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 March 31, 1996
__ 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
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification 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
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(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 classes 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
March 31, 1996 & December 31, 1995 2
Consolidated Condensed Statements of Loss
Three Months Ended March 31, 1996 & 1995 3
Consolidated Statement of Cash Flows
Three Months Ended March 31, 1996 & 1995 4
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
MARCH 31, 1996 DEC. 31, 1995
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CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 199,053 $ 222,661
ACCOUNTS RECEIVABLE - NET 360,980 432,288
INVENTORIES 135,984 153,011
PREPAID EXPENSES 177,173 255,246
DEFERRED INCOME TAX BENEFIT 45,197
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TOTAL CURRENT ASSETS 918,387 1,063,206
INVESTMENTS AT COST 42,851 42,851
PROPERTY, PLANT AND EQUIPMENT 15,140,654 14,889,831
LESS: ACCUMULATED DEPRECIATION 11,433,323 11,354,675
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TOTAL PROPERTY, PLANT AND EQUIPMENT 3,707,331 3,535,156
CLUSTER HOMES AND LOTS HELD FOR SALE 830,922 830,064
TOTAL ASSETS 5,499,491 5,471,277
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LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 354,441 $ 330,952
ACCRUED EXPENSES 247,000 224,300
TAXES PAYABLE AND ACCRUED 238,457 146,798
ADVANCE DEPOSITS 460,480 272,765
NOTES PAYABLE 0 0
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TOTAL CURRENT LIABILITIES 1,300,378 974,815
DEFERRED INCOME TAX LIABILITY 124,332 134,313
STOCKHOLDER'S EQUITY
CAPITAL STOCK: 942,300 942,300
PREFERRED STOCK - 7% CUMULATIVE -
$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 2,930,098 3,217,466
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4,131,478 4,418,846
LESS: TREASURY STOCK AT COST
COMMON STOCK - 4,182 SHARES 56,697 56,697
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TOTAL STOCKHOLDER'S EQUITY 4,074,781 4,362,149
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY 5,499,491 5,471,277
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2
POCONO HOTELS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF INCOME
SIX MONTHS ENDED MARCH 31, 1996 AND 1995
UNAUDITED
THREE MONTHS ENDED
MARCH 31
1996 1995
REVENUES
ROOMS 763,7644 586,766
FOOD & BEVERAGE 835,818 599,217
CLUSTER HOME SALES 9,712 3,234
GOLF & OTHER SPORTS 137,786 139,021
SUNDRY DEPARTMENTS 108,858 66,158
OTHER INCOME 13,898 116,858
TOTAL REVENUES 1,858,837 1,511,254
OPERATING COSTS & EXPENSES
FOOD & BEVERAGE 570,869 534,680
HOTEL OPERATING 481,119 409,891
COST OF CLUSTER HOMES 4,162 1,803
ADMIN. & GENERAL 421,118 379,504
ADVERTISING & PROMOTION 203,427 138,065
HEAT, LIGHT & POWER 112,571 97,792
REPAIRS & MAINTENANCE & GROUNDS CARE 178,078 217,300
REAL ESTATE, CAPITAL 75,780 59,658
STOCK & OTHER TAXES & BUILDING INSURANCE
INTEREST EXPENSE
DEPRECIATION 120,000 120,000
TOTAL EXPENSES 2,167,126 1,958,693
(LOSS) FROM OPERATIONS (308,289) (477,439)
LESS: PROVISION FOR INCOME TAXES (Note 3)
NET INCOME (LOSS) (Note 2) (308,289) (447,439)
DIVIDENDS ON PREFERRED STOCK 16,490 16,490
NET (LOSS) APPLICABLE TO COMMON STOCKHOLDERS (324,779) (463,929)
NET (LOSS) PER COMMON SHARE BASED ON 9,812 SHARES (33.10) (47.28)
OUTSTANDING AFTER RECOGNITION OF STOCK DIVIDENDS
(Note 4)
3
POCONO HOTELS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
PERIOD ENDED
3/31/96 3/31/95
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME (LOSS) (308,289) (447,439)
