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 SEPTEMBER 30, 1998 Commission File No. 0-1957
UPTOWNER INNS, INC.
Exact name of registrant as specified in its charter
West Virginia 55-0457171
State or other jurisdiction 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 SEPTEMBER 30, 1998
Common Stock-$.50 par value 1,583,563 Shares
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
SEPTEMBER 30, JUNE 30 ,
1998 1997 1998
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash $ 239,066 $ 205,587 $ 90,015
Accounts & Notes Rec. 120,847 28,097 23,726
Inventories 15,236 6,996 7,362
Prepaid Expenses 31,130 41,649 51,550
TOTAL CURRENT ASSETS 406,279 282,329 172,653
INVESTMENTS & FUNDS
Notes Receivable 47,416
TOTAL INVESTMENTS & FUNDS 47,416
PROPERTY, PLANT AND EQUIPMENT
Land 1,495,612 1,554,112 1,554,112
Building & Improvement 10,610,074 4,989,345 4,989,345
Construction in Progress 0 2,960,575 5,580,717
Furniture & Equipment 2,452,173 1,463,768 2,250,473
TOTAL 14,557,859 10,967,800 14,374,647
Less: Accumulated Depreciation
and Amortization 3,750,351 3,677,921 3,797,872
TOTAL PROPERTY, PLANT
AND EQUIPMENT 10,807,508 7,289,879 10,576,775
OTHER ASSETS:
Deposits and Other 128,745 128,210 129,287
TOTAL OTHER ASSETS 128,745 128,210 129,287
TOTAL ASSETS 11,389,948 7,700,418 10,878,715
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, JUNE 30,
1998 1997 1998
(Unaudited) (Unaudited)
CURRENT LIABILITIES:
Accounts Payable $ 575,453 $ 642,299 $ 517,587
Accrued Liabilities 208,175 92,058 145,809
Taxes Other Than Federal
Inicome Taxes 234,891 112,621 200,399
Notes Payable
Current Portion of
Long-Term Debt. 1,009,425 271,282 996,925
TOTAL CURRENT LIABILITIES 2,027,944 1,118,260 1,860,720
LONG-TERM LIABILITIES
Notes & Mortgages Payable 7,163,701 4,367,113 6,931,165
TOTAL LONG-TERM LIABILITIES 7,163,701 4,367,113 6,931,165
TOTAL LIABILITIES 9,191,645 5,485,373 8,791,885
STOCKHOLDER'S EQUITY
Common Stock, par value $0.50 per
share; authorized - shares; 791,782 791,782 791,782
Additional Paid-In
Capital 1,032,290 1,032,290 1,032,290
Retained Earnings 374,231 390,973 262,758
TOTAL STOCKHOLDERS EQUITY 2,198,303 2,215,045 2,086,830
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY 11,389,948 7,700,418 10,878,715
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30
3 MONTHS 3 MONTHS
9/30/98 9/30/97
REVENUES:
Rooms $ 391,595 $ 249,312
Food & Beverage 75,370 62,509
Telephone 8,690 7,826
Rents 60,074 64,934
Other 25,756 7,742
TOTAL REVENUE 561,485 392,323
COSTS AND EXPENSES:
Operating Departments
Cost of Sales 37,749 33,062
Salaries & Wages 188,930 103,009
Other 49,450 28,936
General Admin. 34,760 15,230
Advertising 10,350 9,853
Utilities 39,851 31,646
Repair & Maintenance 20,354 15,846
Interest 113,922 49,604
Taxes & Licenses 50,296 39,607
Insurance 21,645 12,954
Deprec. & Amort. 58,413 51,955
TOTAL COST AND EXPENSE 625,720 391,702
OPERATING INCOME (64,235) 621
OTHER INCOME (EXPENSE)
Interest Income 550 -0-
Gain on Sale of Assets 175,158
175,708
NET INCOME (LOSS) BEFORE TAXES 111,473 621
FEDERAL INCOME TAXES AND PENALTIES
Provision for Taxes on Income -0- -0-
Deferred Federal Income Taxes -0- -0-
Tax Penalties -0- -0-
TOTAL FEDERAL INCOME TAXES -0- -0-
TOTAL NET INCOME 111,473 621
EARNINGS PER SHARE .07 .00
DIVIDENDS PER SHARE $ -0- $ -0-
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UPTOWNER INNS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30
1998 1997
Cash Flow From Operating Activities:
Net Income (Accrual Basis; from
Statement of Income $ 111,473 $ 621
Add (Deduct) to Reconcile Net Income to
Net Cash Flow:
Accts. Receivables (Increase) Decrease (97,121) (2,894)
Inventories (Increase) Decrease (7,874) (1,000)
