SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for Quarterly Period Ended September 30, 1995
-OR-
Transaction Report Pursuant to Section 13 or 15(d)
of the Securities And Exchange Act of 1934
for the transaction period from _________ to________
________________________________________________________________________
Commission File Number 0-9789
________________________________________________________________________
Premier Parks Inc.
________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 73-6137714
________________________________________________________________________
(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11501 Northeast Expressway, Oklahoma City, OK 73131
________________________________________________________________________
(Address of principal executive offices, Zip Code)
(405) 478-2414
________________________________________________________________________
(Registrant's telephone number, including area code)
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 such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No _
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:
At September 30, 1995, Premier Parks Inc. had outstanding 24,287,772 shares
of common stock, par value $.01 per share.
ITEM 1. FINANCIAL STATEMENTS
PREMIER PARKS INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
September 30, December 31,
1995 1994
(Unaudited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $ 41,578 $ 1,366
Accounts receivable 5,042 870
Inventories 2,862 1,018
Prepaid expenses 1,078 765
Total current assets 50,560 4,019
Other assets
Investment in and advances to
a partnership, at equity:
229 East 79th Street Associates LP 1,116 1,124
Deferred charges 4,460 428
Deposits and other 3,757 1,396
Total other assets 9,333 2,948
Property and equipment, at cost 123,199 44,842
Less accumulated depreciation 8,475 6,270
Total property and equipment 114,724 38,572
Intangible assets 11,036 0
Total assets $ 185,653 $ 45,539
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 11,875 $ 1,281
Accrued interest payable 1,416 102
Current portion of long-term debt:
unrelated parties 56 1,239
Current portion of long-term debt:
related parties 0 200
Current portion of capitalized lease
obligations 955 453
Total current liabilities 14,302 3,275
Long-term debt and capitalized lease
obligations
Capitalized lease obligation 3,117 1,420
Long-term debt - unrelated parties:
Senior subordinated notes 0 1,240
Senior term notes 90,000 11,901
Long-term debt - related parties:
Senior subordinated notes 0 5,760
Junior subordinated loan 0 1,895
Total long-term debt and capitalized
lease obligations 93,117 22,216
Other long-term liabilities 4,958 0
Deferred income taxes 22,363 1,914
Total liabilities 134,740 27,405
Stockholders' equity
Preferred stock 20,000 0
Common stock 243 170
Capital in excess of par 59,463 50,573
Accumulated deficit (28,104) (31,920)
51,602 18,823
Less treasury stock at cost 689 689
Total stockholders' equity 50,913 18,134
Total liabilities and
stockholders' equity $ 185,653 $ 45,539
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS)
1995 1994
Revenue:
Theme park admissions $ 20,263 $ 12,980
Theme park food, merchandise, and other 18,508 10,200
Total revenue 38,771 23,180
Costs and expenses:
Operating expenses 15,640 10,745
Selling, general and administrative 6,833 4,501
Costs of products sold 4,333 2,354
Depreciation and amortization 2,258 1,506
Total cost and expenses 29,064 19,106
Income from operations 9,707 4,074
Other income (expense)
Interest expense, net (3,101) (1,683)
Equity in loss of partnership (56) (51)
Other income (expense) (31) 0
Total other income (expense) (3,188) (1,734)
Income before income taxes and extraordinary loss 6,519 2,340
Provision for income tax expense: 2,563 936
Net income before extraordinary loss 3,956 1,404
Extraordinary loss - early extinguishment of debt (140) 0
NET INCOME $ 3,816 $ 1,404
Per share amounts
NET INCOME PER SHARE - PRIMARY 0.21 0.20
NET INCOME PER SHARE - FULLY DILUTED 0.16 0.19
