-----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, AN8OEHXG42XRY/0Dv0M1zaEXytlQDPwxI+6xIRvzd74HciSICARNcKoz2VO0pmkp whIbdGp8RsJPWHmN+Os75Q== 0000771856-00-000009.txt : 20001218 0000771856-00-000009.hdr.sgml : 20001218 ACCESSION NUMBER: 0000771856-00-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001031 FILED AS OF DATE: 20001215 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: 790307 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 0001.txt QUARTERLY REPEORT 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 October 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.) Suite 214, 2420 Wilson Boulevard, 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 December 10, 2000 the Registrant had a total of 8,514,459 shares of common stock outstanding. CHAMPIONS SPORTS, Inc. FORM 10-QSB INDEX Page Part I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets as of October 31, 2000 (unaudited) and April 30, 2000 3 Consolidated Statements of Operations: Three months and six months ended October 31, 2000, and October 31, 1999, (unaudited) 4 Consolidated Statements of Cash Flows: Six months ended October 31, 2000, and October 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
CHAMPIONS SPORTS, INC. AND SUBSIDIARIES Consolidated Balance Sheets Assets October 31, April 30, 2000 2000 ------------ ------------- UNAUDITED --------- Current assets Cash and cash equivalents ................................... $541,706 $591,208 Accounts receivable - trade ............................... 5,952 114,063 Inventories ............................................... 26,447 24,181 Prepaid expenses .......................................... 22,249 25,632 Deferred tax asset ........................................ 207,952 207,952 ---------- ---------- Total current assets ............................... 804,305 963,036 ---------- ---------- Property and equipment Furniture and equipment ................................... 572,547 552,634 Leasehold improvements .................................... 577,884 570,962 ---------- ---------- 1,150,432 1,123,596 Accumulated depreciation and amortization ................. (805,423) (781,214) ---------- ---------- 345,009 342,382 ---------- ---------- Other assets Available for sale investments, at cost ................... 50,000 100,000 Deposits .................................................. 11,052 11,052 ---------- ---------- Total assets ....................................... $1,210,366 $1,416,470 ========== ========== Liabilities and Stockholders' Equity Current liabilities Accounts payable .......................................... $22,946 $48,173 Dividend payable on preferred stock ....................... 383,940 383,940 Other accrued expenses .................................... 45,574 51,386 Current portion of deferred lease concession .............. 4,363 4,363 Current portion of capital lease obligation ............... 8,412 8,412 ---------- ---------- Total current liabilities .......................... 465,236 496,274 ---------- ---------- Capital lease obligation, net of current portion ............. 8,227 12,223 Deferred lease concession, net of current portion ............ 13,737 16,281 ------ ------ Total liabilities .................................. 487,199 524,778 ---------- ---------- Commitments and contingencies Stockholders' equity Preferred stock Series A, 12% Convertible Cumulative; $10 par value; preferred as to dividends and liquidation; 56,075 shares authorized; 53,125 shares issued and outstanding for October 31 and April 30, 2000 respectively .............. 531,252 531,252 Common stock, par value $.001 per share, 50,000,000 shares authorized; 8,514,459 shares issued and outstanding at October, 31 and April 30, 2000, respectively ............................................ 8,514 8,514 Additional paid-in capital ................................ 5,337,599 5,337,599 Accumulated deficit ....................................... (5,154,198) (4,985,673) ---------- ---------- Total stockholders' equity ......................... 723,167 891,692 ---------- ---------- Total liabilities and stockholders' equity ......... $1,210,366 $1,416,470 ========== ========== See notes to consolidated financial statements
CHAMPIONS SPORTS, INC. AND SUBSIDIARIES Consolidated Statements of Operations Unaudited Three months Six months ended October 31, ended October 31, 2000 1999 2000 1999 Revenue Food and beverage ........................... $450,308 $393,356 $953,699 $916,568 Merchandise, memorabilia, and consulting fees 10,529 85,818 111,740 190,544 Interest income ............................. 7,377 5,390 14,199 12,190 Other income ................................ 1,967 3,547 3,909 8,083 ----- ----- ----- ----- 470,181 488,111 1,083,547 1,127,385 Costs and expenses Cost of food and beverage sales ............. 116,910 103,194 243,498 236,158 Cost of merchandise and memorabilia ......... 31,987 22,367 65,130 60,770 Restaurant payroll and related costs ........ 161,938 142,454 335,926 314,500 Restaurant occupancy costs .................. 53,801 51,158 106,119 103,853 Other restaurant costs ...................... 95,515 77,477 181,860 173,323 General and administrative .................. 156,689 57,959 243,707 174,557 Depreciation and amortization ............... 