-----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, E1MS80ctZ9q5R+XopyjPpMEv+QsRtHgdouhE3g2AOtTHss6XvNMpJFpIIS2Rkmbq tD49yQCBKVaRMQkiAXJBbg== 0000771856-99-000007.txt : 19990915 0000771856-99-000007.hdr.sgml : 19990915 ACCESSION NUMBER: 0000771856-99-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990731 FILED AS OF DATE: 19990914 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: 99710896 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 July 31, 1999 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 Blvd., 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 September 9,1999, 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 July 31, 1999 (unaudited) and April 30, 1999 3 Consolidated Statements of Operations: Three months ended July 31, 1999, and July 31, 1998, (unaudited) 4 Consolidated Statements of Cash Flows: Three months ended July 31, 1999, and July 31,1998 (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 JULY 31 APRIL 30 1999 1999 (UNAUDITED) ASSETS Current assets Cash and cash equivalents $638,416 $726,241 Accounts receivable - trade 703 800 Inventories 22,582 20,176 Prepaid expenses 10,546 3,232 Deferred tax asset 207,952 207,952 ------- ------- Total current assets 880,198 958,401 Property and Equipment Furniture and Equipment 539,139 539,139 Leasehold improvements 570,962 570,962 ------- ------- 1,110,101 1,110,101 Accumulated depreciation and amortization (742,909) (729,420) -------- -------- 367,192 380,681 Other assets Deposits 11,052 11,052 Investments 167,030 - ------- ------- Total assets $1,425,472 $1,350,134 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $99,749 $36,817 Dividend payable on preferred stock 336,450 336,450 Notes payable 6,885 6,885 Other accrued expenses 35,917 38,023 Current portion of deferred lease concession 4,363 4,363 ----- ----- Total current liabilities 483,364 422,538 Deferred lease concession (excluding current portion) 19,553 20,281 Note payable, excluding current portion 18,592 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 July 31 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 July 31 and April 30, 1999 8,504 8,502 Additional paid-in capital 5,335,419 5,311,111 Accumulated deficit (4,973,210) (4,989,695) ---------- ---------- Total stockholders' equity 903,962 887,670 Total liabilities and stockholders' equity $1,425,472 $1,350,134 ========== ========== See notes to consolidated financial statements 3 CHAMPIONS SPORTS, INC. Consolidated Statement of Operations (Unaudited) Three months ended July 31, 1999 1998 ---- ---- Revenue Food and beverage sales $523,212 $457,512 Merchandise, memorabilia and consulting fee 104,726 83,584 Interest income 6,800 6,111 Other income 4,536 8,235 ----- ----- $639,273 $555,443 Expense Cost of food and beverage sales 132,964 123,513 Cost of merchandise and memorabilia sales 38,403 24,686 Restaurant payroll and related costs 172,046 150,743 Restaurant occupancy costs 52,695 52,494 Other restaurant costs 95,846 90,987 General and administrative 116,598 76,686 Depreciation and amortization 12,220 13,567 Interest expense 920 - --- 621,692 532,676 Net Income $17,581 $22,767 Less preferred stock dividends $15,998 $16,800 ------- ------- Net income (loss) available to common share holders $1,584 $5,967 ====== ====== Basic earnings per share $0.00 $0.00 ===== ===== Earnings per common share - assuming full dilution $0.00 $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 three months ended July 31, 1999 1998 ---- ---- Cash flows from operating activities: Net income $17,581 $22,767 Adjustments to reconcile net income to cash provided by (used ) by operating activities: Depreciation and amortization 12,201 13,567 Changes in asset and liabilities Accounts receivable 97 (38) Inventories (2,406) 18,191 Prepaid expenses (7,314) (8,145) Accounts payable 62,932 6,971 Other accrued expenses (2,106) (6,520) Deferred lease concessions (727) (363) ---- ---- Net cash provided (used) by operating activities 80,258 46,430 Cash flows from investing activities: Purchase of restricted securitites (100,000) - Purchase of marketable investment securitites (67,030) - ------- --- Net cash provided by investing activities (167,030) - Cash flows from financing activities: Repayment of borrowings (1,053) - ------ --- Net cash provided (used) by financing activities (1,053) - Net increase (decrease) in cash and cash equivalents (87,825) 46,430 Cash and cash equivalents at beginning of year 726,241 631,230 Cash and cash equivalents at July 31 638,416 677,660 == ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for interest 919 - See notes to consolidated financial statements 5 CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements July 31, 1999 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, 1999, the consolidated statements of operations and the consolidated statements of cash flows for the three months ended July 31, 1999 and July 31,1998 