AVERAGE SHARES OUTSTANDING - PRIMARY 18,112,071 13,276,097
AVERAGE SHARES OUTSTANDING - FULLY DILUTED 26,330,173 14,588,918
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS)
1995 1994
Revenue:
Theme park admissions $ 14,587 $ 8,983
Theme park food, merchandise, and other 14,816 6,888
Total revenue 29,403 15,871
Costs and expenses:
Operating expenses 9,757 4,797
Selling, general and administrative 3,593 2,058
Costs of products sold 3,506 1,554
Depreciation and amortization 1,147 647
Total cost and expenses 18,003 9,056
Income from operations 11,400 6,815
Other income (expense)
Interest expense, net (1,718) (602)
Equity in loss of partnership (17) (14)
Other income (expense) (31) (0)
Total other income (expense) (1,766) (616)
Income before income taxes and extraordinary loss 9,634 6,199
Provision for income tax expense: 3,806 2,480
Net income before extraordinary loss 5,828 3,719
Extraordinary loss - early extinguishment of debt (140) 0
NET INCOME $ 5,688 $ 3,719
Per share amounts
NET INCOME PER SHARE - PRIMARY 0.28 0.28
NET INCOME PER SHARE - FULLY DILUTED 0.19 0.21
AVERAGE SHARES OUTSTANDING - PRIMARY 20,574,190 13,276,097
AVERAGE SHARES OUTSTANDING - FULLY DILUTED 30,348,376 18,876,097
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
PREMIER PARKS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(IN THOUSANDS)
1995 1994
Cash flow from operating activities
Net income $ 3,816 $ 1,403
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 2,258 1,431
Extraordinary loss on early extinguishment of debt 140 0
Amortization of issuance costs of debt 136 73
Equity in loss of partnership 56 51
Gain on sale of assets 0 (9)
Increase (decrease) in notes and accounts 1,717 (2,222)
receivable and accrued interest
Increase in deferred income taxes 2,561 936
(Decrease) increase in inventories and prepaid expenses 861 (750)
Decrease in deposits and other 1,185 161
Increase (decrease) in accounts payable and accrued (250) 1,604
Increase in accrued interest payable 1,314 77
Total adjustments 9,978 1,352
Net cash provided by operating activities 13,794 2,755
Cash flow from investing activities
Proceeds from the sale of equipment 0 14
Additions to property and equipment (6,501) (10,455)
Acquisition of Funtime, Inc., net of cash acquired (58,617) 0
Investments in and advances to partnerships (49) (65)
Net cash (used in) investing activities (65,167) (10,506)
Cash flow from financing activities
Repayment of long-term debt and revolving
credit facility (17,060) (2,157)
Proceeds from borrowings 93,176 9,035
Proceeds from issuance of preferred stock 20,000 0
Payment of issuance costs (4,531) (74)
Net cash provided by financing activities 91,585 6,804
Increase (decrease) in cash and cash equivalent 40,212 (947)
Cash and cash equivalents at beginning of period 1,366 3,026
Cash and cash equivalents at end of period $ 41,578 $ 2,079
PART I - FINANCIAL INFORMATION (Continued)
Item 1 Financial Statements (Continued)
________________________________________
PREMIER PARKS INC.
NOTES TO FINANCIAL STATEMENTS
September 30, 1995
1. Management's Discussion and Analysis of Financial Condition and Results of
Operations which follows these notes contains additional information on the
results of operations and the financial position of the Company. Those
comments should be read in conjunction with these notes. The Company's
annual report on Form 10-K for the year ended December 31, 1994 includes
additional information about the Company, its operations and its financial
position, and should be read in conjunction with this quarterly report on
Form 10-Q.
2. The information furnished in this report reflects all adjustments which are,
in the opinion of management, necessary to present a fair statement of the
results for the periods presented.
3. Results of operations for the nine month and three month periods ended
September 30, 1995 are not indicative of the results expected for the full
year. In particular, the Company's theme park operations contribute most of
their annual revenue during the period from Memorial Day to Labor Day each
year.
