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 December 31, 1996
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 December 31, 1996, 9,886,641 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 December 31, 1996 compared to Period Ended December 31, 1995.
Admissions revenues, all of which were generated by the Company's wholly owned
subsidiary International Theatres Corporation (ITC), were $1,111,945 for the
quarter ended December 31, 1996, compared to $1,057,505 for the comparable prior
year period. The approximate $54,400 increase in ITC's current period admissions
revenues was primarily attributable to increased ticket prices, offset in part
by decreased attendance and increased promotional and discounted tickets.
ITC's food, beverage and merchandise sales were $1,053,156 for the quarter ended
December 31, 1996, compared to $1,089,208 for the comparable prior year period,
and their related cost of sales were $302,199 and $312,556, respectively. The
approximate $36,000 decrease in current period sales was due primarily to
decreased attendance offset in part by increased prices. The cost of sales, as a
percent of food, beverage and merchandise sales, was comparable for both
periods.
ITC's operating expenses for the quarter ended December 31, 1996, were
$1,643,905, compared to $1,698,434 for the comparable prior year period,
representing an approximate decrease of $54,500. The decrease in the current
year was primarily due to decreased play mounting costs and cost containment
actions taken by management.
General and administrative expenses were $278,470 for the quarter ended December
31, 1996, compared to $320,677 for the comparable prior year period. The
approximate decrease of $42,200 in general and administrative expenses was
primarily due to reduced expenditures relative to potential acquisitions and to
cost containment actions taken by management.
LIQUIDITY AND SOURCES OF CAPITAL
Cash from (used in) operating activities for the quarter ended December 31,
1996, was $139,121 compared to $(7,482) for the comparable prior year period.
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 provided from (used in) investing
activities for the quarter ended December 31, 1996, was $(8,172), which was
primarily comprised of purchases of equipment of $10,090. Cash from (used in)
financing activities for the quarter ended December 31, 1996, was $(108,263),
which was comprised of reductions of notes payable and long-term capitalized
lease obligations.
At December 31, 1996, the Company had a working capital deficit of ($3,053,053)
and cash of $51,886. The working capital deficit at December 31, 1996, was
primarily comprised of notes payable of $400,000, accounts payable and accrued
expenses of $1,490,650, and deferred revenues of $1,404,263. Approximately
$400,000 of the accounts payable and accrued expenses relate to The Pike.
Management believes that a significant portion of these obligations would be
discharged upon liquidation as discussed below. The deferred revenues relate 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.
The Company had no material commitments for capital expenditures as of December
31, 1996 and capital expenditures for the remainder of fiscal 1997 are expected
to be immaterial.
Management believes that advance ticket sales and advance bookings are
indicative that ITC's anticipated results will provide sufficient funds to
sustain their operations for the remainder of fiscal 1997.
During the quarter ended March 31, 1996, the Company finalized the acquisition
of an arena football franchise under a lease with an option to purchase the
franchise. During fiscal year 1996 such franchise was operated through a wholly
owned subsidiary, Minnesota Arena Football, Inc. (The Pike).
During the third and fourth fiscal quarters of fiscal year 1996, The Pike failed
to generate the anticipated cash flow. Consequently, during such quarters the
Company's CEO advanced approximately $206,000 and the Company raised additional
financing from outside sources of approximately $400,000. The financing raised
from outside sources is currently payable, and is secured by the common stock of
Minnesota Arena Football, Inc.
Management anticipates such financing will be converted into the Company's
common stock. However, there are no assurances that such financing will be
converted into the Company's common stock. Throughout much of the third and
fourth fiscal quarters of fiscal 1996, management attempted to sell its interest
in the arena football franchise. Failing to do so, the option expired.
Accordingly, The Pike has ceased operations. Management is evaluating the
appropriate course of action for The Pike, which will most likely be liquidated
either in or out of bankruptcy court.
The Company's independent auditors issued their opinion on the consolidated
financial statements as of September 30, 1996, wherein they added an additional
paragraph which raised substantial doubt as to the Company's ability to continue
as a going concern. Management believes its current cash position will be
sufficient to satisfy working capital requirements for fiscal 1997, and to fund
costs relative to investigating potential acquisitions. ITC has a line of credit
providing for available funds of $50,000. Management believes ITC will operate
at a profitable level that, along with ITC's available line of credit, will
provide sufficient funds to satisfy ITC's working capital requirements for
fiscal 1997. However, there can be no assurances that anticipated cash flow from
ITC's operations will be achieved.
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.
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 December 11, 1997.
