CONFORMED COPY
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT
Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For Quarter ended June 30, 1995
CENTURY PARK PICTURES CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 0-14247 41-1458152
(State of Incorporation) (Commission File Number) (IRS ID Number)
4701 IDS Center, Minneapolis, Minnesota 55402
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (612) 333-5100
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 twelve (12) months and (2) has been subject to such filing
requirements for the past ninety (90) days. _x_ Yes ___ No
As at June 30, 1995, 8,636,952 common shares, $.001 par value, were outstanding.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
This information is included following "Index to Consolidated Financial
Statements".
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
OPERATIONS
Period Ended June 30, 1995 compared to Period Ended June 30, 1994.
Admissions revenues were $1,824,950 for the quarter ended June 30, 1995, of
which approximately $976,000 were generated by the Company's wholly owned
subsidiary International Theatres Corporation ("ITC"), and $849,000 by the
Company's 50.1% owned subsidiary Willy Bietak Productions, Inc. ("WBPI").
Admissions revenues were $1,490,783 for the quarter ended June 30, 1994, of
which approximately $864,000 were generated by ITC and $627,000 by WBPI. The
approximate $112,000 increase in revenues generated by ITC during the current
period was primarily attributable to increased attendance and increased ticket
prices, offset in part by increased promotional and complimentary tickets. The
approximate $222,000 increase in revenues generated by WBPI during the current
period was primarily attributable to timing and additional high season weeks in
theme parks in the current year which resulted in increased revenue of
approximately $74,000 in theme parks, and increased costume shop revenue of
approximately $127,000.
ITC's food, beverage and merchandise sales were $950,296 for the quarter ended
June 30, 1995, compared to $781,353 for the comparable prior year period, and
their related cost of sales were $294,718 and $244,377, respectively. The
approximate $169,000 increase in current year sales was due primarily to
increased attendance. The cost of sales for both periods were comparable as a
percent of food, beverage and merchandise sales.
Operating expenses for the quarter ended June 30, 1995 were $2,424,511 compared
to $1,954,457 for the comparable prior year period, representing an increase of
$470,054. ITC's operating expenses increased in the current year by
approximately $304,000 primarily due to increased attendance, which was offset
in part by cost containment actions taken by management since 1993. WBPI's
operating expenses increased by approximately $166,000 in the current year
primarily due to timing and additional high season weeks in theme parks in the
current year which resulted in increased expenses of approximately $21,000 in
theme parks, and increased costume shop expenses of approximately $125,000.
General and administrative expenses were $394,338 for the quarter ended June 30,
1995 compared to $474,483 for the comparable prior year period. The decrease in
general and administrative expenses was primarily due to cost containment
actions at ITC.
Net loss for the quarter ended June 30, 1995 was $363,089 compared to a net loss
of $423,415 for the comparable prior year period. The reduction in net loss is
primarily due to timing and additional high season weeks in theme parks in the
current year which resulted in improved results for WBPI of approximately
$89,000, which was offset by increased losses from of approximately $19,000 and
$10,000 from CPPC and ITC, respectively.
LIQUIDITY AND SOURCES OF CAPITAL
Cash used by operating activities for the nine months ended June 30, 1995 was
$224,364 compared to $408,350 for the comparable prior year period. The primary
use of cash in operating activities was payment of accounts payable to ITC's
vendors. The primary source of cash from operating activities was deferred
revenue resulting from prepayments by ITC's customers, which represent gift
certificates and tickets paid for in advance. Cash used in investing activities
for the nine months ended June 30, 1995 was $8,191, which was primarily
comprised of purchases of equipment of $55,627, which was offet in part by
decreased amounts due from related parties of $47,436. Cash used in financing
activities for the nine months ended June 30, 1995 was $173,272, which was used
for reduction of notes payable and long-term capitalized lease obligations.
