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: January 31, 1997.
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 February 24,1997
: 1,401,162
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
SWISS CHALET, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED JANUARY 1997 AND 1996
(UNAUDITED) - NOTE A
NINE MONTHS ENDED THREE MONTHS ENDED
JANUARY 31 JANUARY 31
1997 1996 1997 1996
_____________________ _______________________
Net Sales and $3,796,588 $3,510,054 $1,304,885 $1,354,365
Other Income
COST AND EXPENSES
Cost of Sales 57,375 64,179 13,722 22,587
Operating Expenses 2,670,449 2,546,233 917,693 916,423
and other deductions
Interest Expense - - - -
NET INCOME $1,068,764 899,642 373,470 415,355
Weighted Average 1,401,162 1,401,162 1,401,162 1,401,162
Number of Common
Shares Outstanding
NET INCOME PER SHARE 0.76c 0.64c 0.27c 0.30c
-1-
SWISS CHALET, INC.
CONDENSED BALANCE SHEET
JANUARY 31, 1997
(UNAUDITED) - NOTE A
JANUARY 31
1997
__________
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $1,477,855
C.D. (over 3 months) 0
Accounts Receivable, Net 391,074
Inventories 10,275
Other Current Assets 67,463
__________
TOTAL CURRENT ASSETS $1,946,667
INVESTMENT IN TREASURY BILLS 996,357
INVESTMENT IN CONDOMINIUM AND LAND
PROPERTY, PLANT AND EQUIPMENT, Net 3,001,192
OTHER ASSETS 54,816
__________
TOTAL ASSETS $5,999,032
_________
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 531,335
Dividends Payable 84,519
__________
TOTAL CURRENT LIABILITIES $ 615,854
Deferred Compensation Liability 46,800
SHAREHOLDER'S EQUITY,
Common Stock at stated value $ 700,581
Additional paid in capital 24,069
Retained Earnings 4,611,728
__________
$5,336,378
__________
TOTAL LIABILITIES $5,999,032
__________
-2-
SWISS CHALET, INC.
CONDENSED STATEMENTS OF CHANGES IN CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 1997 AND 1996
(UNAUDITED) - NOTE A
NINE MONTHS ENDED
JANUARY 31
1997 1996
Cash Flow from Operations :
Net Income $ 1,068,764 $ 899,642
Adjustments (net) 68,960 249,108
___________ _________
Net Cash from operations $ 1,137,724 $ 1,148,750
Cash Flow from Investing activities (1,222,875) 519,963
Cash Flow from Financing activities (1,177,380) ( 968,611)
__________ _________
Increase/(Decrease) in Cash Flow $(1,262,531) $ 700,152
Cash and Cash equivalents - beginning 2,740,386 1,208,013
__________ __________
Cash and Cash equivalents - ending $ 1,477,855 $ 1,908,115
-3-
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.
-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:
NINE MONTHS ENDED THREE MONTHS ENDED
JANUARY 31 JANUARY 31
INCREASE INCREASE
(DECREASE) % (DECREASE) %
_______________________________________
Net Sales & Other Income $ 286,534 8.2 $( 49,480) ( 3.7)
Cost of Sales ( 6,804) (10.6) ( 8,865) (39.2)
Operation Expenses and 124,216 4.9 1,270 0.1
Other Deductions
Interest - N/A - N/A
Net Income $ 169,122 18.8 $( 41,885) (10.1)
-5-
SWISS CHALET, INC.
The comparative table of occupancies and average rates is shown below
for the nine month period.
Occupancy Average Rate
1996/97 1995/96 1996/97 1995/96
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
Nov 71% 79% 84.87 82.58
Dec 72% 78% 90.36 86.58
Jan 76% 79% 108.87 105.35
Average 9 months 75% 71% $89.34 $86.08
The Company had an disappointing third quarter as occupancy levels
were not able to sustain the growth of the first two quarters and, in fact,
fell in each of the three months. Average Daily Rates reflected the modest
increases built into our rate structure. 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 and, in addition to labor costs, the Company has been
very successful in keeping expenses under control. 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. Although working capital decreased over the nine month
period by $325,529 this was primarily due to a change in investment policy
from short to longer term instruments. 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 :02/24/97 BY:__________________________
PETER D. SOMECH
Treasurer, Director and
Principal Financial Officer
-7-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
<CIK> 0000095898
<NAME> SWISS CHALET , INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JAN-31-1997
<CASH> 1,477,855
<SECURITIES> 996,357
<RECEIVABLES> 391,074
<ALLOWANCES> 0
<INVENTORY> 10,275
<CURRENT-ASSETS> 1,946,667
<PP&E> 6,272,360
<DEPRECIATION> 3,271,169
<TOTAL-ASSETS> 5,999,032
<CURRENT-LIABILITIES> 615,854
<BONDS> 0
<COMMON> 700,581
0
0
<OTHER-SE> 4,635,797
<TOTAL-LIABILITY-AND-EQUITY> 5,999,032
<SALES> 3,796,588
<TOTAL-REVENUES> 3,796,588
<CGS> 57,375
<TOTAL-COSTS> 57,375
<OTHER-EXPENSES> 2,670,449
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,068,764
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,068,764
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,068,764
<EPS-PRIMARY> 0.76
<EPS-DILUTED> 0.76
</TABLE>
