FORM 10-QSB
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: October 31, 1996.
OR
( ) Transition Report Under Section 13 or 15(d)
The Securities Exchange Act of 1934
Commission File Number O-2825
SWISS CHALET, INC.
(Exact name of Registrant as specified in its charter)
COMMONWEALTH OF PUERTO RICO 66-020-0307
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
105 De Diego Avenue
Santurce, Puerto Rico 00911
(Address of principal executive offices) (Zip Code)
(787)721-1200
(Registrant's telephone number, including area code)
Unchanged
(Former name, former address and former fiscal year, if changed since last
report)
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 requirements for the past 90 days.
Yes__X___ No ______
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12,13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes__X___ No______
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of the latest practical date :
Number of shares of Common Stock outstanding at November 15,1996
: 1,401,162
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
SWISS CHALET, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED OCTOBER 1996 AND 1995
(UNAUDITED) - NOTE A
SIX MONTHS ENDED THREE MONTHS ENDED
OCTOBER 31 OCTOBER 31
1996 1995 1996 1995
_____________________ _______________________
Net Sales and $2,491,703 $2,155,689 $1,342,056 $1,114,978
Other Income
COST AND EXPENSES
Cost of Sales 43,653 41,592 21,140 21,472
Operating Expenses 1,752,756 1,629,810 890,768 808,232
and other deductions
Interest Expense - - - -
NET INCOME $ 695,294 484,287 430,148 285,274
Weighted Average 1,401,162 1,401,162 1,401,162 1,401,162
Number of Common
Shares Outstanding
NET INCOME PER SHARE 0.49c 0.34c 0.31c 0.20c
-1-
SWISS CHALET, INC.
CONDENSED BALANCE SHEET
OCTOBER 31, 1996
(UNAUDITED) - NOTE A
OCTOBER 31
1996
__________
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $1,775,434
C.D. (over 3 months) 110,000
Accounts Receivable, Net 403,033
Inventories 18,726
Other Current Assets 74,229
__________
TOTAL CURRENT ASSETS $2,381,422
INVESTMENT IN TREASURY BILLS 496,400
INVESTMENT IN CONDOMINIUM AND LAND
PROPERTY, PLANT AND EQUIPMENT, Net 2,897,251
OTHER ASSETS 51,929
__________
TOTAL ASSETS $5,827,002
__________
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 459,648
Dividends Payable 81,014
__________
TOTAL CURRENT LIABILITIES $ 540,662
Deferred Compensation Liability 43,200
SHAREHOLDER'S EQUITY,
Common Stock at stated value $ 700,581
Additional paid in capital 24,069
Retained Earnings 4,518,490
__________
$5,243,140
__________
TOTAL LIABILITIES $5,827,002
__________
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SWISS CHALET, INC.
CONDENSED STATEMENTS OF CHANGES IN CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED) - NOTE A
SIX MONTHS ENDED
OCTOBER 31
1996 1995
Cash Flow from Operations :
Net Income $ 695,294 $ 484,287
Adjustments (net) ( 98,175) 129,027
__________ _________
Net Cash from operations $ 597,119 $ 613,314
Cash Flow from Investing activities ( 661,418) 533,044
Cash Flow from Financing activities ( 900,653) ( 761,100)
__________ _________
Increase/(Decrease) in Cash Flow $( 964,952) $ 385,258
Cash and Cash equivalents - beginning 2,740,386 1,208,013
__________ _________
Cash and Cash equivalents - ending $1,775,434 $1,593,271
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SWISS CHALET, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited Condensed Financial Statements have been
prepared in accordance with the instructions to Form 10-QSB and, therefore,
do not include all information and footnotes necessary for a fair
presentation of financial position in conformity with generally accepted
accounting principles. The unaudited Condensed Financial Statements contain
all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of Management, necessary to a fair statement of the
results for the period presented. The interim results are not necessarily
indicative of the results which may be expected for the full year. The
subject Condensed Financial Statements should be read in conjunction with
the summary of significant accounting policies set forth in Note 1 to the
Financial Statements included in the Company's Annual Report to
Shareholders for the year ended April 30, 1996.
Depreciation of the original building is spread over a 50 year life
while equipment is depreciated over useful lives ranging from 5 to 10 years
depending on its type.
NOTE B - PROVISIONS FOR INCOME TAX
Local Income Tax is not provided for until the year end. however, if
such provision had been made it would have amounted to less than $25,000.00
for the three month period.
NOTE C - REPAYMENT OF LONG TERM DEBT
Even through the outstanding debt with the Government Development Bank
and PRIDCO was to be amortised monthly until 1995 the Company elected to
make early repayment on September 1, 1993 thus avoiding further interest at
10%.
-4-
PART I
SWISS CHALET, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is Management's discussion and analysis of certain
significant factors which have affected the Company's earnings during the
periods included in the accompanying Condensed Statements of Income.
A summary of the period to period changes in the principal items
included in the Condensed Statement of Income is shown below:
SIX MONTHS ENDED THREE MONTHS ENDED
OCTOBER 31 OCTOBER 31
INCREASE INCREASE
(DECREASE) % (DECREASE) %
_______________________________________
Net Sales & Other Income $ 336,014 15.6 $ 227,078 20.4
Cost of Sales 2,061 5.0 ( 332) ( 1.5)
Operation Expenses and 122,946 7.5 82,536 10.2
Other Deductions
Interest - N/A - N/A
Net Income 211,007 43.6 144,874 50.8
-5-
SWISS CHALET, INC.
The comparative table of occupancies and average rates is shown below
for the six month period.
Occupancy Average Rate
1996 1995 1996 1995
May 66% 65% $86.96 $85.99
June 70% 62% 87.16 84.03
July 70% 69% 85.35 78.64
Aug 79% 69% 85.07 83.17
Sept 82% 72% 87.65 83.36
Oct 87% 67% 87.10 82.27
Average 6 months 76% 67% $86.56 $82.85
The Company had an excellent second quarter especially in September
and October when , once again, the hotel had the good fortune to be
selected as the temporary housing for Red Cross personnel coping with the
hurricane relief efforts for "Hortense". The three year contract with union
employees signed in December '94 containing average increases of less than
3% over the contract period has helped the Company to remain competitive in
its market segment. In addition to labor costs the Company has been very
successful in keeping expenses under control and, as a result, much of the
sales increase has been reflected in the bottom line. As mentioned in
earlier reports the Company has eliminated all long term debt and interest
expense due to the strong cash flows generated from operations.
The Company's primary source of working capital is from funds provided
from operations. Working capital increased over the six month period by
$184,418 and, as mentioned above, all long term debt has been repaid. The
Company believes that it's excess cash from operations will be sufficient
to finance it's long and short term capital needs including the payment of
accrued dividends.
PART II
6. EXHIBITS AND REPORTS ON FORM 8K
NONE
-6-
SWISS CHALET, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its be half by
the undersigned thereunto duly authorized.
SWISS CHALET, INC.
DATE :11/15/96 BY:__________________________
PETER D. SOMECH
Treasurer, Director and
Principal Financial Officer
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
10QSB REPORT FOR THE QUARTER AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH 10QSB.
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<NAME> SWISS CHALET , INC.
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<SECURITIES> 606,400
<RECEIVABLES> 403,033
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<INVENTORY> 18,726
<CURRENT-ASSETS> 2,381,422
<PP&E> 6,100,148
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<OTHER-SE> 4,542,559
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