SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 1998.
Commission file number 0-7107
Southern Scottish Inns, Inc.
LOUISIANA 72-0711739
(State or other jurisdiction of (IRS Employer
(Incorporation or organization) Identification No.)
1726 Montreal Circle, Tucker, Georgia 30084
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 770-938-5966
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 (or for such shorter period
that the registrant was required to file such reports), and (2) has be
subject to such filing requirements for the past 90 days.
Yes No X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Date Class Outstanding
June 30, 1998 Common Stock 2,349,729 Shares
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SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
September 30 December 31
1998 1997
(unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 111,131 $ 74,232
Accounts Receivable - Net 1,154,738 952,316
Accounts Receivable - Affiliates 151,380 146,784
Income Tax Receivable 26,993 26,993
Mortgages & Notes - Affiliates 106,337 105,835
Mortgages & Notes Receivable 460,704 411,167
Inventory 44,868 54,429
Prepaid Expenses 24,081 67,791
Loans - Employees 500 500
Interest Receivable 433,442 445,934
Deferred Tax Asset 16,039 19,459
Total Current Assets: $ 2,530,214 $ 2,305,440
PROPERTY, PLANT & EQUIPMENT:
Land $ 1,720,800 $ 1,720,800
Buildings & Building Improvements 3,841,943 3,841,941
Furn. Fixtures & Equip. 947,470 924,290
Leasehold Improvements 3,337 3,337
Total Prop. & Equipment: 6,513,550 6,490,368
Less: Accum. Depreciation (1,547,216) (1,331,640)
Total Prop. & Equip. (net): $ 4,966,334 $ 5,158,728
OTHER ASSETS:
Mortg. & Notes Receivable $ 4,630,121 $ 4,453,081
Mortg. & Notes - Affiliates 1,159,486 1,244,002
Investments in Unconsolidated Affiliates 610,986 555,786
Investments in Real Estate 228,449 228,449
Trademarks - Net 1,381,345 1,381,346
Organizational Costs 3,030 3,030
Deposits 5,897 5,897
Deferred Tax Asset 28,433 170,195
Deferred Tax Asset Valuation Allowance 4,789 4,789
Marketable Equity Securities 15,525 15,525
Total Other Assets: $8,068,061 $ 8,062,100
TOTAL ASSETS: $15,564,609 $15,526,268
</TABLE>
<TABLE>
SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDER'S EQUITY
<CAPTION>
September 30 December 31
1998 1997
<S> <C> <C>
CURRENT LIABILITIES:
Accounts Payable - Trade $ 198,008 $ 177,915
Interest Payable 175,098 191,034
Taxes Payable 24,674 86,352
Other Taxes Payable 286,778 444,100
Other Liabilities 587,139 243,993
Mortgages & Notes Payable 674,227 602,867
Mortgages & Notes Payable - Affiliates 227,244 214,783
Current Deferred Tax Liabilities 108,168 0
Deferred Severance Pay 12,000 12,000
Total Current Liabilities: $ 2,293,336 $ 1,973,044
LONG TERM LIABILITIES
Mortgages & Notes Payable $ 2,146,385 $ 2,292,047
Mortgages & Notes Payable - Affiliates 189,706 333,888
Escrow - Advance Construction Draw 100,200 100,200
Total Long Term Liabilities 2,436,291 2,726,135
DEFERRED AMOUNTS
Deferred Income - Installment $ 1,631,874 $ 1,576,562
Deferred Income Taxes 0 164,705
Deferred Severance Pay 257,705 257,705
Total Deferred Amounts: $ 1,889,579 $ 1,998,647
Total Liabilities &
Deferred Amounts: $ 6,619,205 $ 6,697,826
Minority Interest 611,531 811,765
STOCKHOLDER'S EQUITY:
Common Stock-No Par Value Auth.
5,000,000 Sh. Issued &
Outstanding 2,349,729 $ 6,003,871 $6,003,871
Paid-In Capital 42,201 42,201
Retained Earnings 1,970,605 1,970,605
Current Year's Income 317,196
Total Stockholder's Equity 8,333,873 8,016,677
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY: $15,564,609 $15,526,268
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<TABLE>
SOUTHERN SCOTTISH INNS, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<CAPTION>
FOR THE
NINE MONTHS ENDED
September 30,
1998 1997
<S> <C> <C>
REVENUES:
Franchising Revenues $ 1,426,269 $ 2,060,922
Financing Revenues 412,548 683,505
Sale of Furniture 19,813 225,468
Operating Lease Income 469,988 741,718
Gain on Sale of Assets -0- 78,764
Investment Income -0- 12,180
Legal Settlement Income 202,738 435,570
Other Income 65,676 158,308
Total Revenues: $ 2,597,032 $4,396,435
COSTS AND EXPENSES:
Operating Expense - Franchise Division $ 1,349,177 $ 2,143,736
Operating Expense - Financing & Investing 446,826 1,230,271
Cost of Sales - Furniture 59,010 122,264
Interest Expense 171,893 417,536
Depreciation & Amortization 215,577 273,173
Investment Loss 0 120,551
Loss on Sale of Property 0 1,329
Total Costs & Expenses $ 2,242,484 $ 4,308,860
Income (Loss) from Continuing Operations
Before Taxes & Extraordinary Items 354,549 87,575
Less: Provisions for Income Taxes (29,099) (44,998)
Income (Loss) before Minority Interest 325,450 42,577
Less: Minority Interest Income (Loss) of
Consolidated Subsidiaries (8,254) (12,134)
NET INCOME (LOSS): $ 317,196 $ 30,443
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NOTE TO FORM 10 Q
A summary of the registrant's significant accounting policies is set forth in
Note 1 to the consolidated financial statements of the registrant and its
subsidiaries in the registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997, filed with the Securities and Exchange
Commission, which report should be read in conjunction with this interim
report.
In the opinion of management, the accompanying interim financial statements
reflect all adjustments which are necessary to a fair statement of the
results for the interim periods presented.
Item 6. Exhibits and Reports on Form 8-K.
No exhibits are required to be furnished in accordance with 17 C.F.R.
Section 229.601.
SIGNATURES
(Originals on File)
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 hereunto duly authorized.
SOUTHERN SCOTTISH INNS, INC.
Date: March 17, 1999 By:
Jack M. Dubard, President
(Chief Financial Officer)
Date: March 17, 1999 By:
Mary R. Dubard, Corp.
Secretary
