U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-QSB
(Mark One)
_x_ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended June 30, 1995
___ Transition report under Section 13 or 15(d) of the Exchange Act
For the period from _____ to _____
Commission file number 0-2528
POCONO HOTELS CORPORATION
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 51-0099583
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Indentification No.)
1209 Orange Street, Wilmington, Delaware 19801
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(Address of Principal Executive Offices)
(302) 658 - 7581
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(Issuer's Telephone Number, Including Area Code)
None
----
(Former Name, Former Address and Former Fiscal Year,
if Changes Since Last Report)
Check whether the issuer:
(1) has filed all reports required to be filed by Section 13 or 15(d)
of the Exchange Act during the past 12 months (or 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 __
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classses of
common equity, as of the latest practicable date.
9,812 Shares of Common Stock
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POCONO HOTELS CORPORATION
INDEX
PAGE NO.
Consolidated Condensed Balance Sheets 2
June 30, 1995 & December 31, 1994
Consolidated Condensed Statements of Loss 3
Six Months Ended June 30, 1995 & 1994
Consolidated Statement of Cash Flows 4
Six Months Ended June 30, 1995 & 1994
Notes to the Consolidated Condensed Financial Statements 5
Management's Discussion and Analysis of the
Consolidated Condensed Statements of Loss 6
Final Exhibits and Reports 7
POCONO HOTELS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEET
UNAUDITED
JUNE 30,1995 DEC. 31, 1994
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CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 350,137 $ 862,297
ACCOUNTS RECEIVABLE - NET 432,193 351,180
INVENTORIES 192,412 148,232
PREPAID EXPENSES 131,697 103,009
DEFERRED INCOME TAX BENEFIT 51,808 51,808
----------- ------------
TOTAL CURRENT ASSETS 1,158,247 1,516,526
INVESTMENTS AT COST 42,851 42,851
PROPERTY, PLANT AND EQUIPMENT 14,529,280 14,299,210
LESS: ACCUMULATED DEPRECIATION 10,989,953 10,749,953
TOTAL PROPERTY, PLANT AND EQUIPMENT 3,539,327 3,549,257
CLUSTER HOMES AND LOTS HELD FOR SALE 506,263 365,307
TOTAL ASSETS $ 5,246,688 $5,473,941
============ ============
LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 197,101 $ 294,358
ACCRUED EXPENSES 265,748 234,567
TAXES PAYABLE AND ACCRUED 189,331 96,261
ADVANCE DEPOSITS 377,219 203,498
NOTES PAYABLE 200,000 0
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TOTAL CURRENT LIABILITIES 1,229,399 828,684
DEFERRED INCOME TAX LIABILITY 201,951 201,951
STOCKHOLDER'S EQUITY
CAPITAL STOCK:
PREFERRED STOCK - 7% CUMULATIVE - 942,300 942,300
$100 PAR VALUE; AUTHORIZED 12,000 SHARES
ISSUED AND OUTSTANDING - 9,423 SHARES
COMMON STOCK - NO PAR VALUE; 259,080 259,080
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AUTHORIZED 16,000 SHARES,
ISSUED 13,994 SHARES
TOTAL CAPITAL STOCK 1,201,380 1,201,380
RETAINED EARNINGS 2,670,655 3,298,623
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3,872,035 4,500,003
LESS: TREASURY STOCK AT COST
COMMON STOCK - 4,182 SHARES 56,697 56,697
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TOTAL STOCKHOLDER'S EQUITY 3,815,338 4,443,306
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $5,246,688 $5,473,941
============ ============
2
POCONO HOTELS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
UNAUDITED
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1995 1994 1995 1994
REVENUES
ROOMS $ 869,028 $ 939,377 $1,455,794 $1,505,117
FOOD & BEVERAGE 741,611 714,713 1,340,828 1,226,641
CLUSTER HOME SALES 5,000 324,335 8,234 346,335