At June 30, 1995, the Company had a working capital deficit of ($1,804,922) and
cash totaling $40,814. The working capital deficit at June 30, 1995 was
primarily comprised of accounts payable of $513,566 and deferred revenues of
$1,334,752, of which approximately $984,000 related to advance ticket sales for
ITC's operations. Management believes the incremental cost that ITC will incur
to realize these deferred revenues will be offset by the gross profit from food,
beverage and merchandise sales to such customers.
The Company intends to continue to seek out potential acquisitions. It is
probable that any significant acquisitions would require long-term financing.
However, there are no assurances that the Company will complete any acquisitions
or that it will obtain financing under terms acceptable to the Company.
Management intends to continue to restrict expenditures with respect to the
future development of the Company's entertainment properties and to the
marketing of its completed properties. The Company had no material commitments
for capital expenditures as of June 30, 1995 and capital expenditures for the
remainder of fiscal 1995 are expected to be immaterial.
Management believes its current cash position, along with anticipated cash flow
from ITC's and WBPI's operations, and WBPI's existing bank line of credit
providing for $100,000 available funds, will be sufficient to satisfy working
capital requirements for fiscal 1995. However, there can be no assurances that
anticipated cash flow from ITC's and WBPI's operations will be achieved.
Management is currently evaluating its options for raising additional working
capital. However, there are no assurances that additional working capital will
be raised.
PART II
ITEM 1. LEGAL PROCEEDINGS.
NONE
ITEM 2. CHANGES IN SECURITIES.
NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE
ITEM 5. OTHER INFORMATION.
NONE
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K.
Exhibit 27 - For SEC Use
NONE
SIGNATURES
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.
Dated as of August 15, 1995.
CENTURY PARK PICTURES CORPORATION
By:/s/Ronald L. Leckelt
Ronald L. Leckelt
Chief Financial Officer
By: /s/Thomas K. Scallen
Thomas K. Scallen
Chief Executive Officer
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
1. Consolidated Balance Sheets F-1
2. Consolidated Statements of Operations F-2
3. Consolidated Statements of Cash Flows F-3
4. Notes to Consolidated Financial Statements F-4
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1995 and September 30, 1994
(Unaudited)
ASSETS June 30, September 30,
1995 1994
CURRENT ASSETS
Cash $ 40,814 $ 446,641
Accounts receivable 41,301 86,699
Inventories 51,049 46,044
Deferred show costs 153,548 150,549
Due from related parties 98,619 146,055
Prepaid expenses 178,547 167,061
Total current assets 563,878 1,043,049
PROPERTY AND EQUIPMENT, at cost
Building 1,000,000 1,000,000
Equipment 1,405,305 1,350,666
Furniture and fixtures 169,014 168,026
2,574,319 2,518,692
Less accumulated depreciation 1,200,320 951,626
1,373,999 1,567,066
INTANGIBLES
Cost in excess of net assets acquired, net of amortization 556,557 574,639
Preacquisition costs, net of amortization 22,500 11,925
579,057 586,564
$2,516,934 $3,196,679
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 15,093 $ 86,000
Current maturities of capitalized lease obligations 155,000 139,037
Contracts payable 16,372 73,764
Accounts payable 513,566 636,451
Deferred revenue 1,334,752 982,252
Accrued expenses 334,017 329,830
Total current liabilities 2,368,800 2,247,334
LONG-TERM CAPITALIZED LEASE OBLIGATIONS 604,596 722,924
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share; authorized
200,000,000 shares; issued 8,636,952 shares 8,637 8,637
Additional paid in capital 3,682,431 3,682,431
Accumulated deficit (4,147,530) (3,464,647)
(456,462) 226,421
$2,516,934 $3,196,679
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three-Month and Nine-Month Periods Ended June30, 1995 and 1994
(Unaudited)
Three-Month Periods Nine-Month Periods
1995 1994 1995 1994
Revenues
Admissions revenue $ 1,824,950 $ 1,490,783 $ 5,154,210 $ 5,016,467
Food, beverage and merchandise sales 950,296 781,353 3,023,300 2,457,298
