weaver III Chairman of the
Board and Chief Executive Officer
By: /s/ Bryan J. Cusworth
--------------------------------------------
Bryan J. Cusworth, Chief Financial Officer
16
<PAGE> 19
INDEX TO EXHIBITS
<TABLE>
<CAPTION> SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 3,264,051
<SECURITIES> 0
<RECEIVABLES> 3,676,756
<ALLOWANCES> 0
<INVENTORY> 422,713
<CURRENT-ASSETS> 8,405,885
<PP&E> 52,633,000
<DEPRECIATION> 7,504,000
<TOTAL-ASSETS> 62,322,801
<CURRENT-LIABILITIES> 12,262,771
<BONDS> 21,932,540
0
10,000
<COMMON> 29,219,423
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 62,322,801
<SALES> 0
<TOTAL-REVENUES> 27,690,820
<CGS> 0
<TOTAL-COSTS> 24,536,256
<OTHER-EXPENSES> 637,635
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,305,314
<INCOME-PRETAX> 1,211,615
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,211,615
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,211,615
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
