-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IO17BND3xjNcMwJhP+/ZpL85UGcH+Im2uurNDd02m9xgNt0IE3o2HdVOt5GMRt3x TtSYeVf9QU3QUOUwp1g+Kg== 0000771856-00-000003.txt : 20000313 0000771856-00-000003.hdr.sgml : 20000313 ACCESSION NUMBER: 0000771856-00-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000131 FILED AS OF DATE: 20000310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHAMPIONS SPORTS INC CENTRAL INDEX KEY: 0000771856 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING & DRINKING PLACES [5810] IRS NUMBER: 521401755 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-17263 FILM NUMBER: 566563 BUSINESS ADDRESS: STREET 1: 2500 WILSON BLVD STREET 2: SUITE 305 CITY: ARLINGTON STATE: VA ZIP: 22201 BUSINESS PHONE: 703-526-04 MAIL ADDRESS: STREET 1: 1749 OLD MEADOW RD STREET 2: STE 610 CITY: MCLEAN STATE: VA ZIP: 22102 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL GROUP INC DATE OF NAME CHANGE: 19860319 10QSB 1 QUARTERLY REPORT FOR CHAMPIONS SPORTS, INC. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB Mark One QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF [X ] THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2000 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF [ ] THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-17263 CHAMPIONS SPORTS, INC. ---------------------- (Exact name of registrant as specified in its charter) Delaware 52-1401755 -------- ---------- (State or other jurisdiction of (I.R.S. Employer organization) Identification No.) 2420 Wilson Blvd., Suite 214, Arlington VA 22201 ------------------------------------------------ (Address of principal executive offices) (Zip code) (703) 526-0400 -------------- (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 As of March 10, 2000, the Registrant had a total of 8,513,591 shares of common stock outstanding. 1 CHAMPIONS SPORTS, Inc. FORM 10-QSB INDEX Page Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of January 31, 2000 (unaudited) and April 30, 1999 3 Consolidated Statements of Operations: Three months and nine months ended January 31, 2000, and January 31, 1999, (unaudited) 4 Consolidated Statements of Cash Flows: Nine months ended January 31, 2000, and January 31,1999 (unaudited) 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussions and Analysis of Financial Condition and Results of Operations 7 Part II. Other Information and Signatures Item 4. Submission of Matters to a Vote of Security Holders 9 Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 2 Champions Sports, Inc. and Subsidiaries Consolidated Balance Sheets January 31, 2000 April 30, 1999 UNAUDITED ASSETS Current assets Cash and cash equivalents $747,362 $726,241 Marketable securities - - Accounts receivable - trade 873 800 Inventories 33,645 20,176 Prepaid expenses 21,454 3,232 Deferred tax asset 207,952 207,952 Total current assets $1,011,286 $958,401 Property and Equipment Furniture and Equipment 545,275 539,139 Leasehold improvements 570,962 570,962 1,116,237 1,110,101 Accumulated depreciation and amortization (767,119) (729,420) Total Property and Equipment 349,118 380,681 Other assets Deposits 11,052 11,052 Investments 100,000 - Total assets $1,471,456 $1,350,134 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $66,990 $36,817 Dividend payable on preferred stock 383,940 336,450 Notes payable 6,885 6,885 Other accrued expenses 50,860 38,023 Current portion of deferred lease concession 4,363 4,363 Total current liabilities 513,038 422,538 Deferred lease concession (excluding current portion) 17,372 20,281 Note payable, excluding current portion 15,597 19,645 Commitments and contingencies Stockholders' equity Preferred stock: Series A, 12% convertible cumulative, par value $10 per share,preferred as to dividends and liquidation: 56,075 shares authorized: 53,325 and 55,775 issued and outstanding at January 31, 2000 and April 30, 1999 533,250 557,752 Common stock, par value $.001 per share, 50,000,000 shares authorized: 8,513,591 and 8,500,638 shares issued and outstanding at October 31 and April 30, 1999 8,504 8,502 Additional paid-in capital 5,334,322 5,311,111 Accumulated deficit (4,950,626) (4,989,695) Total stockholders' equity 925,450 887,670 Total liabilities and stockholders' equity $1,471,457 $1,350,134 See notes to consolidated financial statements 3
CHAMPIONS SPORTS, INC. Consolidated Statement of Operations (Unaudited) Three months Three months Nine months Nine months ended January 31 ended January 31 ended January 31 ended January 31 2000 1999 2000 1999 Revenue Food and beverage sales $461,513 $409,758 $1,378,081 $1,276,838 Merchandise, memorabilia and consulting fee 12,650 236,703 203,194 330,929 Interest income 5,827 5,571 18,017 17,789 Other income 3,512 3,493 11,595 13,747 Total Revenues $483,502 $655,525 $1,610,887 $1,639,303 Expense Cost of food and beverage sales $115,565 $112,295 $351,723 $346,282 Cost of merchandise and memorabilia 10,141 74,828 70,911 105,832 Restaurant payroll and related costs 163,151 150,960 477,651 448,726 Restaurant occupancy costs 53,535 48,415 157,388 155,422 Other restaurant costs 106,232 93,900 279,555 283,254 General and administrative 66,834 114,536 241,391 278,838 Depreciation and amortization 12,105 13,567 36,430 40,702 Interest expense 1,198 - 2,964 - Total Expense 528,761 608,501 1,618,013 1,659,056 Net Income (loss) from operations ($45,259) $47,024 $(7,126) $(19,753) Gain on the sale of securities held for trade 93,684 - 93,684 - Less preferred stock dividends 15,998 15,998 47,994 47,994 Net income (loss) $32,427 $31,026 $38,564 $(67,747) Basic earnings per common share $0.00 $0.00 $0.00 $(0.01) Earnings per common share - $0.00 $0.00 $0.00 $(0.01) fully diluted Weighted average number of common shares outstanding during the period 8,513,591 8,500,638 8,513,591 8,500,638 See notes to consolidated financial statements
