0000771856-95-000002.txt : 19950915 0000771856-95-000002.hdr.sgml : 19950915 ACCESSION NUMBER: 0000771856-95-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19950913 SROS: NASD 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: 1934 Act SEC FILE NUMBER: 000-17263 FILM NUMBER: 95573568 BUSINESS ADDRESS: STREET 1: 1749 OLD MEADOW RD STREET 2: STE 610 CITY: MCLEAN STATE: VA ZIP: 22102 BUSINESS PHONE: 7035563332 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 FORM 10-QSB QUARTERLY REPORT FOR CHAMPIONS SPORTS 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 July 31, 1995 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 610, 1749 Old Meadow Road, McLean, VA 22102 (Address of principal executive offices) (Zip code) (703) 556-3332 (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 September 1, 1995, the Registrant had a total of 7,300,638 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 July 31, 1995 (unaudited) and April 30, 1995 3 Consolidated Statements of Operations: Three months ended July 31, 1995, and July 31, 1994, (unaudited) 4 Consolidated Statements of Cash Flows: Three months ended July 31, 1995, and July 31, 1994 (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 6. Exhibits and Reports on Form 8-K 7 Signatures 8 2 Champions Sports, Inc. Consolidated Balance Sheet
JULY 31, APRIL 30, 1995 1995 UNAUDITED ASSETS Current assets Cash and cash equivalents $100,369 $131,102 Certificate of deposit 25,080 25,080 Accounts receivable - trade 97,933 42,752 Inventories 38,966 41,235 Prepaid expenses 16,005 1,010 Total current assets 278,353 241,179 Property and Equipment Furniture and Equipment 516,382 516,383 Leasehold improvements 567,312 567,312 1,083,695 1,083,695 Accumulated depreciation and amortization (552,904) (529,053) 530,791 554,642 Other assets Deposits 11,052 11,052 Total assets 820,196 806,873 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable 74,883 123,486 Dividend payable on preferred stock 67,290 67,290 Deferred revenues 125,000 75,000 Notes payable 18,671 18,671 Other accrued expenses 38,133 43,720 Current portion of deferred lease concession 4,363 4,363 Total current liabilities 328,340 332,530 Deferred lease concession 36,644 37,734 Note payable, excluding current portion 38,036 43,019 Total Liabilities 403,019 413,283 Stockholders' equity Preferred stock: Series A, 12% convertible, cumulative, par value $10 per share, preferred as to dividends and liquidation: 650,000 shares 56,075 issued and outstanding. 560,752 560,752 Undesignated, par value $10 per share, 150,000 authorized none issued and outsanding Common stock, par value $.001 per share, 50,000,000 shares authorized, 7,300,564 and 7,300,564 shares issued and outstanding at July 31, 1995 and April 30, 1995. 7,301 7,301 Additional paid-in capital 5,249,312 5,249,312 Accumulated deficit (5,400,188) (5,423,775) Total stockholders' equity 417,177 393,590 Total liabilities and stockholders' equity 820,196 806,873
3 CHAMPIONS SPORTS, INC. Consoldiated Statment of Operations (Unaudited)
Three months Three months ended ended July 31, 1995 July 31, 1994 Revenue Food and Beverage sales $457,203 $490,903 Merchandise and memorabilia 4,089 7,232 Initial license fees - - Other franchise fees and royalties 97,104 61,522 Interest income 835 535 Other income 3,280 4,688 $562,512 $564,879 Expense Cost of food and beverage sales 130,064 130,158 Cost of merchandise and 6,792 1,661 memorabilia sales Restaurant payroll and related costs 162,393 169,318 Restaurant occupancy costs 42,795 43,456 Other restaurant costs 110,379 84,105 General and administrative 61,635 109,295 Depreciation and amortization 15,761 25,284 Interest expense 1,016 256 530,834 563,533 Net Income (loss) from continuing $31,678 $1,346 operations Gain on discontinued operations - $4,176 Net Income / (loss) $31,678 $5,523 Net income (loss) per common share* $0.00 $0.00 Weighted average number of common shares outstanding during the period 7,300,564 7,268,536 *The income (loss) per common share has been computed on the weighted average number of shares outstanding during the period. Warrants are not included as common stock equilvants in the computation of income (loss) per share since the effect would not be material.
