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, 1999.
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 22,1999
: 1,401,162
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
SWISS CHALET, INC.
CONDENSED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED OCTOBER 1999 AND 1998
(UNAUDITED) - NOTE A
SIX MONTHS ENDED THREE MONTHS ENDED
OCTOBER 31 OCTOBER 31
1999 1998 1999 1998
_____________________ _______________________
Net Sales and $3,047,177 $2,218,980 $1,477,881 $1,199,796
Other Income
COST AND EXPENSES
Cost of Sales 52,999 35,122 26,605 17,778
Operating Expenses 1,936,797 1,754,703 964,720 867,343
and other deductions
Interest Expense - - - -
NET INCOME $1,057,381 429,155 486,556 314,675
Weighted Average 1,401,162 1,401,162 1,401,162 1,401,162
Number of Common
Shares Outstanding
NET INCOME PER SHARE 0.75c 0.31c 0.35c 0.22c
-1-
SWISS CHALET, INC.
CONDENSED BALANCE SHEET
OCTOBER 31, 1999
(UNAUDITED) - NOTE A
OCTOBER 31
1999
__________
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $3,964,121
Securities held to maturity
Accounts Receivable, Net 319,139
Inventories 39,235
Other Current Assets 59,223
__________
TOTAL CURRENT ASSETS $4,381,718
INVESTMENT IN CONDOMINIUM AND LAND
PROPERTY, PLANT AND EQUIPMENT, Net 3,463,076
OTHER ASSETS 125,246
__________
TOTAL ASSETS $7,970,040
__________
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts Payable and Accrued Expenses $ 580,869
Dividends Payable 128,509
__________
TOTAL CURRENT LIABILITIES $ 709,378
Deferred Compensation Liability 121,500
SHAREHOLDER'S EQUITY,
Common Stock at stated value $ 700,581
Additional paid in capital 24,069
Retained Earnings 6,414,512
__________
$7,139,162
__________
TOTAL LIABILITIES $7,970,040
__________
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SWISS CHALET, INC.
CONDENSED STATEMENTS OF CHANGES IN CASH FLOWS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1999 AND 1998
(UNAUDITED) - NOTE A
SIX MONTHS ENDED
OCTOBER 31
1999 1998
Cash Flow from Operations :
Net Income $ 1,057,381 $ 429,155
Adjustments (net) 64,790 ( 201,928)
__________ _________
Net Cash from operations $1,122,171 $ 227,227
Cash Flow from Investing activities 341,961 628,957
Cash Flow from Financing activities ( 968,296) ( 968,329)
__________ _________
Increase/(Decrease) in Cash Flow $ 495,836 $( 112.145)
Cash and Cash equivalents - beginning 3,468,285 1,637,807
__________ _________
Cash and Cash equivalents - ending $3,964,121 $1,525,662
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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, 1999.
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 $30,000.00
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:
SIX MONTHS ENDED THREE MONTHS ENDED
OCTOBER 31 OCTOBER 31
INCREASE INCREASE
(DECREASE) % (DECREASE) %
_______________________________________
Net Sales & Other Income $ 828,197 37.3 $ 278,085 23.1)
Cost of Sales 17,877 50.9 8,827 49.6
Operation Expenses and 182,094 10.4 97,377 11.2
Other Deductions
Interest - N/A - N/A
Net Income 628,226 146.4 171,881 54.6
-5-
SWISS CHALET, INC.
The comparative table of occupancies and average rates is shown below
for the six month period.
Occupancy Average Rate
1999 1998 1999 1998
May 80% 62% $100.13 $88.09
June 87% 57% 97.29 91.13
July 89% 57% 95.71 87.42
Aug 91% 67% 98.24 85.38
Sept 73% 53% 97.87 85.61
Oct 75% 97% 96.91 88.10
Average 6 months 82% 66% $97.67 $87.63
The effects of Hurricane Georges in September 1998 continue to
dominate the financial comparisons and results of the Company. The highly
competitive market that had existed prior to the hurricane was replaced by
one in which some direct competitors closed ( and in some cases have not
reopened) and pressure on rates disappeared. As the competitive situation
is now returning to normal and the influx of hurricane relief personnel
will not be repeated this year the best we can hope for in the second half
of the year is not to give back too much of the substantial gains we have
made in our profits. Expenses have remained well controlled and we are
confident that we can maintain a high level of profitability through the
upcoming winter season.
The Company's primary source of working capital is from funds provided
from operations. Working capital increased over the six month period by
$1,148,145 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.
The Company's Accounting, Property Management System, Electronic
Keys, and stock registration systems are Y2K compliant and we have almost
completed replacement of our telephone equipment. We are on-line with the
Best Western reservations system which is, to our understanding, fully
compliant. Mechanical equipment is still being evaluated but we do not
consider our exposure to be material.
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 :11/22/99 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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<NAME> SWISS CHALET , INC.
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