CENTURY PARK PICTURES CORPORATION
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
December 31, 1996 and September 30, 1996
(Unaudited)
ASSETS December 31, September 30,
1996 1996
----------- -----------
CURRENT ASSETS
Cash $ 51,886 $ 29,200
Accounts receivable 209,311 158,496
Inventories 59,557 49,206
Deferred show costs 38,146 4,025
Due from related parties -- 1,918
Prepaid expenses 131,975 74,721
----------- -----------
Total current assets 490,875 317,566
----------- -----------
PROPERTY AND EQUIPMENT, at cost
Leasehold interest in building 1,000,000 1,000,000
Equipment 505,671 495,581
Furniture and fixtures 447,670 447,670
----------- -----------
1,953,341 1,943,251
Less accumulated depreciation 1,067,690 993,680
----------- -----------
885,651 949,571
----------- -----------
INTANGIBLES
Cost in excess of net assets acquired, net of amortization 425,391 431,418
Investment in unconsolidated subsidiary 31,976 42,397
----------- -----------
457,367 473,815
----------- -----------
$ 1,833,893 $ 1,740,952
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Notes payable $ 400,000 $ 450,000
Current maturities of capitalized lease obligations 200,000 200,127
Excess of outstanding checks over bank balance -- --
Due to related parties 49,015 18,683
Accounts payable 884,943 931,141
Deferred revenue 1,404,263 1,090,501
Accrued compensation 136,250 236,100
Accrued expenses 469,457 340,753
----------- -----------
Total current liabilities 3,543,928 3,267,305
----------- -----------
LONG-TERM CAPITALIZED LEASE OBLIGATIONS 318,226 376,362
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.001 per share; authorized
200,000,000 shares; issued and outstanding 9,886,641 shares; 9,887 9,887
Additional paid in capital 4,573,905 4,573,905
Accumulated deficit (6,612,053) (6,486,507)
----------- -----------
(2,028,261) (1,902,715)
----------- -----------
$ 1,833,893 $ 1,740,952
=========== ===========
See Notes to Consolidated Financial Statements.
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three-Month Periods Ended December 31, 1996 and 1995
(Unaudited)
Three-Month Periods
1996 1995
----------- -----------
Revenues
Admissions revenue $ 1,111,945 $ 1,057,505
----------- -----------
Food, beverage and merchandise sales 1,053,156 1,089,208
Cost of Food, beverage and merchandise sales 302,199 312,556
----------- -----------
Gross profit 750,957 776,652
----------- -----------
Net revenues 1,862,902 1,834,157
----------- -----------
Operating Costs and Expenses
Operating costs 1,643,905 1,698,434
General and administration 278,470 320,677
----------- -----------
Total operating costs and expenses 1,922,375 2,019,111
----------- -----------
Operating loss (59,473) (184,954)
Other, primarily interest expense (55,151) (36,611)
----------- -----------
Loss before equity in income (loss) of WBPI
and income taxes (114,624) (221,565)
Equity in income (loss) of WBPI (10,421) 6,797
----------- -----------
Loss before minority interest in loss of subsidiary (125,045) (214,768)
Income taxes 501 501
----------- -----------
Net loss $ (125,546) $ (215,269)
=========== ===========
Net loss per share of common stock $ (0.01) $ (0.02)
=========== ===========
Weighted average number of common shares 9,886,641 8,769,842
=========== ===========
See Notes to Consolidated Financial Statements.
CENTURY PARK PICTURES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three-Month Periods Ended December 31, 1996 and 1995
(Unaudited)
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(125,546) $(215,269)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation and amortization 90,458 80,485
Equity in (income) loss of WBPI 10,421 (6,797)
Change in assets and liabilities:
(Increase) decrease in-
Accounts receivable (50,815) (21,397)
Inventories (10,351) (777)
Deferred show costs (34,121) (38,343)
Prepaid expenses (57,254) (61,645)
Increase (Decrease) in-
Accounts payable and accrued expenses 2,567 (154,615)
Deferred revenue 313,762 410,876
--------- ---------
Net cash from (used in) operating activities 139,121 (7,482)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for preacquisition costs -- (72,312)
Increase in due from related parties 1,918 52,504
Purchase of property and equipment (10,090) (6,509)
--------- ---------
Net cash from (used in) investing activities (8,172) (26,317)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from sale of common stock -- 305,649
Increase (decrease) in notes payable (50,000) --
Increase (decrease) in due to/from related parties -- (25,566)
Reduction of long-term capitalized lease obligations (58,263) (50,398)
--------- ---------
Net cash from (used in) financing activities (108,263) 229,685
--------- ---------
Net decrease in cash 22,686 195,886
Cash, beginning of period 29,200 32,078
--------- ---------
Cash (deficit), end of period $ 51,886 $ 227,964
========= =========
See Notes to Consolidated Financial Statements.
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.