4 CHAMPIONS SPORTS, INC. Consolidated Statement of Cash Flows Increase (Decrease) in Cash and Cash Equivalents (UNAUDITED)
JULY 31, JULY 31, 1995 1994 Cash flows from operating activities: Net income $31,677 $5,523 Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities Depreciation and amortization 15,761 25,284 (Increase) decrease in accounts receivable (55,181) (9,553) (Increase) Decrease in prepaid expenses (14,995) (266) (Increase) Decrease in inventories 2,269 1,474 (Increase) Decrease in notes receivable 4,166 Decrease in other assets 2,269 (Increase) Decrease in deferred revenues 50,000 (Decrease) Increase in accounts payable (48,603) (15,905) (Decrease) Increase in other current liabilities (5,587) (19,611) (Decrease) Increase in accrued rent (1,000) (Decrease) Increase in deferred lease concession (1,090) (1,091) Total adjustments (57,426) (14,233) Net cash provided by (used in) operating activities (25,749) (8,710) Cash flows from investing activities: Sale of equipment 5,634 Redemption of certificate of deposit 25,000 Sale of liquor license 35,205 Net cash (used in) investing activities 0 65,839 Cash flows from financing activities: Repayment of borrowings and capital leases (4,984) (3,268) Net cash provided by financing activities (4,984) (3,268) Net increase (decrease) in cash and cash equivalents (30,733) 53,861 Cash and cash equivalents at April 30. 131,102 75,466 Cash and cash equivalents at July 31 $100,369 $129,327
5 CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements July 31, 1995 Summarized Financial Information Company or group of companies for which report is filed: CHAMPIONS Sports, Inc. and Subsidiaries The consolidated balance sheet as of July 31, 1995, the consolidated statements of operations and the consolidated statements of cash flows for the three months ended July 31, 1995 and July 31, 1994 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 July 31, 1995 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, 1995. The results of operations for the period ended July 31, 1995 are not necessarily indicative of the operating results for the full year. 6 ITEM 2. Management's Discussion and Analysis of Results of Operation and Financial Condition RESULTS OF OPERATION The results of the quarter ended July 31, 1995 produced a net profit of $31,677, ($0.00 per common share) compared to a net profit of $5,523, ($0.00 per common share), for the same quarter in the preceding year. REVENUES The Company's total revenues were $562,512 for the three months ended July 31, 1995 compared to $564,879 for the three months ended July 31, 1994, a decrease of less than 0.5%. By component, food and beverage sales were $457,203 compared to $490,903 for the same period in FY 1995. The decrease of $33,700 is attributed to a decrease in the volume of customer traffic as there was no material price increase during the three months ended July 31, 1995. Merchandise and memorabilia sales were $4,089 for the quarter ended July 31, 1995 versus $7,232 for the comparable previous period. During the quarters ended July 31, 1995 and July 31, 1994, the Company recognized no initial license fees. Other franchise fees and royalties revenue was $97,104 for the current quarter corresponding to $61,522 in the previous year. Interest income in both comparable quarters amount to less than 1% of the Company's total revenues. EXPENSES Cost of food and beverage was 28.4% of related sales for the quarter ended July 31, 1995 compared to 26.5% of related sales during the preceding quarter. This increase in the cost of food and beverage sales is attributed to menu changes made during the first quarter of FY 96. Cost of merchandise and memorabilia of $6,792 exceeded sales as obsolete inventory items were written of., compared to $1,661 for the three months ended July 31, 1994. Restaurant payroll and related costs were $162,393, 35.5% of related sales, compared to $169,318, 34.5% of related sales for the comparable period. Other restaurant costs were $110,739 versus $84,105 for the three months ended July 31, 1994 and 1993, an increase of 35% which is attributed to increase in repairs and maintenance and advertising of the San Antonio restaurant. Occupancy costs for the same unit in San Antonio were constant to the comparable period in the previous fiscal period. General and administrative costs for the Company's corporate offices were $61,635 for the three months July 31, 1995 and $109,295 for the three months ended July 31, 1994 a decrease of 43.6% which is a result of terminating of the lease for the corporate office in November 1994, decreased corporate staff positions and paring of other expenses. Depreciation and amortization expense fell by $9,523 to $15,761 for the three months ended July 31, 1995 from $25,284 in the comparable period in FY 1994. Interest expense for each of the comparable periods was negligible. LIQUIDITY AND CAPITAL RESOURCES The Company's cash position at July 31, 1995 was $100,369 compared to $131,102 at April 30, 1995, an decrease of $30,733. During the quarter ended July 31, 1995, the Company met its cash needs from its cash reserves and from cash flows provided from its operation in San Antonio, TX. During the quarter ended July 31, 1995, the Company reduced its accounts payable and other current liabilities by $54,190, repaid borrowing of $4,984 and deferred recognition of $50,000 in advanced revenues. During the quarter ended July 31, 1994, the Company met its cash requirements from cash flow generated by its location in San Antonio, TX., the sale of surplus equipment and the sale of the liquor license from its former location in Miami, FL. Additionally, the Company redeemed a certificate of deposit for $25,000. The Company used $14,232 in cash for its operations and decreased its current liabilities $36,516 and repaid capital leases of $3,268. The Company's working capital at July 31, 1994 was a negative $49,987 compared to a negative $91,351 on April 30, 1995. The Company is seeking additional financing and also possible mergers or acquisitions to meet its longer term liquidity needs and to finance its future expansion. There is no assurance that the Company will be able to obtain such financing or acquisitions on terms satisfactory to the Company. MISCELLANEOUS Stockholder's equity on July 31, 1995 was $417,177, an increase of $23,587 from April 30, 1995 which is a result of the net profit of the period. On July 31, 1994, stockholder's equity was $145,696 and $140,173 on April 30, 1994. Item 6. Exhibits and Reports on Form 8-K None. 7 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 Chairman and President /s/ James E. McCollam James E. McCollam Controller and Chief Accounting Officer September 13, 1995 8 EX-27 2 FDS -- QUATER ENDING JULY 31, 1995
5 3-MOS APR-30-1996 MAY-01-1995 JUL-31-1995 100369 25080 97933 0 38966 16005 1083695 (552904) 820196 328340 0 7301 560752 0 (150876) 820196 558397 562512 136856 377202 15761 0 1016 31678 0 31678 0 0 0 31678 0 0