UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
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(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ------ ACT OF 1934
For the quarterly period ended March 31, 1997
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
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Commission File Number: 0-27006
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MILLION DOLLAR SALOON, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 13-3428657
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(State of incorporation) (IRS Employer ID Number)
6848 Greenville Avenue, Dallas, TX 75231
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(Address of principal executive offices)
(214) 691-6757
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: May 6, 1997: 5,010,084
Transitional Small Business Disclosure Format (check one): YES NO X
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MILLION DOLLAR SALOON, INC.
Form 10-QSB for the Quarter ended March 31, 1997
Table of Contents
Page
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 10
Part II - Other Information
Item 1 Legal Proceedings 11
Item 2 Changes in Securities 11
Item 3 Defaults Upon Senior Securities 11
Item 4 Submission of Matters to a Vote of Security Holders 11
Item 5 Other Information 11
Item 6 Exhibits and Reports on Form 8-K 11
2
Part 1 - Item 1
Financial Statements
MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and December 31, 1996
ASSETS
(Unaudited) (Audited)
March 31, December 31,
1997 1996
------------ ------------
CURRENT ASSETS
Cash on hand and in bank $ 361,514 $ 267,856
Note receivable - current portion 21,011 21,011
Inventory 11,725 11,169
Prepaid expenses 61,235 37,718
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Total current assets 455,485 337,754
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PROPERTY AND EQUIPMENT
Buildings and related improvements 1,955,132 1,969,411
Furniture and equipment 756,461 762,095
Vehicles 52,728 52,728
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2,764,321 2,784,234
Less accumulated depreciation (1,409,274) (1,381,016)
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1,355,047 1,403,218
Land 741,487 816,487
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Net property and equipment 2,096,534 2,219,705
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OTHER ASSETS
Note receivable - noncurrent portion 122,833 126,219
Accounts receivable from officers,
shareholders and affiliates 775,259 764,576
Organization costs, net of accumulated
amortization of $24,170 and $19,673
respectively 50,758 55,255
Loan costs, net of accumulated amortization
of $9,482 and $7,902, respectively 22,125 23,705
Deferred tax asset 61,500 61,500
Other 23,475 23,475
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Total other assets 1,055,950 1,054,730
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TOTAL ASSETS $3,607,969 $3,612,189
========= =========
- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - CONTINUED
March 31, 1997 and December 31, 1996
LIABILITIES AND SHAREHOLDERS' EQUITY
(Unaudited) (Audited)
March 31, December 31,
1997 1996
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CURRENT LIABILITIES
Current portion of long-term debt $ 122,370 $ 158,960
Accounts payable - trade 19,866 15,948
Accrued liabilities 26,104 58,666
Accrued income taxes payable 54,000 -
Dividends payable 200,403 150,303
Tenant deposits 8,775 6,500
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Total current liabilities 431,518 390,377
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LONG-TERM LIABILITIES
Long-term debt, net of current maturities 488,956 512,423
Deferred tax liability 94,569 94,569
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Total liabilities 1,015,043 997,369
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock - $0.001 par value. 5,000,000 shares
authorized. None issued and outstanding - -
Common stock - $0.001 par value. 50,000,000 shares
authorized. 5,010,084 issued and outstanding, respectively. 5,010 5,010
Additional paid-in capital 9,990 9,990
Retained earnings 2,621,714 2,599,820
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Total shareholders' equity 2,614,820 2,614,820
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,607,969 $3,612,189
========= =========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
4
MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three months ended March 31, 1997 and 1996
(Unaudited) (Unaudited)
Three months Three months
ended ended
March 31, March 31,
1997 1996
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REVENUES
Bar and restaurant sales $841,070 $876,278
Rental income 110,805 104,205
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Total revenues 951,875 980,483
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COST OF SALES - BAR AND
RESTAURANT OPERATIONS 473,558 496,242
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GROSS PROFIT 478,317 484,241
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OPERATING EXPENSES
General and administrative expenses 257,130 233,206
Interest expense 17,291 18,639
Depreciation and amortization 29,452 27,085
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Total operating expenses 303,873 278,930
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INCOME FROM OPERATIONS 174,444 205,311
OTHER INCOME (EXPENSES)
Interest and other miscellaneous 9,566 3,259
Gain on sale of fixed assets 48,499 -