ADJUSTMENTS TO RECONCILE NET INCOME TO
CASH PROVIDED BY OPERATING ACTIVITIES
DEPRECIATION & AMORTIZATION 120,000 120,000
DECREASE (INCREASE) IN ACCOUNTS RECEIVABLE 71,308 149,999
DECREASE (INCREASE) IN INVENTORIES 17,207 (14,087)
DECREASE (INCREASE) IN PREPAID EXPENSES 78,073 28,023
DECREASE (INCREASE) IN CLUSTERED HOMES/LOTS
INCREASE (DECREASE) IN ACCOUNTS PAYABLE (858) (1,086)
INCREASE (DECREASE) IN ACCRUED EXPENSE 46,189 (5,971)
INCREASE (DECREASE) IN ACCRUED INCOME TAXES (35,216)
INCREASE (DECREASE) IN OTHER ACCRUED TAXES 91,659 42,218
INCREASE (DECREASE) IN ADVANCE DEPOSITS 187,715 143,202
TOTAL ADJUSTMENTS 575,896 324,418
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 267,608 (123,021)
CASH FLOWS FROM INVESTING ACTIVITIES
INCREASE IN INVESTMENTS (400,000)
PURCHASES OF PROPERTY, PLANT & EQUIPMENT (291,215) (98,308)
NET CASH (USED IN) INVESTING ACTIVITIES (291,215) (498,308)
CASH FLOWS FROM FINANCING ACTIVITIES
PROCEEDS FROM CONSTRUCTION LOAN
PAYMENTS TO CONSTRUCTION LOAN
PROCEEDS FROM BANK NOTES PAYABLE
PAYMENTS ON BANK NOTES PAYABLE
NET CASH FROM FINANCING ACTIVITIES
NET INCREASE (DECREASE) IN CASH (23,607) (621,329)
CASH & CASH EQUIVALENTS @ BEGINNING OF YEAR 221,661 862,297
CASH & CASH EQUIVALENTS @ END OF YEAR 199,054 240,968
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 March 31, 1996 and 1995 and the results of operations for the three and six
months then ended and changes in financial position for the three months then
ended.
2. The results of operations for the three months ended March 31, 1996 and 1995
are not necessarily indicative of the results to be expected for the full year.
3. At March 31, 1996 the Company's arrearage in cumulative preferred stock
dividends amounted to $223.50 per share and the total of all such shares
outstanding at the date amounted to $2,106,041.
4. 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 1996 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 first quarter of 1996 increased by $347,583 or 23% as compared
to the first quarter of 1995. Lodge revenues were up $340,810 as compared to
1995 first quarter levels. This was the result of an increase in rooms occupancy
for the Lodge of 803 room nights, a change in occupancy percentage from 33.2% in
the first quarter of 1995 to 38.1% in the first quarter of 1996.
Operating costs and expenses increased $194,476 for the first quarter of 1996
when compared with the same period a year ago. This increase is attributable to
the increased volume of business.
Changes in Financial Position
Liquidity and Capital Resources
The capital projects during the third quarter totaled $291,215.
The Company has a line of credit for the resort operation of $1,500,000 with an
outstanding balance of $0 at the end of March 1996.
Skytop Development Corporation has completed construction of thirty of the
planned thirty-two units of the clustered homes. Of these, twenty-eight have
been sold; two units are presently available for sale.
6
Item 9 Exhibits and Reports on Form 8-K
(a) Exhibits:
Computation of per share earnings
THREE MONTHS ENDED
MARCH 31
1996 1995
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Net Income (Loss) ($308,289) ($447,439)
LESS:
Earnings applicable to cumulative
7% - $100 par value Preferred Stock
9,423 shares outstanding 16,490 16,490
Net Applicable to Common Stock ($324,779) ($463,929)
Common Stock
Number of shares issued 13,994 13,994
Less number of shares in treasury 4,182 4,182
Net Shares 9,812 9,812
Net (Loss) per Common Share ($ 33.10) ($ 47.28)
(b) Reports on Form 8-K
There were no reports on Form 8-K for the three months ended
March 31, 1996.
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 Charles F. Hewson, Asst. Treasurer
7