12,104 12,105 24,209 24,325 Interest .................................... 948 846 1,622 1,766 --- --- ----- ----- 629,893 467,560 1,202,072 1,089,252 Operating income(loss) before income tax expense (159,712) 20,551 (118,525) 38,133 Loss on security held for sale .................. -- -- (50,000) -- Income tax expense .............................. -- -- -- -- Net income (loss)......................... (159,712) 20,551 (168,525) 38,133 Less preferred stock dividends (net of .......... (15,938) (15,938) (31,876) (31,876) ------- ------- ------- ------- conversions) Net income (loss) available to common .... $(175,650) $4,613 $(200,401) $6,257 ========= ====== ========= ====== stockholders Basic earnings (loss) per share ................. $0.02) $0.00 $(0.02) $0.00 Earnings (loss) per common share - assuming dilution ...................................... $(0.02) $0.00 $(0.02) $0.00 See notes to consolidated financial statements
CHAMPIONS SPORTS, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Increase (Decrease) in Cash and Cash Equivalents For the six months ended October 31, Unaudited 2000 1999 ---- ---- Cash flows from operating activities: Net inccome (loss) ............................. (168,525) 38,133 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization ................ 24,209 24,325 Loss on securities held for sale ............. 50,000 -- Changes in assets and liabilities: Accounts receivable ....................... 108,111 (75,031) Inventories ............................... (2,266) (4,866) Prepaid expenses .......................... 3,383 (5,493) Accounts payable .......................... (25,227) 42,461 Other accrued expenses .................... (5,812) (5,076) Deferred lease concessions ................ (2,544) (1,837) Net cash provided (used) by operating activities ................ (18,671) 12,616 Cash flows from investing activities: Purchases of property and equipment ............ (19,913) (1,148) Leasehold improvements ......................... (6,922) Available for sale investments ................. -- (100,000) Purchase of marketable securities .............. -- (111,059) Net cash (used) by investing activities (26,835) (212,207) Cash flows from financing activities: Principal payments on capital lease ............ (3,996) (2,180) Net increase (decrease) in cash and cash equivalents ................................. (49,502) (201,771) Cash and cash equivalents at beginning of year ..... 591,208 726,241 Cash and cash equivalents at end of year ........... 541,706 524,470 Supplemental disclosures of cash flow information: Cash paid during the year for interest ......... 1,622 1,766 See notes to consolidated financial statements CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements October 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 October 31, 2000, the consolidated statements of operations for the three months and six months ended October 31, 2000 and October 31, 1999 and the consolidated statements of cash flows for the six months ended October 31, 2000 and October 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 October 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, 2000. The results of operations for the period ended October 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 risk and uncertainties. The Company's actual results could differ materially from those anticipated in the 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, and the ability to have access to financing sources on reasonable terms in order to pursue the Company's diversification efforts. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operation For the six months ended October 31, 2000, the Company's net loss from operations was $168,525 before preferred stock dividends of $31,876 resulting in a net loss of $200,401 or ($0.02) per common share For the six months ended October 31, 1999, the Company's net income from operations was $38,133 before preferred stock dividends of $31,876 resulting in a net income of $6,257 or $0.00 per common share. The Company's assets decreased to $1,210,366 at October 31, 2000 from $1,416,470 at April 30, 2000 as a result of the net loss for the six month period. Revenues The Company's total revenues decreased 3.9% for the six month period and 3.7% for the three month period ended October 31, 2000. The Company's total revenues were $1,083,547 and $1,127,385 for the six months ended October 31, 2000 and 1999. By component, food and beverage sales increased 4.1% to $953,699 for the six months ended October 31, 2000 from $916,568 for the six months ended October 31, 1999. The increase in food and beverage sales is attributed to an increase in customer volume and an increase in the average customer check, as there were no increases in retail pricing. For the three month period, food and beverage sales increased 14.5% for the comparable period. The increase in food and beverage sales is a result of an increase in customer volume during the quarter ended October 31, 2000. Merchandise and memorabilia sales for the six months ended October 31, 2000 were $111,740 compared to $190,544 in the comparable period. The Company provided sports memorabilia to one Marriott Champions locations during the six months ended October 31, 2000 and two Marriott