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INCOME BEFORE INCOME TAXES 232,509 208,570
INCOME TAX (EXPENSE) BENEFIT
Currently payable (54,000) -
Deferred - (70,900)
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NET INCOME $ 178,509 $ 137,670
========= =========
Earnings per share of common stock outstanding $ 0.04 $ 0.03
========= =========
Weighted-average number of shares outstanding 5,010,084 5,010,084
========= =========
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 1997 and 1996
(Unaudited) (Unaudited)
Three months Three months
ended ended
March 31, March 31,
1997 1996
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $178,509 $137,670
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 29,452 27,085
Gain on sale of fixed assets (48,499) -
Common stock issued for consulting fees - 10,000
Interest income from shareholders capitalized as principal (10,683) -
(Increase) decrease in
Accounts receivable - trade - 13,191
Federal income taxes receivable - 2,500
Inventory (556) 398
Prepaid expenses (23,517) -
Deferred tax asset - 70,900
Increase (decrease) in
Accounts payable and other accrued liabilities (26,369) (59,410)
Income taxes payable 54,000 -
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Net cash provided by operating activities 152,337 202,334
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CASH FLOWS FROM INVESTING ACTIVITIES
Principal collections on note receivable 3,386 4,748
Net proceeds from sale of fixed assets 149,374 -
Purchases of property and equipment (1,081) (1,452)
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Net cash used in investing activities 151,679 3,296
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CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long-term debt (60,057) (32,413)
Funds advanced to shareholders and affiliates - net - (17,583)
Dividends paid (150,301) -
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Net cash used in financing activities (210,358) (49,996)
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INCREASE IN CASH AND CASH EQUIVALENTS 93,658 155,634
Cash and cash equivalents at beginning of period 267,856 133,374
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Cash and cash equivalents at end of period $361,514 $289,008
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- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
6
MILLION DOLLAR SALOON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Three months ended March 31, 1997 and 1996
(Unaudited) (Unaudited)
Three months Three months
ended ended
March 31, March 31,
1997 1996
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SUPPLEMENTAL DISCLOSURES OF
INTEREST AND INCOME TAXES PAID
Interest paid during the period $17,291 $ 3,259
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Income taxes paid (refunded) $ - $ (2,500)
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SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Declaration of first quarter dividend at
$0.04 and $0.03 per share, respectively $200,401 $150,303
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The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
7
MILLION DOLLAR SALOON, INC.
Notes to Financial Statements
Note 1 - Basis of Presentation
Million Dollar Saloon, Inc. (Company) was incorporated under the laws of the
State of Nevada on September 28, 1987. These financial statements reflect the
books and records of Million Dollar Saloon, Inc. (Nevada), Million Dollar
Saloon, Inc. (Texas), Furrh, Inc., Tempo Tamers, Inc., Corporation Lex and Don,
Inc. for the periods ended March 31, 1997 and 1996, respectively. All
significant intercompany transactions have been eliminated in combination. The
consolidated entities are referred to as Company.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the Securities and Exchange Commission. The
December 31, 1996 balance sheet data was derived from audited financial
statements of the Company, but does not include all disclosures required by
generally accepted accounting principles. Users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 on Form 10-KSB when reviewing the interim
financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 1997.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Summary of Significant Accounting Policies
a) Accounting principles adopted during the current period
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During the first quarter of 1997, effective at the beginning of the quarter,
the Company adopted Financial Accounting Standard No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". In accordance with the Standard, the Company adopted the policy of
evaluating all qualifying assets as of the end of each reporting quarter. No
adjustments for impairment were charged to operations during the first
quarter of 1997.
8
MILLION DOLLAR SALOON, INC.
Notes to Financial Statements - Continued
Note 3 - Property and equipment
During the first quarter of 1997, the Company sold a rental property for
gross cash proceeds of approximately $149,474, net of closing costs, and
recognized a gain of approximately $48,499.
Note 4 - Contingencies
The Company remains the subject of asserted claims of employment
discrimination filed with the Equal Employment Opportunity Commission
("EEOC"). The Company has previously responded to the charges of
discrimination and replied to all EEOC requests for information. The ultimate
outcome of these matters remains unknown, at this time. The Company is
vigorously contesting each claim of discrimination.