4. Pursuant to a merger agreement, the Company acquired Funtime Parks, Inc., a
company owning three regional theme parks, for approximately $60 million,
subject to certain post-closing adjustments related to the 1995 operations of
the acquired theme parks. To fund the acquisition, on August 15, 1995, the
Company issued $90,000,000 aggregate principal amount of 12% senior notes due
2003, ("Notes") and $20,000,000 of convertible preferred stock and converted
approximately $9 million of previously existing indebtedness into Company
common stock. Except in the case of a Change of Control (as defined in the
indenture relating to the Notes) and certain other circumstances, no
principal payment on the Notes is due and payable prior to maturity
(August 15, 2003). The acquisition is being accounted for as a purchase. The
allocation of the purchase price has been determined based upon estimates of
fair value as determined by independent appraisal. The allocation in the
foregoing statements of operations reflect the results of the acquired
business only from the date of acquisition (August 15, 1995). The
acquisition includes an obligation by the Company based upon the 1995 results
of the acquired theme parks after the acquisition. Any additional payment
made by the Company under the contingent pricing feature will result in
additional purchase price.
The following summarized pro forma results of operations for the nine months
ended September 30, 1995 assumes that the acquisition and related
transactions occurred as of the beginning of the period. No pro forma
interest income from the approximate $30 million of net proceeds after the
offerings and acquisition described above has been reflected in the interest
expense, net.
Nine Months
Ended
September 30, 1995
Revenues:
Theme park admissions $ 36,138
Theme park food, merchandise, and other 41,176
Total other revenue 77,314
Expenses:
Operating expenses 31,481
Selling, general and administrative 11,700
Cost of products sold 9,369
Depreciation and amortization 4,677
Total operating expenses 57,277
Income from operations 20,087
Interest expense, net ( 8,638)
Equity in loss of partnership ( 56)
Other income (expense) ( 31)
Total other income ( 8,725)
Earnings (loss) before income taxes and
extraordinary loss 11,362
Income taxes 4,559
Earnings (loss) before extraordinary loss 6,803
Extraordinary loss - early extinguishment
of debt, net of tax ( 140)
Net income $ 6,663
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
_________________________________________________________
RESULTS OF OPERATIONS
Nine months ended September 30, 1995 vs. nine months ended September 30, 1994
Net income before income taxes. Net income before income taxes for the
nine months ended September 30, 1995 aggregated $6.5 million, as compared to net
income before taxes of $2.3 million for the comparable nine month period of
1994. The majority of the increase is a result of the acquisition that occurred
on August 15, 1995. Had the transaction not occurred, the 1995 results of the
Company would have been $2.7 million. The increase in the net income (on a non-
acquisition basis) in the 1995 period was attributable to the increased
attendance of 12.7% from 1.3 million in the first nine months of 1994 to 1.5
million in the first nine months of 1995 at the three theme parks owned by the
Company prior to the acquisition.
Revenue. Revenues increased from $23.2 million in the first nine months of
1994 to $38.8 million in the first nine months of 1995. A large portion of the
increase ($12.9 million) is a result of the acquisition that occurred on August
15, 1995. The 1995 results of the Company without consideration of the
acquisition provided an increase of 11.36% from $23.2 million in the first nine
months of 1994 to $25.9 million in the first nine months of 1995. This increase
in revenues is primarily attributable to the increased attendance described
above.
Operating income before depreciation. Operating income before depreciation
increased from $5.6 million in the first nine months of 1994 to $12 million in
the first nine months of 1995. A large portion of the increase ($5.4 million)
is a result of the acquisition that occurred on August 15, 1995. These results
include the income from the acquired parks from and after August 15, 1995. Had
the transaction occurred on January 1, 1995, operating income before
depreciation would have been $24.7 million for the nine months ended September
30, 1995. The 1995 results of the Company without consideration of the
acquisition provided a 17.6% increase from $5.6 million in the first nine months
of 1994 to $6.6 million in the first nine months of 1995. This increase is
primarily attributable to the increased attendance.