Champions location during the six months ended October 31, 1999. Interest income and other income represent 2% or less of the Company's total revenues for the three months and six months ended October 31, 2000 and 1999. Expenses Cost of food and beverage remained relatively constant at 25.5% versus 25.8% of food and beverage sales of for the six months ended October 31, 2000 and 1999. Cost of merchandise and memorabilia sales was 58.3% and 31.9% of related sales for the six months ended October 31, 2000 and 1999. During the six months ended October 31, 2000, the Company wrote down memorabilia inventory of approximately $23,000. Restaurant payroll and related costs increased to 35.2% of related sales for the six months ended October 31, 2000 compared to 34.3% of food and beverage sales during 1999. Restaurant occupancy costs remained constant at 11.1% and 11.3% of restaurant sales for the six month comparable periods. Other restaurant costs also remained relatively constant for the comparable periods at approximately 19.0% of restaurant sales. General and administrative expense for the Company's corporate office was $243,707 or 22.5% of the Company's total revenues for the six months ended October 31, 2000 compared to $174,557 or 15.5% for the six months ended October 31, 1999. This increase is attributed to the Company's effort to diversify into high-technology by expanding the management team to focus on business opportunities in that sector as announced on August 23, 2000 and the formation of a wholly owned subsidiary, Champions Tech Ventures. For the three and six months ended October 31, 2000, the Company has expended approximately $85,000 for this diversification. To date, the Company's diversification efforts in high-technology have not yet produced revenue.Depreciation and amortization expense represented 2.2% of the Company's total revenues during each six-month period. Liquidity and Capital Resources The Company's cash position on October 31, 2000 was $541,706 compared to $591,208 on April 30, 2000, a decrease of $49,502. For the six months ended October 31, 2000, the Company's operating activities used $18,671 in cash. The Company used its cash to repay equipment leases for $3,996. The Company purchased equipment for $19,913 and made leasehold improvements of $6,932. For the six months ended October 31, 1999, the Company's operating activities provided $12,616 in cash. The Company purchased $1,148 in property and equipment. The Company, for the six months ended October 31, 1999, purchased marketable investment securities for $111,059 and restricted investment securities for $100,000. During the six months ended October 31, 2000 and 1999, the Company met its cash needs from its revenues and cash reserves and from cash flow from its San Antonio operation. On October 31, 2000 the Company's working capital was $339,069 versus $466,762 on April 30, 2000. To continue its diversification efforts, the Company will need to raise additional capital through a Private Placement. The Company anticipates that the revenues generated from its operations, its cash reserves and its funding efforts, if successful, will be sufficient to meet its operating obligations for the next twelve months. Should the Company be unable to raise sufficient capital, its diversification efforts may be halted. Stockholder's equity decreased to $723,167 as of October 31, 2000 compared to $891,692 as of April 30, 2000, as a result of the net loss for the six month period. Subsequent Events In November, 2000, the Board of Directors, in order to preserve the Company's cash reserves, voted to defer payment of $63,750, the annual dividend on the Series A, 12% convertible, cumulative Preferred Stock, par value $10, of which there were 53,125 shares outstanding at October 31, 2000. The Board of Directors also voted to defer the annual meeting of security holders in order to preserve the Company's cash reserves. Other Matters The Company continues to review and evaluate its operations and priorities, and is actively pursuing its diversification opportunities to meet its longer-term growth and liquidity needs. The Company is considering a Private Placement to fund its diversification efforts into high-technology, however, there is no assurance that the Company will be able to raise sufficient capital, if any, to continue it's diversification efforts. Should the Company be unable to raise sufficient capital, its diversification efforts may be halted. Part II. Other Information Item 4. Submission of Matters to A Vote of Security Holders There were no matters submitted to a vote of Security Holders during the three month period ended October 31, 2000. Item 6. Exhibits and Reports on Form 8-K None. 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 M. Martell -------------------- James M. Martell President /s/ James E. McCollam --------------------- James E. McCollam Controller and Chief Accounting Officer December 14, 2000 EX-27 2 0002.txt FDS --
5 6-mos APR-30-2001 OCT-31-2000 541,706 0 5,952 0 26,447 804,305 1,150,432 (805,423) 1,210,366 465,236 0 0 531,252 8,501 183,401 1,210,366 1,065,439 1,083,547 308,628 623,905 267,916 0 1,622 (118,525) 0 (118,525) 0 (50,000) 0 (168,525) (0.02) (0.02)
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