-----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, I4KquzaRNaxCXaY6rByeqzRMZGNNHJOwAD7CvbwhYzJDM1yUPImTbZiaf5V5tP+N U/tqPYHPIvRWWEouMEUd0Q== 0000771856-01-000003.txt : 20010312 0000771856-01-000003.hdr.sgml : 20010312 ACCESSION NUMBER: 0000771856-01-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010131 FILED AS OF DATE: 20010309 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: 1565306 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 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, 2001 ----------------------------------------------------------- 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 9, 2001, the Registrant had a total of 8,514,459 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, 2001 (unaudited) and April 30, 2000 3 Consolidated Statements of Operations: Three months and nine months ended January 31, 2001, and January 31, 2000, (unaudited) 4 Consolidated Statements of Cash Flows: Nine months ended January 31, 2001, and January 31,2000 (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 Assets January 31 April 30, 2001 2000 ------------------- UNAUDITED Current assets Cash and cash equivalents ................................. $ 433,496 $ 591,208 Accounts receivable - trade ............................... 3,455 114,063 Inventories ............................................... 51,898 24,181 Prepaid expenses .......................................... 16,529 25,632 Deferred tax asset ........................................ 207,952 207,952 ------- ------- Total current assets ...................................... 713,329 963,036 Property and equipment Furniture and equipment ................................... 572,547 552,634 Leasehold improvements .................................... 584,772 570,962 ------- ------- 1,157,319 1,123,596 Accumulated depreciation and amortization ................. (817,528) (781,214) -------- -------- 339,791 342,382 Other assets Available for sale investments, at cost ................... 50,000 100,000 Deposits .................................................. 11,052 11,052 ------ ------ Total assets .............................................. $1,114,172$ $1,416,470 ======================== Liabilities and Stockholders' Equity Current liabilities Accounts payable .......................................... $ 118,38 $ 48,173 Dividend payable on preferred stock ....................... 447,690 383,940 Other accrued expenses .................................... 34,811 51,386 Deferred Revenues ......................................... 100,000 -- Current portion of deferred lease concession .............. 4,363 4,363 Current portion of capital lease obligation ............... 8,412 8,412 ----- ----- Total current liabilities ................................. 713,664 496,274 Capital lease obligation, net of current portion .................................... 6,073 12,223 Deferred lease concession, net of current portion ................................... 12,643 16,281 ------ ------ Total liabilities ......................................... 732,380 524,778 Commitments and contingencies Stockholders' equity 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 January 3, 2001 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 January 31,2001 and April 30, 2000, respectively ........................ 8,514 8,514 Additional paid-in capital ................................ 5,337,599 5,337,599 Accumulated deficit ....................................... (5,495,573) (4,985,673) ---------- ---------- Total stockholders' equity ................................ 381,792 891,692 ------- ------- Total liabilities and stockholders' equity ................ $1,114,172 $1,416,470 ========= ========= See notes to consolidated financial statements
3
CHAMPIONS SPORTS, INC. AND SUBSIDIARIES Consolidated Statements of Operations Unaudited Three months Nine Months ended January 31, ended January 31, 2001 2000 2001 2000 Revenue Food and beverage ......................... $ 460,900 $ 461,513 $ 1,414,600 $ 1,378,081 Merchandise, memorabilia, and consulting fees ...................... 9,389 12,650 121,129 203,194 Interest income ........................... 7,171 5,827 21,369 18,017 Other income .............................. 38 3,512 3,947 11,595 -- ----- ----- ------ $ 477,498 $ 483,502 $ 1,561,045 $ 1,610,887 Costs and expenses Cost of food and beverage sales ........... $ 115,847 $ 115,565 $ 359,345 $ 351,723 Cost of merchandise and memorabilia ....... 32,333 10,141 97,464 70,911 Restaurant payroll and related costs ...... 159,468 163,151 495,394 477,651 Restaurant occupancy costs ................ 107,354 53,535 213,473 157,388 Other restaurant costs .................... 95,029 106,232 276,889 279,555 General and administrative ................ 232,156 66,834 475,864 241,391 Depreciation and amortization ............. 12,105 12,105 36,314 36,430 Interest .................................. 830 1,198 2,453 2,964 --- ----- ----- ----- $ 755,123 $ 528,761 $ 1,957,195 $ 1,618,013 Operating income (loss) before income tax e$pense ....................... (277,625) $ (45,259) $ (396,149) $ (7,126) Gain/(Loss) on security held for sale ..... -- 93,684 (50,000) 93,684 Income tax expense ........................ -- -- -- -- Net income (loss) ........................ $ (277,625) $ 48,425 $ (446,149) $ 86,558 Less preferred stock dividends (net of conversions) ..................... (15,938) (15,938) (47,814) (47,814) ------- ------- ------- ------- Net income (loss) available to common .... $ (293,563) $ 32,487 $ (493,963) $ 38,744 =========== =========== =========== =========== stockholders Basic earnings (loss) per share ........... $ (0.03) 0.00 (0.06) 0.00 Earnings (loss) per common share - assuming dilution ................................ $ (0.0$) 0.00 (0.06) 0.00 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, Unaudited 2001 2000 ---- ---- Cash flows from operating activities: Net income (loss) $(446,149) $86,559 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 36,314 36,430 Gain/(Loss) on securities held for sale 50,000 (93,684) Changes in assets and liabilities: Accounts receivable 110,608 (73) Inventories (27,717) (13,469) Prepaid expenses 9,104 (18,222) Deferred revenues 100,000 - Accounts payable 70,214 30,172 Other accrued expenses (16,575) 12,837 Deferred lease concessions (3,638) (2,909) ------ ------ Net cash provided (used) by operating activities (117,839) 37,641 Cash flows from investing activities: Purchases of property and equipment (19,913) (6,156) Leasehold improvements (13,810) - Available for sale investments - (100,000) Purchase of marketable securities - (274,626) Sale of marketable securities - 368,310 ------- Net cash (used) by investing activities (33,723) (12,472) Cash flows from financing activities: Principal payments on capital lease (6,150) (4,048) Net increase (decrease) in cash and cash equivalents (157,712) 21,121 Cash and cash equivalents at beginning of 591,208 726,241 year Cash and cash equivalents at end of year 433,496 524,470 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the year for interest 2,453 2,964 See notes to consolidated financial statements 5 CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements January 31, 2001 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, 2001, the consolidated statements of operations and the consolidated statements of cash flows for the three months and nine months ended January 31, 2001 and January 31, 2000 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, 2001 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 January 31, 2001 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. 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, 2001, the Company's net loss was $446,149 or $0.06 per common share as compared to a net profit of $86,558 or ($0.00) per common share for the nine month period ended January 31, 2000. For the nine months ended January 31, 2001, the Company's ongoing operations generated loss of $396,149 and a loss of $50,000 on a security held for trade compared to a loss from operations of $7,126 and a gain of $93,684 on marketable securities held for trade during the nine months ended January 31, 2000. Dividends accrued for the Company's Preferred Stock (net of conversions) totaled $47,814. The Company's assets decreased to $1,114,172 at January 31, 2001 from $1,416,470 at April 30, 2000. For the three months ended January 31, 2001 the Company's net loss from its ongoing operations was $277,625 compared to a net operating loss of $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. Revenues The Company's total revenues decreased 3.1% to $1,561,045 for the nine months ended January 31, 2001 versus $1,610,887 for the nine month period ended January 31, 2000. By component, food and beverage sales increased 2.6% from the previous year for the nine months and were the flat for the three months period from the previous year. The nominal growth in food and beverage sales is attributed to a increase in customer volume. Merchandise and memorabilia sales for the nine months ended January 31, 2001 decreased 40.4% to $121,129 compared to $203,194. This decrease is attributed directly to the number of Marriott CHAMPIONS locations opened during the period. For the three months ended January 31, 2001, this amount was $9,389 versus $12,650 for the comparable period. For the nine months ended January 31, 2001 and 2000, 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 approximately 25.4% of related sales for all comparable periods. This is attributed to stable prices at the wholesale level. Cost of merchandise and memorabilia sales for the nine months ended January 31, 2001 was $97,464 compared to $70,911 in the preceding year. During the nine months ended January 31, 2001, the Company wrote down memorabilia inventory of approximately $23,000. Restaurant payroll and related costs were approximately 35.0% of related food and beverage sales for all comparable periods. Restaurant occupancy costs were $213,473 for the nine months and $107,354 for the three months ended January 31, 2001 compared to $157,388 for the nine month and $53,535 for the three month comparable period in 2000. This increase is attributed to a retro active increase in common area charges and real estate taxes passed on by the landlord. Other restaurant costs were 19.6% of food and beverage sales for the nine months and 20.6% of food and beverage sales for the three months ended January 31, 2001 compared to 20.3% of food and beverage sales for the comparable nine month and 23.0% for the three months in 2000. General and administrative expense was $475,864 for the nine months ended January 31, 2001 compared to $241,391 for the nine months ended January 31, 2000. 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. Depreciation and amortization expense accounted for 2.3 % of the Company's total revenues during the nine months ended January 31, 2001 and 2000. Liquidity and Capital Resources The Company's cash position on January 31, 2001 decreased by $157,712 to $433,496 from $591,208 on April 30, 2000. For the nine months ended January 31, 2001, the Company's ongoing operations used cash totaling $117,839. For the comparable period ending January 31, 2000, the Company's operations provided excess 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, 2001, the Company held $50,000 of restricted securities of a privately held company and owned no marketable securities held for trade. During the nine months ended January 31, 2001, the Company purchased equipment for its San Antonio CHAMPIONS for $19,913 and made leasehold improvements in that same location totaling $13,810. 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 $4,048. The Company met its cash needs during the nine months ended January 31, 2001 and 2000 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 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's working capital was a negative $335 on January 31, 2001 and $466,762 on January 31 2000. Stockholder's equity was $381,792 as of January 31, 2001 compared to $891,692 as of April 30, 2000. Other In November 2000, the Company's Board of Directors voted to defer the annual meeting of shareholders in order to preserve the Company's cash position. The Board further voted to defer the payment of the annual dividend on the Company's 12% Preferred Stock to preserve the Company's cash position. This amount is accrued on the Company's books as a current liability. Subsequent to January 31, 2001, the Company reduced its equity position in CHAMPIONS Tech Ventures, Inc. to 36% and will no longer consolidate the results of CHAMPIONS Tech Ventures, Inc. into the Company's financial statements. Furthermore, the Company will not commit any further funding of the operating activities of CHAMPIONS Tech Ventures, Inc. 7 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. 8 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 President /s/ James E. McCollam James E. McCollam Corporate Secretary, Chief Accounting Officer and Controller March 9 2001 9 EX-27 2 0002.txt
5 9-MOS APR-30-2001 JAN-31-2001 433,496 0 3,455 0 51,898 713,329 572,547 (817,528) 1,114,172 713,664 0 0 531,252 8,414 (157,974) 1,114,172 1,535,829 1,561,045 456,809 985,756 514,631 0 2,453 (396,149) 0 (396,149) 0 (50,000) 0 (446,149) (0.06) (0.06)
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