(Remainder of this page left blank intentionally)
9
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Results of Operations
Bar and restaurant operations decreased by approximately $35,000 during the
first quarter of 1997 as compared to the first quarter of 1996. This decrease
was related to lower convention traffic in the Dallas-Ft. Worth Metroplex during
this time period, which is one of the key factors driving the Company's
patronage factors. Also, due to scheduled increases, the Company experienced
higher rental incomes of approximately $6,500 during this quarter as compared to
the same period in the prior year.
Cost of sales decreased by approximately $23,000 during the first quarter of
1997 as compared to the same expenses for the first quarter of 1996. This
decrease was directly related to lower patronage impacting variable costs
related to consumable inventories, supplies and related State excise taxes.
Gross profit percentages remained relatively constant at 50.2% for the first
quarter of 1997 versus 49.4% for the first quarter of 1996.
Operating expenses increased by approximately $25,000 in the first quarter of
1997 versus the first quarter of 1996. This increase of approximately 9.0%
relate to increases in advertising and marketing expenses to offset the decline
in convention and meeting driven traffic and increase locally derived patronage
and to other non-specific increases in overall administrative and office
expenses. Management continues to monitor its expenditure levels to achieve
optimum financial results.
Net income before income taxes, excluding the gain on the sale of fixed assets
of approximately $48,000, was approximately $184,000 for the first quarter of
1997 versus approximately $209,000 for the first quarter of 1996. After-tax net
income has increased by approximately $41,000 yielding earnings per share of
approximately $0.04 per share for the first quarter of 1997 as compared to
approximately $0.03 per share for the first quarter of 1996.
(2) Liquidity
As of March 31, 1997, the Company has working capital of approximately $24,000
as compared to $(53,000) at March 31, 1996. The Company achieved positive cash
flows from operations of approximately $152,000 for the first quarter of 1997
versus approximately $202,000 for the first quarter of 1996.
The Company has identified no significant capital requirements for the current
annual period. Liquidity requirements mandated by future business expansions or
acquisitions, if any are specifically identified or undertaken, are not readily
determinable at this time as no substantive plans have been formulated by
management.
The Company anticipates the continuance of dividend payments and paid
approximately $150,000 in the first quarter of 1997 and declared a dividend of
approximately $200,000 to be paid in the second quarter of 1997. Future
operating liquidity, debt service and dividend payments are expected to be
sustained from continuing operations. Additionally, management is of the opinion
that there is additional potential availability of incremental mortgage debt and
the opportunity for the sale of additional common stock through either private
placements or secondary offerings.
10
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
None
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Company has held no regularly scheduled, called or special meetings of
shareholders during the reporting period.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MILLION DOLLAR SALOON, INC.
May 7 , 1997 /s/ Nina J. Furrh
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Nina J. Furrh
President and Director
May 7 , 1997 /s/ Ronald W. Johnston
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Ronald W. Johnston
Chief Financial Officer and Director
12
Crown Casino Announces Third Quarter Results
For Immediate Release:
Dallas, Texas - Crown Casino Corporation (NASDAQ:DICE), today announced its
operating results for the three and nine months ended January 31, 1997.
The Company reported the following financial information (in thousands, except
per share data):
Three Months Ended Nine Months Ended
January 31, January 31,
1997 1996 1997 1996
Results of Operations
Revenues $ - $ - $ - $ -
Net income $ (3,531) $ (1,528) $9,621 $ 8,489
Earnings (loss) per share $ (.34) $ (.13) $ .86 $ .70
January 31, April 30,
1997 1996
Balance Sheet
Total assets $39,627 $39,329
Stockholders' equity $36,515 $30,153
Shares outstanding 10,415 11,651
Operating results for the three months ended January 31, 1997 include an after
tax loss of $3.1 million on the sale of 1,885,086 shares of Casino America, Inc.
common stock. The operating results for the nine months ended January 31, 1997
include a pretax gain of $14.9 million from the sale of the Company's remaining
50% interest in St. Charles Gaming Company, Inc, ("SCGC") in May 1996. The
operating results for the nine months ended January 31, 1996 include (i) a
pretax gain of $21.5 million from the sale of the first 50% interest in SCGC in
June 1995, and (ii) a $3.5 million loss representing the Company's equity in the
net loss of SCGC.
Contact: Edward R. McMurphy
Crown Casino Corporation
(972) 717-3423
March 18, 1997