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, 1998.
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 15,1998
: 1,401,162
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
SWISS CHALET, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED JANUARY 1998 AND 1997
(UNAUDITED) - NOTE A
NINE MONTHS ENDED THREE MONTHS ENDED
JANUARY 31 JANUARY 31
1998 1997 1998 1997
_____________________ _______________________
Net Sales and $3,774,617 $3,796,588 $1,370,576 $1,304,885
Other Income
COST AND EXPENSES
Cost of Sales 63,559 57,375 21,698 13,722
Operating Expenses 2,722,141 2,670,449 947,010 917,693
and other deductions
Interest Expense - - - -
NET INCOME $ 988,917 1,068,764 401,868 373,470
Weighted Average 1,401,162 1,401,162 1,401,162 1,401,162
Number of Common
Shares Outstanding
NET INCOME PER SHARE 0.71c 0.76c 0.29c 0.27c
-1-
SWISS CHALET, INC.
CONDENSED BALANCE SHEET
JANUARY 31, 1998
(UNAUDITED) - NOTE A
JANUARY 31
1998
__________
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $1,754,995
Securities held to maturity 1,228,960
Accounts Receivable, Net 396,448
Inventories 40,776
Other Current Assets 46,709
__________
TOTAL CURRENT ASSETS $3,467,888
INVESTMENT IN CONDOMINIUM AND LAND
PROPERTY, PLANT AND EQUIPMENT, Net 2,926,701
OTHER ASSETS 73,847
__________
TOTAL ASSETS $6,468,436
__________
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 568,839
Dividends Payable 99,870
__________
TOTAL CURRENT LIABILITIES $ 668,709
Deferred Compensation Liability 65,400
SHAREHOLDER'S EQUITY,
Common Stock at stated value $ 700,581
Additional paid in capital 24,069
Retained Earnings 5,009,677
__________
$5,734,327
__________
TOTAL LIABILITIES $6,468,436
__________
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SWISS CHALET, INC.
CONDENSED STATEMENTS OF CHANGES IN CASH FLOWS
FOR THE NINE MONTHS ENDED JANUARY 31, 1998 AND 1997
(UNAUDITED) - NOTE A
NINE MONTHS ENDED
JANUARY 31
1998 1997
Cash Flow from Operations :
Net Income $ 988,917 $1,068,764
Adjustments (net) 73,009 68,960
__________ _________
Net Cash from operations $ 1,061,926 $1,137,724
Cash Flow from Investing activities ( 343,639) (1,222,875)
Cash Flow from Financing activities (1,245,695) (1,177,380)
__________ _________
Increase/(Decrease) in Cash Flow $( 527,408) $(1,262,531)
Cash and Cash equivalents - beginning 2,282,403 2,740,386
__________ _________
Cash and Cash equivalents - ending $1,754,995 $1,477,855
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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, 1997.
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 $( 21,971) (0.6) $ 65,691 5.0
Cost of Sales 6,184 10.8 7,976 55.9
Operation Expenses and 51,692 1.9 29,317 3.2
Other Deductions
Interest - N/A - N/A
Net Income ( 79,847) ( 7.5) 28,398 7.6
-5-
SWISS CHALET, INC.
The comparative table of occupancies and average rates is shown below
for the six month period.
Occupancy Average Rate
1997/98 1996/97 1997/98 1996/97
May 64% 66% $89.00 $86.96
June 72% 70% 90.16 87.16
July 71% 70% 85.86 85.35
Aug 79% 79% 85.95 85.07
Sept 64% 82% 88.70 87.65
Oct 75% 87% 87.90 87.10
Nov 76% 71% 87.16 84.87
Dec 74% 72% 92.13 90.36
Jan 76% 76% 108.34 108.87
Average 9 months 72% 75% $90.67 $89.34
As reported in previous filings the Company had benefited, in the
prior year, from an unusually high occupancy during September and October
due to the hurricane relief efforts conducted by the Red Cross using the
hotel as their base. As this situation did not recur in the current year
the Company suffered considerably lower income in those months. During the
quarter covered by this report the Company had an overall increase in
occupancy resulting in a modest gain in net profit for the quarter. Payroll
and other expense remained well controlled during each of the first three
quarters. The Company has reached an agreement with it's unionized
employees covering three years from December 1,1997 during which period
wage increases will be less than 3% per annum. This should allow the
Company to maintain competitive rates with new hotels as they open during
the year. 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 nine month period by
$783,732 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
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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 :02/27/98 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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<CASH> 1,754,995
<SECURITIES> 1,228,960
<RECEIVABLES> 396,448
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<INVENTORY> 40,776
<CURRENT-ASSETS> 3,467,888
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<TOTAL-ASSETS> 6,468,436
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<OTHER-SE> 5,033,746
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