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: July 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 July 31,1998 1,401,162
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
SWISS CHALET, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED JULY 1998 AND 1997
(UNAUDITED) - NOTE A
THREE MONTHS ENDED
JULY 31
1998 1997
________________
Net Sales and $1,019,184 $1,174,401
Other Income
COST AND EXPENSES
Cost of Sales 17,344 19,192
Operating Expenses 887,360 866,674
and other deductions
__________ ___________
NET INCOME $ 114,480 288,535
Weighted Average 1,401,162 1,401,162
Number of Common
Shares Outstanding
NET INCOME PER SHARE 0.08c 0.21c
-1-
SWISS CHALET, INC.
CONDENSED BALANCE SHEET
JULY 31, 1998
(UNAUDITED) - NOTE A
JULY 31
1998
__________
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $1,375,049
Securities held to maturity 1,252,764
Accounts Receivable, Net 116,206
Inventories 42,643
Other Current Assets 30,386
__________
TOTAL CURRENT ASSETS $2,817,048
INVESTMENT IN CONDOMINIUM AND LAND
PROPERTY, PLANT AND EQUIPMENT, Net 3,178,027
OTHER ASSETS 106,588
__________
TOTAL ASSETS $6,101,663
__________
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 360,337
Dividends Payable 112,354
__________
TOTAL CURRENT LIABILITIES $ 472,691
Deferred Compensation Liability 99,500
SHAREHOLDER'S EQUITY
Common Stock at stated value $ 700,581
Additional paid in capital 24,069
Retained Earnings 4,804,822
__________
$5,529,472
__________
TOTAL LIABILITIES $6,101,663
__________
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SWISS CHALET, INC.
CONDENSED STATEMENTS OF CHANGES IN CASH FLOWS
FOR THE THREE MONTHS ENDED JULY 31, 1998 AND 1997
(UNAUDITED) - NOTE A
THREE MONTHS ENDED
JULY 31
1998 1997
Cash Flow from Operations :,
Net Income $ 114,480 $ 288,535
Adjustments (net) 71,630 188,453*
__________ __________
Net Cash from operations $ 186,110 $ 476,988
Cash Flow from Investing activities 519,461 $( 35,102)
Cash Flow from Financing activities ( 968,329) ( 968,788)
__________ _________
Increase/(Decrease) in Cash Flow $( 262,758) $( 526,902)
Cash and Cash equivalents - beginning 1,637,807 2,282,403
__________ __________
Cash and Cash equivalents - ending $1,375,049 $1,755,501*
*Includes approx. $220,000 credited to the bank account in error by
Company's securities broker. This was corrected in August 1997.
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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, 1998.
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:
THREE MONTHS ENDED
JULY 31
INCREASE
(DECREASE) %
__________ _____
Net Sales & Other Income $(155,217) (13.2)
Cost of Sales ( 1,848) ( 9.6)
Operation Expenses and 20,686 2.3
Other Deductions
Net Income (174,055) (60.3)
-5-
SWISS CHALET, INC.
The comparative table of occupancies and average rates is shown below
for the three month period.
Occupancy Average Rate
1998 1997 1998 1997
May 62% 64% $88.09 $89.00
June 57% 72% 91.13 90.16
July 57% 71% 87.42 85.86
Average 3 mon. 59% 69% $88.82 $88.30
The Company continues to pursue its policy of competitive rates both
for groups and special weekend packages during the slower summer season.
As predicted the increased competition and the opening of new hotels has
put a dent in occupancy for our property. As the introductory offers by our
new competitors expire we are confident that we can begin to recover our
market share. The construction and remodelling taking place in the lobby
area has been an additional negative for our business and we expect this to
continue through , at least, the end of September. We hope that the new
look will prove attractive to our guests and help us to bring in additional
business.
The Company's primary source of working capital is from funds provided
from operations. Working capital decreased over the three month period by
$99,835 and, as mentioned in previous reports, 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 : Sep 04, 1998 BY:__________________________
PETER D. SOMECH
Treasurer, Director and
Principal Financial Officer
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THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
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TO SUCH 10QSB.
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<CIK> 0000095898
<NAME> SWISS CHALET , INC.
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