4 CHAMPIONS SPORTS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Increase (Decrease) in Cash and Cash Equivalents For the nine months ended January 31, 2000 1999 Cash flows from operating activities: Net income $86,559 $(19,751) Adjustments to reconcile net income to cash provided by (used ) by operating activities: Depreciation and amortization 36,430 40,702 Gain on the sale of marketable securities held for trade (93,684) - Changes in asset and liabilities Accounts receivable (73) (25,838) Inventories (13,469) 9,067 Prepaid expenses (18,222) (10,174) Accounts payable 30,172 83,774 Other accrued expenses 12,837 (12,027) Deferred lease concessions (2,909) (3,272) Net cash provided (used) by operating activities 37,641 62,481 Cash flows from investing activities: Purchase of restricted securities (100,000) - Purchase of marketable securities held for trade (274,626) - Sale of marketable securities held for trade 368,310 - Purchase of property and equipment (6,156) (4,015) Net cash provided ( used) by investing activities (12,472) (4,015) Cash flows from financing activities: Repayment of borrowings (4,048) - Net cash provided (used) by financing activities (4,048) - Net increase(decrease)in cash and cash equivalents 21,121 58,466 Cash and cash equivalents at beginning of year 726,241 631,230 Cash and cash equivalents at January 31, 747,362 689,696 Supplemental disclosure of cash flow information: Cash paid during the period for interest 2,964 - See notes to consolidated financial statements 5 CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements January 31, 2000 Summarized Financial Information Company or group of companies for which report is filed: CHAMPIONS Sports, Inc. and Subsidiaries The consolidated balance sheet as of January 31, 2000, the consolidated statements of operations and the consolidated statements of cash flows for the three months and nine months ended January 31, 2000 and January 31,1999 have been prepared by the company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flow at January 31, 2000 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 10-KSB as of April 30, 1999. The results of operations for the period ended January 31, 2000 are not necessarily indicative of the operating results for the full year. This document contains "forward-looking statements" (within the meaning of the Private Securities Litigation Act of 1995) that inherently involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of unforeseen external factors. These factors may include, but are not limited to, changes in general economic conditions, customer acceptance of products offered and other general competitive factors. 6 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operation For the nine month period ended January 31, 2000, the Company's net income was $38,564 or $0.00 per common share as compared to a net loss of $67,747 or ($0.01) per common share for the nine month period ended January 31, 1999. For the nine months ended January 31, 2000, the Company's ongoing operations generated loss of $7,126 and the Company realized a gain of $93,684 on marketable securities held for trade , compared to a loss of $19,753 from continuing operations in the comparable period ended January 31, 1999. Dividends accrued for the Company's Preferred Stock totaled $47,994. The Company's assets increased to $1,471,456 at January 31, 2000 from $1,350,134 at April 30, 1999. The Company's net loss from its ongoing operations was $45,259, and a realized gain of $93,684 from the sale of marketable securities held for trade during the three months ended January 31, 2000 versus a net income from operations of $47,024 for the three months ended January 31, 1999. Revenues The Company's total revenues were $1,610,887 for the nine months ended January 31, 2000 versus $1,639,303 for the nine month period ended January 31, 1999, a decrease of 1.7%. By component, food and beverage sales increased 7.9% from the previous year, for the nine months and 12.6% for the three months period from the previous year. This increase in food and beverage sales is attributed to a increase in customer volume, especially during the NBA playoff games and to an approximate 4% increase in menu prices initiated in October of 1999. Sales trends continue to improve and are expected to increase 7 to 8% to the comparable prior year. Merchandise and memorabilia sales for the nine months ended January 31, 2000 decreased 38.6% to $203,194 compared to $330,929 or 20.1% of the Company's total revenues for the nine months ended January 31,1999. This decrease is attributed directly to the number of Marriott CHAMPIONS locations opened during the period. For the three months ended January 31, 2000, this amount was $12,650, or 2.6% of the Company's total revenue versus $236,703 or 36.1 % of the Company's revenues for the three months ending January 31, 1999 and $203,194 or 12.6% for the nine months ended January 31, 2000 and $330,929 or 20.2% for the nine months ended January 31, 1999. For the nine months ended January 31, 2000 and 1999, other income was less than 1% of the Company's total revenues. Interest income in all comparable periods was approximately1.1% the Company's total revenue. Expenses Cost of food and beverage remained constant at 25.5% of related sales for the nine months and 25.0% for the three months ended January 31, 2000 compared to 27.1% for the nine months and 27.4% for the three months ended January 31, 1999. This is attributed to stable prices at the wholesale level and an increase in menu prices. Cost of merchandise and memorabilia sales for the nine months ended January 31, 2000 was $70,911 compared to $105,832 in the preceding year. Restaurant payroll and related costs were 34.7% of related food and beverage sales for the nine months and 35.4% for the three months ended January 31, 2000, versus 35.1% for the nine months and 36.8% for the three months ended January 31, 1999. Restaurant occupancy costs were $157,388 for the nine months and $53,535 for the three months ended January 31, 2000 compared to $155,422 for the nine month and $48,415 for the three month comparable period in 1999. This 7 increase is attributed to higher common area charges and real estate taxes passed on by the landlord. Other restaurant costs were 20.1% of food and beverage sales for the nine months and 23.1 of food and beverage sales for the three months ended January 31, 2000 compared to 22.2% of food and beverage sales for the comparable nine month and 22.9% for the three months in 1999. General and administrative expense for the Company's corporate office was $241,391 for the nine months ended January 31, 2000 compared to $278,838 for the nine months ended January 31, 1999. Depreciation and amortization expense accounted for less than 2.5 % of the Company's total revenues during the nine months ended January 31, 2000 and 1999. Liquidity and Capital Resources The Company's cash position on January 31, 2000 increased by $21,121 to $747,362 from $726,241 on April 30, 1999. For the nine months ended January 31, 2000, the Company's ongoing operations provided cash of $37,641 and the Company realized a gain of $93,684 from the sale of marketable securities held for trade. At January 31, 2000, the Company held $100,000 of restricted securities of privately held companies and owned no marketable securities held for trade. Subsequent to January 31, 2000, the Company purchased additional marketable securities held for trade for approximately $300,000. During the nine months ended January 31, 2000, the Company purchased equipment for $6,156 for the CHAMPIONS location in San Antonio, Texas and repaid borrowing of $4,040. Fro the nine months ended January 31, 1999, the Company's operating activities provided $62,481 in cash. The Company met its cash needs during the nine months ended January 31, 2000 and 1999 from its revenues and from cash flow from its San Antonio, Texas operation. The Company anticipates that the revenues generated from its location in San Antonio, Texas along with revenues generated from its consulting and sales of memorabilia will be sufficient to meet its operating obligations for the next twelve months. The Company's working capital was $498,248 on January 31, 2000 and $535,863 on January 31 1999. Stockholder's equity was $925,450 as of January 31, 2000 compared to $887,670 as of April 30, 1999. The Company continues to review and evaluate its operations and priorities. The Company is actively pursuing merger or acquisition candidates and other opportunities to meet its longer term liquidity needs. There is no assurance that the Company will be able to structure a merger or acquisition on terms satisfactory to the Company. Other In November 1999, the Company's Board of Directors voted to defer the annual meeting of shareholders in order to preserve the Company's cash position. 8 Part II. Other Information Item 4. Submission of Matters to A Vote of Security Holders None Item 6. Exhibits and Reports on Form 8-K None. 9 SIGNATURES Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHAMPIONS Sports, Inc. /s/ James Martell James Martell Chairman, President and Chief Executive Officer /s/ James E. McCollam James E. McCollam Corporate Secretary, Chief Accounting Officer and Controller March 10, 2000 10 EX-27 2 FDS -- FOR THE NINE MONTHS ENDED JAN 31, 2000
5 9-MOS APR-30-2000 JAN-31-2000 747,362 0 873 0 33,645 1,011,286 1,116,237 (767,119) 1,471,456 513,038 0 0 533,250 8,504 383,696 1,471,457 1,581,278 1,610,887 422,634 914,594 241,391 0 2,964 (7,126) 0 (7,126) 0 93,684 0 38,564 .00 .00
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