Cost of Food, beverage and merchandise sales 294,718 244,377 905,884 767,610
Gross profit 655,578 536,976 2,117,416 1,689,688
Net revenues 2,480,528 2,027,759 7,271,626 6,706,155
Operating Costs and Expenses
Operating costs 2,424,511 1,954,457 6,586,615 6,266,384
General and administration 394,338 474,483 1,286,252 1,442,211
Total operating costs and expenses 2,818,849 2,428,940 7,872,867 7,708,595
Operating loss (338,321) (401,181) (601,241) (1,002,440)
Other, primarilly interest expense (27,012) (35,943) (81,306) (100,167)
Loss before income taxes and minority interest
in loss of subsidiary (365,333) (437,124) (682,547) (1,102,607)
Federal and State Income Taxes (2,244) 1,514 337 3,448
Loss before minority interest in loss of subsidiary (363,089) (438,638) (682,884) (1,106,055)
Minority Interest in Loss of Subsidiary -- (15,223) -- (48,043)
Net loss ($ 363,089) ($ 423,415) ($ 682,884) ($1,058,012)
Net loss per share of common stock ($ 0.04) ($ 0.05) ($ 0.08) ($ 0.12)
Weighted average number of common shares 8,636,952 8,636,952 8,636,952 8,636,952
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine-Month Periods Ended June 30, 1995 and 1994
(Unaudited)
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($ 682,884) ($1,058,012)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 256,201 230,738
Minority interest in loss of subsidiary -- (48,043)
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable 45,398 26,748
Inventories (5,005) (595)
Deferred show costs (2,999) 12,142
Prepaid expenses (11,486) (11,186)
Increase (Decrease) in-
Accounts payable and accrued expenses (176,089) 158,368
Deferred revenue 352,500 278,909
Income taxes payable -- 2,581
Net cash used in operating activities (224,364) (408,350)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for preacquisition costs -- (1,187)
Increase in due from related parties 47,436 (61,952)
Purchase of property and equipment (55,627) (67,149)
Net cash used in investing activities (8,191) (130,288)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock -- --
Increase (decrease) in notes payable (70,907) --
Decrease in due to related parties -- --
Reduction of long-term capitalized lease obligations (102,365) (92,111)
Net cash used in financing activities (173,272) (92,111)
Net decrease in cash (405,827) (630,749)
Cash, beginning of period 446,641 592,971
Cash (overdraft), end of period $ 40,814 ($ 37,778)
CENTURY PARK PICTURES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation:
The accompanying unaudited consolidated financial statements have been prepared
in accordance with the instructions to Form 10-Q and, therefore, do not include
all information and disclosures necessary for a fair presentation of results of
operations, financial position, and consolidated cash flows in conformity with
generally accepted accounting principles. However, such statements do reflect,
in the opinion of management of the Company, all adjustments, consisting of only
normal recurring accruals, necessary for a fair presentation of the results of
operations for these periods.
Note 2. Retroactive Change in Accounting
In July 1993, the Company acquired International Theatres Corporation (ITC), its
wholly owned subsidiary, and accounted for certain leases assumed as capital
leases. During 1994, it was determined that this method was not in accordance
with generally accepted accounting principles.
During the year ended September 30, 1994, the Company retroactively changed its
method of accounting for these leases. The leases were allocated between land
and buildings based on fair values. The portion of the lease allocated to
building was determined to be a capitalized lease obligation; however, the
portion allocated to land was determined to be an operating lease in accordance
with generally accepted accounting principles.
The financial statements for the quarter ended June 30, 1994, have been
retroactively restated for this change. This change had the following effects as
of and for the quarter ended June 30, 1994:
Increase
(Decrease)
Leasehold interest in land $(1,000,000)
Accumulated depreciation 95,612
Intangible assets (1,140,974)
Accrued expenses 6,396
Capitalized lease obligation (2,197,213)
Accumulated deficit 35,577
Net loss 10,192