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
_________________________________________________________
Operating Expenses. Operating expenses increased from $10.7 million in the
first nine months of 1994 to $15.6 million in the first nine months of 1995. A
large portion of the increase ($4.3 million) is a result of the acquisition that
occurred on August 15, 1995. The 1995 results of the Company without
consideration of the acquisition provided an increase of 5.87% from $10.7
million in the first nine months of 1994 to $11.4 million in the first nine
months of 1995. The increase in expenses during the 1995 period is primarily
attributable to a 15% increase in repairs and maintenance cost due to the
additional rides and attractions put into service in 1995; a 16% increase in
utility expenses due to the increase in the number of rides, attractions and
revenue locations added in 1995; and a 22% increase in rent expenses due to
leasing rides for the 1995 season. As further discussed under "Liquidity,
Capital Commitments and Resources," the Company has purchased certain of these
leased rides through capital leases which will reduce the rent expense in
subsequent periods.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased from $4.5 million in the first nine months of
1994 to $6.8 million in the comparable period of 1995. A large portion of the
increase ($1.6 million) is a result of the acquisition that occurred on August
15, 1995. The Company's selling, general and administrative expenses without
consideration of the acquisition increased 17.3% from $4.5 million in the first
nine months of 1994 to $5.3 million in the comparable period of 1995 primarily
due to a 19.8% increase in marketing and advertising expenses. Most of this
increase was incurred at Adventure World as part of the advertising campaign
designed to promote public awareness of the new Mind Eraser roller coaster, and
a lesser portion of this increase was incurred in connection with the promotion
of the new combined season pass program at Frontier City and White Water Bay.
Costs of Products Sold. Costs of products sold increased from $2.3 million
in the first nine months of 1994 to $4.3 million in the first nine months of
1995. A large portion of the increase ($1.7 million) is a result of the
acquisition that occurred on August 15, 1995. The Company's cost of products
sold without consideration of the acquisition increased 10.3% from $2.3 million
in the first nine months of 1994 to $2.6 million in the first nine months of
1995. This increase is a direct result of increased in-park sales at the parks.
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
_________________________________________________________
Three months ended September 30, 1995 vs. three months ended September 30, 1994
Net income before income taxes. Net income before income taxes for the
three months ended September 30, 1995 aggregated $9.6 million, as compared to
net income before income taxes of $6.2 million for the comparable three month
period of 1994. The increase is a result of the acquisition that occurred on
August 15, 1995. The 1995 results of the Company without consideration of the
acquisition would have been $5.9 million. The decrease in the net income in the
1995 period was attributable to a $460,000 decrease in season pass revenues
recognized during the third quarter.
Revenue. Revenues increased from $15.9 million in the three months ended
September 30, 1994 to $29.4 million in the three months ended September 30,
1995. A large portion of the increase ($12.9 million) is a result of the
acquisition that occurred on August 15, 1995. The 1995 results of the Company
without consideration of the acquisition provided an increase of 3.6% from $15.9
million in the three months ended September 30, 1994 to $16.5 million in the
three months ended September 30, 1995. This increase in revenues is primarily
attributable to a 15% increase in attendance from 883,000 for the three month
period ended September 30, 1994 compared to 1,015,034 for the three month period
ended September 30, 1995 at the three theme parks owned by the Company prior to
the acquisition.
Operating income before depreciation. Operating income before depreciation
increased from $7.5 million in the three month period ended September 30, 1994
to $12.6 million in the three month period ended September 30 ,1995. The
majority of this increase is a result of the acquisition that occurred on August
15, 1995.
Operating Expenses. Operating expenses increased from $4.8 million in the
three months ended September 30, 1994 to $9.7 million in the three months ended
September 30, 1995. A large portion of this increase ($4.3 million) is a result
of the acquisition that occurred on August 15, 1995. The Company's expenses
without consideration of the acquisition increased 14.5% from $4.8 million in
the three months ended September 30, 1994 to $5.5 million in the three months
ended September 30, 1995. This increase during the 1995 period is primarily
attributable to a 13.2% increase in wages due to more rides, attractions, and
revenue locations over the same period in 1994; a 44.3% increase in contract
shows expenses; a 24.7% increase in repairs & maintenance due to more rides and
attractions to maintain; and a 19.6% increase in utility cost due to the
additional rides, attractions and revenues locations added for the 1995 season.