GOLF & OTHER SPORTS 203,267 204,227 342,288 330,317
SUNDRY DEPARTMENTS 115,876 83,097 182,034 155,666
OTHER INCOME 44,900 70,553 161,758 135,218
------------ ------------ ------------ -----------
TOTAL REVENUES 1,979,682 2,336,302 3,490,936 3,699,294
OPERATING COSTS & EXPENSES
FOOD & BEVERAGE 670,088 624,191 1,204,768 1,101,664
HOTEL OPERATING 517,857 488,443 927,748 888,042
COST OF CLUSTER HOMES 2,212 235,297 4,015 252,628
ADMIN. & GENERAL 387,084 414,286 766,588 838,153
ADVERTISING & PROMOTION 164,347 174,432 302,412 279,570
HEAT, LIGHT, & POWER 70,286 84,136 168,078 192,233
REPAIRS & MAINTENANCE 167,424 142,387 384,724 320,213
& CARE OF GROUNDS
REAL ESTATE , CAPITAL 57,495 51,253 117,153 101,951
STOCK & OTHER TAXES,
& BUILDING INSURANCE
INTEREST EXPENSE 3,418 9,186 3,418 11,648
DEPRECIATION 120,000 122,975 240,000 245,950
------------ ------------ ------------ -----------
TOTAL EXPENSES 2,160,211 2,346,586 4,118,904 4,232,052
(LOSS) FROM OPERATIONS ( 180,529) ( 10,284) ( 627,968) ( 532,758)
LESS: PROVISION FOR
INCOME TAXES (Note 3) 0 14,643 0 28,143
NET INCOME (LOSS) (Note 2) ( 180,529) ( 24,927) ( 627,968) ( 560,901)
DIVIDENDS ON PREFERRED 16,490 16,490 32,980 32,980
STOCK
NET (LOSS) APPLICABLE TO ($ 197,019) ($ 41,417) ($ 660,948) ($ 593,881)
============= ============ ============ ============
COMMON STOCKHOLDER'S
NET (LOSS) PER COMMON
SHARE BASED ON 9,812
SHARES OUTSTANDING
AFTER RECOGNITION OF
STOCK DIVIDENDS ($20.08) ($ 4.22) ($67.36) ($60.53)
(Note 4) ====== ====== ====== ======
3
POCONO HOTELS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
PERIOD ENDED
6/30/95 6/30/94
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) ($627,968) ($560,901)
ADJUSTMENTS TO RECONCILE NET INCOME TO
CASH PROVIDED BY OPERATING ACTIVITIES
DEPRECIATION & AMORTIZATION 240,000 245,950
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE ( 81,013) ( 483,088)
DECREASE (INCREASE) IN INVENTORIES ( 44,180) ( 91,473)
DECREASE (INCREASE) IN PREPAID EXPENSES ( 28,688) ( 24,135)
DECREASE (INCREASE) IN CLUSTERED HOMES/LOTS ( 140,956) 55,736
INCREASE (DECREASE) IN ACCOUNTS PAYABLE ( 97,257) 3,308
INCREASE (DECREASE) IN ACCRUED EXPENSE 31,181 132,209
INCREASE (DECREASE) IN ACCRUED INCOME TAXES 0 27,000
INCREASE (DECREASE) IN OTHER ACCRUED TAXES 93,070 48,827
INCREASE (DECREASE) IN ADVANCE DEPOSITS 173,721 87,582
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TOTAL ADJUSTMENTS 145,878 1,916
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NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (482,090) (558,985)
CASH FLOWS FROM INVESTING ACTIVITIES
PURCHASES OF PROPERTY, PLANT & EQUIPMENT (230,070) (176,057)
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NET CASH (USED IN) INVESTING ACTIVITIES (230,070) (176,057)
CASH FLOWS FROM FINANCING ACTIVITIES
PROCEEDS FROM CONSTRUCTION LOAN 0 109,602
PAYMENTS TO CONSTRUCTION LOAN 0 (109,602)
PROCEEDS FROM BANK NOTES PAYABLE 400,000 850,000
PAYMENTS ON BANK NOTES PAYABLE (200,000) (50,000)
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NET CASH FROM FINANCING ACTIVITIES 200,000 800,000
NET INCREASE (DECREASE) IN CASH (512,160) 64,958
CASH & CASH EQUIVALENTS @ BEGINNING OF YEAR 862,297 183,427
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CASH & CASH EQUIVALENTS @ END OF YEAR $ 350,137 $ 248,385
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4
POCONO HOTELS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
UNAUDITED
1. In the opinion of the company, the accompanying unaudited Consolidated
Condensed Financial Statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the financial position as
of June 30, 1995 and 1994 and the results of operations for the three and six
months then ended and changes in financial position for the six months then
ended.
