SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q
Quarterly Report under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For Quarter Ended_______DECEMBER 31, 1997 ________Commission File No. 0-1957
UPTOWNER INNS, INC.
Exact name of registrant as specified in its charter
West Virginia 55-0457171
State or other jusrisdiction of I.R.S. Employer
incorporation or organization Identification Number
1415 4th Avenue, Huntington, West Virginia 25701
Address of principal executive office Zip Code
Registrants telephone number, including area code (304) 525-7741
Indicate by check mark whether 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 such reports), and
(2) Has been subject to such filing requirement for
the past 90 days.
_x_Yes ___No
Indicate the number of Shares outstanding of each of the Issuer's
classes of Common Stock, as of the close of the period covered
by this report.
_________Class___________ Outstanding at ___DECEMBER 31, 1997_______
Common Stock-$.50 par value 1,583,563 Shares
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997 AND 1996
ASSETS
DECEMBER 31, JUNE 30,
1997 1996 1997
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash $ 105,938 $ 241,411 $ 245,427
Accounts & Notes Rec. 26,537 21,208 25,203
Inventories 8,195 10,101 5,996
Prepaid Expenses 32,706 16,432 51,439
TOTAL CURRENT ASSETS 173,376 289,152 328,065
PROPERTY, PLANT AND EQUIPMENT
Land 1,554,112 1,386,777 1,554,112
Building & Improvement 4,989,345 5,322,204 4,989,345
Construction in Progress 3,145,929 234,636 1,698,276
Furniture & Equipment 1,463,768 1,447,447 1,463,768
TOTAL 11,153,154 8,391,064 9,705,501
Less: Accumulated Depreciation
and Amortization 3,719,834 3,714,968 3,625,966
TOTAL PROPERTY, PLANT
AND EQUIPMENT 7,433,320 4,676,096 6,079,535
OTHER ASSETS:
Deposits and Other 127,921 69,353 128,210
TOTAL OTHER ASSETS 127,921 69,353 128,210
TOTAL ASSETS 7,734,617 5,034,601 6,535,810
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997 AND 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
DECEMBER 31, JUNE 30,
1997 1996 1997
(Unaudited) (Unaudited)
CURRENT LIABILITIES:
Accounts Payable $ 610,609 $ 84,961 $ 635,311
Accrued Liabilities 107,052 92,594 103,360
Taxes Other Than Federal
Income Taxes 137,076 146,457 192,283
Current Portion of
Long-Term Debt. 272,482 281,925 272,482
TOTAL CURRENT LIABILITIES 1,127,219 605,937 1,203,436
LONG-TERM LIABILITIES
Notes &
Mortgages Payable 4,415,761 2,202,322 3,119,901
TOTAL LONG-TERM LIABILITIES 4,415,761 2,202,322 3,119,901
TOTAL LIABILITIES 5,542,980 2,808,259 4,323,337
STOCKHOLDER'S EQUITY
Common Stock, par value $0.50 per
share; authorized - 5,000,000
shares; issued 1,583,563 791,782 791,782 791,782
Additional Paid-In
Capital 1,032,290 1,032,290 1,032,290
Retained Earnings 367,565 402,270 388,401
TOTAL STOCKHOLDERS'
EQUITY 2,191,637 2,226,342 2,212,473
TOTAL LIABILITIES AND
STOCKHOLDER'S EQUITY 7,734,617 5,034,601 6,535,810
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE PERIODS ENDED DECEMBER 31, 1997 AND 1996
THREE MONTHS ENDED SIX MONTHS ENDED
12/31/97 12/31/96 12/31/97 12/31/96
REVENUES:
Rooms $ 217,030 $ 314,294 $ 466,342 $ 709,862
Food & Beverage 87,261 94,350 149,770 180,728
Telephone 6,777 8,655 14,603 16,663
Rents 65,465 59,021 130,399 116,047
Other 15,354 25,418 23,096 36,355
TOTAL REVENUE 391,887 501,738 784,210 1,059,655
COSTS AND EXPENSES:
Operating Departments
Cost of Sales 43,095 50,580 76,157 99,370
Salaries & Wages 105,019 130,956 208,028 248,770
Other 51,777 60,903 80,713 123,276
General & Admin. 12,862 32,237 28,092 59,301
Advertising 4,756 2,884 14,609 19,740
Utilities 26,842 23,399 58,488 56,645
Repair & Maint. 14,318 29,608 30,164 53,111
Interest 48,067 47,271 97,671 95,493
Taxes & Licenses 50,483 43,626 90,090 84,266
Insurance 14,303 13,683 27,257 27,295
Deprec. & Amort. 41,822 52,489 93,777 104,262
TOTAL COST & EXPENSES 413,344 487,636 805,046 971,529
NET OPERATING INCOME (LOSS)
BEFORE TAXES (21,457) 14,102 (20,836) 88,126
FEDERAL INCOME TAXES
AND PENALTIES
Provision for Taxes
on Income -0- -0- -0- -0-
Deferred Federal
Income Taxes -0- -0- -0- -0-
TOTAL FEDERAL INCOME
TAXES -0- -0- -0- -0-
TOTAL NET INCOME(LOSS) (21,457) 14,102 (20,836) 88,126
EARNINGS PER SHARE (.01) .01 (.01) .06
DIVIDENDS PER SHARE -0- -0- -0- -0-
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997
1997 1996
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Accrual Basis; from
Statement of Income $ (20,836) $ 88,126
Add (Deduct) to Reconcile Net Income to
Net Cash Flow:
Accts. Receivables (Increase) Decrease (1,334) 33,448