PART I - FINANCIAL INFORMATION (Continued)
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations
_________________________________________________________
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased from $2.1 million in the three month period
ended September 30, 1994 to $3.6 million in the three month period ended
September 30, 1995. Virtually all of the increase is a result of the acquisi-
tion that occurred on August 15, 1995.
Costs of Products sold. Costs of products sold increased from $1.6 million
in the three months ended September 30, 1994 to $3.5 million in the three months
ended September 30, 1995. A large portion of the increase is a result of the
acquisition that occurred on August 15, 1995. The Company's expenses without
consideration of the acquisition increased 13.8% from $1.6 million in the three
months ended September 30, 1994 to $2.0 million in the three months ended
September 30, 1995. This increase is a direct result of increased in-park sales
at the parks.
Because of the seasonal nature of the Company's theme park operations most
of the Company's revenues are generated from Memorial Day to Labor Day.
LIQUIDITY, CAPITAL COMMITMENTS AND RESOURCES
At September 30, 1995, the Company's indebtedness (including capitalized
leases) aggregated $94.1 million, of which approximately $1.0 million is due
prior to September 30, 1996.
On August 15, 1995, the Company acquired Funtime Parks, Inc. for
approximately $60.0 million and repaid $16.1 million of Company's then existing
long term debt. The Company funded these amounts from a portion of its $90
million Note offering and its $20 million, 7% Convertible Preferred Stock
offering. In addition, on that date, certain long term debt in the principal
amount of $9.1 million was converted into common stock of the Company. After
giving effect to these transactions, substantially all of the Company's
indebtedness at that date was represented by the $90 million notes, which
require annual interest payments of $10.8 million. Except in the event of a
Change of Control of the Company, no principal payment on the Notes is due and
payable until maturity, August 15, 2003. The annual dividend requirements on
the Convertible Preferred Stock is $1.4 million, payable at the election of the
Company in cash or additional shares of such stock. Also, on August 15, 1995,
the Company entered into a three-year $20 million revolving Senior Credit
Facility. The Senior Credit Facility bears interest on a variable rate based
upon the bank's Alternative Base Rate plus .025%, or LIBOR plus 3.00%, and is
secured by substantially all of the Company's non-real estate assets including
the stock of its subsidiaries. The Senior Credit Facility prohibits payment of
cash dividends by the Company.
The transactions described above generated approximately $29.8 million of
excess net proceeds. The Company expects to use approximately $21.5 million of
this amount on capital expenditures prior to the 1996 season, primarily at
Adventure World and the former Funtime parks.
The Company expects that the approximate $8.3 million in remaining excess
net proceeds from the Transactions, internally generated funds and borrowings
under its Senior Credit Facility will be the Company's primary sources of
liquidity. Pursuant to the terms of the Acquisition Agreement, all except
approximately $2.0 million of the net cash provided by the operations of
Funtime's parks from the closing date of the Acquisition (August 15, 1995)
through September 30, 1995 will be payable to the Selling shareholders of
Funtime Parks, Inc.. The Company believes that the funds available from its
sources of liquidity will be adequate to cover its currently anticipated working
capital and debt service requirements. Subsequent to August 15, 1995, the
Company entered into certain capital lease agreements and purchased $3.0 million
of rides and equipment which had previously been leased under operating leases.
The Company's liquidity could be adversely affected by any event or
condition, such as inclement weather that significantly reduces attendance at
any of its parks.
PART II - OTHER INFORMATION
Items 1-5
Not applicable
Item 6
A Form 8-k related to the acquisition of Funtime Parks, Inc., was filed on
August 30, 1995.
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.
Premier Parks Inc.
(Registrant)
KIERAN E. BURKE
Kieran E. Burke
Chairman/
Chief Executive Officer
November 10,1995
____________ RICHARD R. WEBB
Date Richard R. Webb
Vice President/Accounting