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, 1999 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 July 31, 1999 are not necessarily indicative of the operating results for the full year. 6 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operation - -------------------- For the three month period ended July 31, 1999, the Company's net income was $17,581, and the net income available to common shareholders was $1,584 ($0.00 per common share). For the three months ended July 31, 1998, the net income was $22,767 and the net income available to common shareholders of $5,967 ($0.00 per common share). The Company's assets increased to $1,425,472 at July 31, 1999 from $1,350,134 at April 30, 1999. Revenues - -------- The Company's total revenues were $639,273 for the three months ended July 31, 1999 versus $555,443 for the three month period ended July 31, 1998, an increase of $83,830 or 15.1%. By component, food and beverage sales increased 14.3% from the previous year for the three months ended July 31, 1999. This increase in food and beverage sales is attributed to a increase in customer volume during the NBA championship playoff games held in San Antonio during June 1999, as there were no material price increases for menu items. Merchandise, memorabilia and consulting revenues increased 25.3% for the three months ended July 31, 1999 to $104,726 compared to $83,584 during the comparable period in the prior year. This increase is attributed to the increase in merchandise sales at the San Antonio location. Interest income was 1.1% of the Company's total revenue for both comparable periods. Other income represented approximately 1.0% of total revenues for the three months ended July 31, 1999 and 1998. Expenses - -------- Cost of food and beverage was 25.4% of related sales for the three months ended July 31, 1999 compared to 27.0% for the three months ended July 31, 1998. Cost of merchandise and memorabilia sales for the three months ended July 31, 1998 was $38,403 compared to $24,686 in the preceding year. Restaurant payroll and related costs were 32.9% of related food and beverage sales for the three months ended July 31, 1999 and 1998. Restaurant occupancy costs remained constant for both comparable periods. Other restaurant costs also remained constant during both periods at approximately 19% of food and beverage sales. General and administrative expense for the Company's corporate office was 18.2% of the Company's total revenues for the three months ended July 31, 1999 compared to 13.8 % of total revenues for the three months ended July 31, Depreciation and amortization expense decreased to $12,220 during the three months ended July 31, 1999 from $13,567 during the three months ended July 31, 1998, as some of the Company's restaurant equipment has become fully depreciated. 7 Liquidity and Capital Resources - ------------------------------- The Company's cash position on July 31, 1999 was $638,416 compared to $726,241 on April 30, 1999, a decrease of $87,825. For the three month ended July 31, 1999, the Company's operating activities provided net cash of $80,258. The Company used its cash to repay equipment leases for $1,053. The Company purchased marketable investment securities for $67,030 and restricted securities for $100,000. For the three months ended July 31, 1998, the Company operating activities provided $46,430 in cash. During the three months ended July 31, 1998, the Company did not use any funds for investing. The Company met its cash needs during the three months ended July 31, 1999 and 1998 from its revenues and from cash flow from its San Antonio, Texas operation. The Company anticipates that it will be able to meet its cash requirements for the next twelve months from its cash reserves and from its operating activities. The Company's working capital was $396,834 on July 31 1999 and $535,863 on April 30, 1999. Stockholder's equity was $903,962 as of July 31, 1999 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 met 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 - ----- 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. YEAR 2000 - --------- The Company has taken appropriate measures by purchasing software and computer equipment that is compliant with identifying the year 2000. However, the Company relies on outside vendors and financial institutions and there is no assurance that these vendors and financial institutions will be able to meet the year 2000 requirements. 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 hereunto 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 September 14, 1999 10 EX-27 2 FDS FOR THE THREE MONTHS ENDED JULY 31, 1999
5 3-mos APR-30-2000 JUL-31-1999 638,416 167,030 703 0 22,582 880,198 1,110,101 (742,909) 1,425,472 483,364 0 0 533,250 8,504 362,209 903,962 632,473 639,273 171,367 224,741 128,818 0 920 17,581 0 17,581 0 0 0 17,581 0.00 0.00
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