Prepaid Expenses Decrease (Increase) 20,420 9,790
Accounts Payable (Decrease) Increase 57,866 6,988
Accrued Liabilities (Decrease) Increase 62,366 (11,302)
Taxes Other Than Federal Income Tax
Increase (Decrease) 34,492 (77,711)
Deposits (Decrease) 542 -0-
Depreciation and
Amortization Expense 58,413 51,955
Gain on Sale of Assets (175,158) -0-
NET CASH OUTFLOW FROM OPERATIONS 65,419 (23,553)
Cash Flow from Investing Activities:
Cash Inflows:
Proceeds From Sale of Real Estate 184,523 -0-
Collection of Note 2,084 -0-
Cash Outflows:
Paid for Operational Assets & Other (348,011) (1,262,299)
NET CASH INFLOW (OUTFLOW) FROM INVESTING
ACTIVITIES (161,404) (1,262,299)
Cash Flow from Financing Activities:
Cash Outflows:
Loan Proceeds 315,245 1,262,299
Payment on Notes and Mortgages (70,209) (16,287)
NET CASH INFLOW (OUTFLOW) FROM FINANCING
ACTIVITIES 245,036 1,246,012
Net Increases (Decreases) in Cash Plus Cash
Equivalents for the Three Months 149,051 (39,840)
Cash Plus Cash Equivalents at July 1 90,015 245,427
Cash Plus Cash Equivalents at September 30 239,066 205,587
Cash Pd for Interest in the Three Months 87,581 48,409
Cash Pd for Income Taxes in The Three Months -0- -0-
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UPTOWNER INNS, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. The financial statements presented reflect UpTowner Inns, Inc.,
and its consolidated subsidiaries: 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, 1998.
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UPTOWNER INNS, INC., AND SUBSIDIARIES
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEPTEMBER 30, 1998
The quarter ending September 30, 1998 resulted in earnings per share
of $.07 which was an increase over the comparable period in 1997 that
resulted in an approximate break-even. Revenues were up 43% due to the
opening in last August of the new facility (135 room Holiday Inn
Hotel & Suites). The new hotel has a successful operation to the end
of the quarter that increased Room Revenues 57%, Food and Beverage 21%
and Telephone Income 11%, Other Income was up 233%. Rent Revenues
declined 7% due to the sale of real estate in July . This sale created
a gain of $175,158 and was the basis for the reported profit. The
operating income was a loss of $64,235 compared to $621 profit in
the 1997 period. While revenues increased due to the new hotel,
expenses increased greatly as well. Total expenses were up 60% over
1997's first quarter. All categories were up and especially Salaries &
Wages (up 83%), General & Administrative (up 128%), Interest (up 130%),
Insurance (up 67%), and Other Expenses (up 71%). The overhead of the
new hotel will be relatively higher, but the revenue potential is
higher (approximately $80 per room per day compared to about $50 per
room for the older facility).
The Statement of Cash Flows reflects an increase in cash due
mainly to borrowed funds. The current ratio decreased from .25 to .20
indicating a further deterioration of the liquidity of the company.
The near future will not result in any significant improvement due
to expected declines in revenues for the season of the year.
Continued efforts to restructure debt may yield some benefit, but it
would likely take many months before any significant improvements would
be expected.
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UPTOWNER INNS, INC., AND SUBSIDIARIES
SIGNATURES
SEPTEMBER 30, 1998
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 27, 1999 By /s/ Violet Midkiff
Violet Midkiff
President
Date: January 27, 1999 By /s/ James R. Camp
James R. Camp
Treasurer
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