2. The results of operations for the three and six months ended June 30, 1995
and 1994 are not necessarily indicative of the results to be expected for the
full year.
3. Although the company reported a loss for the six month peiod ended June 30,
1995, no provision is made for a recovery of income taxes by carrying back the
loss for tax purposes. The Company expects to report a profit for the year
ending December 31, 1995.
4. At June 30, 1995 the Company's arrearage in cumulative preferred stock
dividends amounted to $233.00 per share and the total of all such shares
outstanding at that date amounted to $2,195,559.00.
5. The Company, through a subsidiary, has issued irrevocable letters of credit
in favor of Barrett Township, which obligates the Subsidiary to complete certain
grading, road paving and installation of utilities at the sites. The letters of
credit expire in November 1995 or when these improvements are completed and
inspected by the Township.
5
POCONO HOTELS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE
CONSOLIDATED CONDENSED STATEMENT OF INCOME
General
The Company derives substantially all of its revenues from the operation of a
resort in Skytop, Pennsylvania, and the development and sale of clustered homes.
Historically, the Company's revenues, and consequently, profits, have been
received primarily in May through October of each year. Operations in November
through April are usually at a loss. These seasonal fluctuations do not
materially affect the Company's or its subsidiaries' capital expenditures,
inventories, or terms on which business is conducted.
Results of Operations
Revenues for the second quarter of 1995 decreased by $356,630 or 15.3% as
compared to the second quarter of 1994. Of this difference $319,335 resulted
from the lack of any cluster home sales in the second quarter of 1995 as
compared to the sale of one cluster home unit in 1994. Lodge revenues were down
only $37,295 as compared to 1994 second quarter levels. This was the result of a
decrease in rooms occupancy for the Lodge of 170 room nights, a change in
occupancy percentage from 45.2% in the second quarter of 1994 to 44.1% in the
second quarter of 1995.
Operating costs and expenses decreased $186,375 for the second quarter of 1995
when compared with the same period a year ago. Once again however, the sale of a
cluster home unit in 1994, and its associated cost of sales, created the
variance. Cost of clustered homes decreased $233,085 in 1995, from $235,297 in
the second quarter of 1994 to $2,212 in the second quarter of 1995. Lodge
operating costs and expenses actually increased by $46,710 or 2.2%.
Changes in Financial Position
Liquidity and Capital Resources
The Company's business is not capital intensive; however, Skytop Development has
affected the cash flow situation. Because of the positive cash flow generated by
Skytop Developement through the end of 1994, use of the Company's lines of
credit is down some $600,000 compared to 1994. The balance owed on these credit
lines at June 30,1995 is $200,000 compared to some $800,000 owed at June 30,
1994.
The capital projects during the second quarter totalled $230,070 and consisted
of paving, remodeling of the front office and some meeting rooms, upgrades to
the guest rooms and hallways, new golf grounds equipment, and a new pickup
truck.
The Company has a lines of credit for the resort operation of $1,500,000 with an
outstanding balance of $200,000 at the end of June 1995.
Skytop Development Corporation has completed construction of twenty-eight of the
planned thirty-two units of the clustered homes. Of these all twenty-eight have
been sold. Construction of another two unit building began in May of 1995.
6
Item 9 Exhibits and Reports on Form 8-K
(a) Exhibits:
Computation of per share earnings
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1995 1994 1995 1994
Net Income (Loss) ($ 180,529) ( $ 24,927) ($ 627,968) ($ 560,901)
LESS:
Earnings applicable to cumulative
7% - $100 par value Preferred Stock
9,423 shares outstanding 16,490 16,490 32,980 32,980
Net Applicable to Common Stock ($ 197,019) ($ 41,417) ($ 660,948) ($ 593,881)
Common Stock
Number of shares issued 13,994 13,994 13,994 13,994
Less number of shares in treasury 4,182 4,182 4,182 4,182
Net Shares 9,812 9,812 9,812 9,812
Net (Loss) per Common Share ($ 20.08) ($ 4.22) ($ 67.36) ($ 60.53)
(b) Reports on Form 8-K
There were no reports on Form 8-K for the six months ended
June 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.
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Date Edward Mayotte, Vice President
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Date James T. Driggers, Treasurer
7