Inventories (Increase) Decrease (2,199) (875)
Prepaid Expenses Decrease (Increase) 18,733 11,966
Accounts Payable (Decrease) Increase (24,702) 13,779
Accrued Liabilities (Decrease) Increase 3,981 (1,447)
Taxes Other Than Federal Income Tax
Increase (Decrease) (55,207) 38,715
Depreciation Expense 93,868 104,262
NET CASH INFLOWS FROM OPERATIONS 12,304 287,974
CASH FLOW FROM INVESTING ACTIVITIES:
From Sale of Investments -0- -0-
From Purchase of Operational Assets (1,447,653) (394,604)
NET CASH INFLOW (OUTFLOW) FROM INVESTING
ACTIVITIES (1,447,653) (394,604)
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of Long-Term Debt 1,346,308
Payment on Notes and Mortgages (50,448) (115,957)
NET CASH INFLOW (OUTFLOW) FROM FINANCING
ACTIVITIES 1,295,860 (115,957)
Net Increases (Decreases) in Cash Plus Cash
Equivalents for the Six Months (139,489) (222,587)
Cash Plus Cash Equivalents at July 1 245,427 463,998
Cash Plus Cash Equivalents at December 31 105,938 241,411
Cash Paid for Interest in the Six Months 97,671 93,103
Cash Paid for Income Taxes in The Six Months -0- -0-
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UPTOWNER INNS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. The financial statements presented reflect Uptowner Inns, Inc.,
and its consolidated subsidiary: Motel and Restaurant Supply.
2. The foregoing statements are unaudited; however, in the opinion
of Management, all adjustments (comprising only normal recurring
accruals) necessary for a fair presentation of the financial
statements have been included. A summary of the Corporation's
significant accounting policies is set forth in Note 1 to the
Consolidated Financial Statements in the Corporation's Annual
Report to shareholders and Form 10-K for June 30, 1997.
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UPTOWNER INNS, INC., AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
DECEMBER 31, 1997
Revenues for the six months ended December 31, 1997 are 26% lower than
the comparable period in 1996 due to a decline in room revenues (34%), food
and beverage revenues (17.1%) , and telephone revenues (12.4%). The company
has had rent increases of 12.4% reflecting the continued demand for rental
housing in the community. The decline in revenues for the quarter ended
December 31, 1997 compared to the same quarter in 1996 is 22%.
These decreases are the result of the loss in January 1997 of the Holiday
Inn franchise and the public comments concerning the future use of the current
facility when the Holiday Inn Hotel & Suites is completed in early 1998.
management anticipates the revenue declines will level off and the company can
make better use of the current motel operation in the future or use the
facility in a different way to maintain revenues.
Expenses and costs have declined in concert with the decline of revenues,
but at a lower rate. management has endeavored to reduce costs in every
possible area, but the costs of operations in some aspects cannot be reduced.
Minimal staffing, utilities, insurance, interest, etc., will cause the costs
and expenses to reach a point where further reductions will be difficult or
impossible to effect.
The Statement of Cash Flows reflects the small amount of cash provided
from operating activities and the use of cash to develop the new facility
resulting in a significant decrease in cash of $139,489. This further affects
the liquidity of the company in a negative way. The current ratio was .48 to
1 at December 31, 1996 and had declined to .27 to 1 at June 30, 1997, with a
further decline to .15 to 1 at December 31, 1997.
Renegotiation of debt and the possible sale of some real estate holdings
are being pursued to alleviate the problem. These property sales would not
adversely affect the motel operations and would have minimal affect on gross
rent revenues.
The cash flow problems and the operating losses will not improve in the
next quarter as the winter months are not the busy time. It is unlikely the
liquidity will improve even with the sale of the property, but the debt
restructuring will be of some limited benefit over the next several months.
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UPTOWNER INNS, INC., AND SUBSIDIARIES
SIGNATURES
DECEMBER 31, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
UPTOWNER INNS, INC.
(Registrant)
Date: January 30, 1998 By Violet Midkiff
Violet Midkiff
President
Date: January 30, 1998 By James R. Camp
James R. Camp
Treasurer
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