-----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, AmrVwkS4Xy97HrrywKaFrKrFuTObBc1uAxkUduzNK9nSVvVm8MSfWNcW/qo6yKb5 WSl3XJq/WaXn+B3Cf+w7Hw== 0000771856-99-000009.txt : 19991216 0000771856-99-000009.hdr.sgml : 19991216 ACCESSION NUMBER: 0000771856-99-000009 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991031 FILED AS OF DATE: 19991215 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: 99775111 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 QUARTERY REPORT FOR CHAMIPONS 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, 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 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, 1999 the Registrant had a total of 8,513,591 cares 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 October 31, 1999(unaudited) and April 30, 1999 3 Consolidated Statements of Operations: Three months and six months ended October 31, 1999, and October 31, 1998, (unaudited) 4 Consolidated Statements of Cash Flows: Six months ended October 31, 1999, and October 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 OCT 31, APRIL 30 1999 1999 (UNAUDITED) ASSETS Current assets Cash and cash equivalents $524,470 $726,241 Marketable securities 111,059 - Accounts receivable - trade 75,831 800 Inventories 25,042 20,176 Prepaid expenses 8,725 3,232 Deferred tax asset 207,952 207,952 ------- ------- Total current assets 953,079 958,401 Property and Equipment Furniture and Equipment 540,287 539,139 Leasehold improvements 570,962 570,962 ------- ------- 1,111,249 1,110,101 Accumulated depreciation and amortization (755,014) (729,420) -------- -------- 356,235 380,681 Other assets Deposits 11,052 11,052 Investments 100,000 - ------- ------ Total assets $1,420,366 $1,350,134 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $79,278 $36,817 Dividend payable on preferred stock 336,450 336,450 Notes payable 6,885 6,885 Other accrued expenses 32,947 38,023 Current portion of deferred lease concession 4,363 4,363 ----- ----- Total current liabilities 459,923 422,538 Deferred lease concession (excluding current portion) 18,463 20,281 Note payable, excluding current portion 17,465 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 October 31 and April 30, 1999 533,250 557,752 Common stock, par value $.001 per share, 50,000,000 shares authorized: 8,513,59 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 (4,951,561) (4,989,695) ---------- ---------- Total stockholders' equity 924,515 887,670 Total liabilities and stockholders' equity $1,420,366 $1,350,134 ========== ========== See notes to consolidated financial statements 3
CHAMPIONS SPORTS, INC. Consolidated Statement of Operations (Unaudited) Three months Six months ended October 31 ended October 31 1999 1998 1999 1998 ---- ---- ---- ---- Revenue Food and beverage sales $393,356 $409,568 $916,568 $867,080 Merchandise, memorabilia and consulting fees 85,818 10,641 190,544 94,225 Interest income 5,390 6,107 12,190 12,218 Other income 3,547 2,019 8,083 10,254 ----- ----- ----- ------ $488,112 $428,335 1,127,385 $983,777 Expense Cost of food and beverage sales 103,194 110,475 236,158 233,988 Cost of merchandise and memorabilia 22,367 6,318 60,770 31,004 Restaurant payroll and related costs 142,454 147,022 314,500 297,766 Restaurant occupancy costs 51,158 54,513 103,853 107,007 Other restaurant costs 77,477 98,367 173,323 189,354 General and administrative 57,959 87,615 174,557 164,301 Depreciation and amortization 12,105 13,567 24,325 27,134 Interest expense 846 - 1766 - ------ ------ ------ ------ 467,560 517,878 1,089,252 1,050,554 Net Income (loss) from operations $20,552 ($89,543) $38,133 ($66,776) Less preferred stock dividends $15,998 $16,800 $31,996 $33,600 ------- ------- ------- ------- Net income (loss) $4,554 ($106,343) $6,137 ($100,376) Basic earnings (loss) per share $0.00 ($0.01) $0.00 ($0.01) Earnings per common share - fully diluted $0.00 ($0.01) $0.00 ($0.01) ===== ====== ===== ====== 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 six months ended October 31, 1999 1998 ---- ---- Cash flows from operating activities: Net income $38,133 ($66,776) Adjustments to reconcile net income to cash provided by (used ) by operating activities: Depreciation and amortization 24,325 27,135 Changes in asset and liabilities Accounts receivable (75,031) (38) Inventories (4,866) 5,712 Prepaid expenses (5,493) (9,103) Accounts payable 42,461 9,047 Other accrued expenses (5,076) (25,718) Deferred lease concessions (1,837) (723) ------ ---- Net cash provided (used) by operating activities 12,616 (60,464) Cash flows from investing activities: Purchase of restricted securities (100,000) - Purchase of marketable investment securities (111,059) - Purchase of property and equipment (1,148) (2,884) ------ ------ Net cash provided by investing activities (212,207) (2,884) Cash flows from financing activities: Repayment of borrowings (2,180) - ------ Net cash provided(used)byfinancing activities (2,180) - Net increase(decrease)in cash and cash equivalents (201,771) (63,348) Cash and cash equivalents at beginning of year 726,241 631,230 ------- ------- Cash and cash equivalents at October 31, 524,470 567,882 ======= ======= Supplemental disclosure of cash flow information: Cash paid during the period for interest 1,766 - See notes to consolidated financial statements 5 CHAMPIONS SPORTS, INC. Notes to Consolidated Financial Statements October 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 October 31, 1999, the consolidated statements of operations for the three months and six months ended October 31, 1999 and October 31, 1998 and the consolidated statements of cash flows for the six months ended October 31, 1999 and October 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 October 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 October 31, 1999 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 involves risk and uncertainties. The Company's actual result could differ materially for those anticipated in there forward-looking statements as a result of unforseen 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 six months ended October 31, 1999, the Company's net income from operations was $38,133 before preferred stock dividends of $31,996 resulting in a net income of $6,137 or $0.00 per common share. For the six months ended October 31, 1998, the Company sustained a loss from operations of $66,776 before preferred stock dividends of $33,600 which resulted in a net loss of $100,376 or ($0.01) per common share. The Company's assets increased to $1,420,366 at October 31, 1999 from $1,350,134 at April 30, 1999 as a result of the net income for the six month period. Revenues The Company's total revenues increased 14.6% for the six month period and 14.0% for the three month period ended October 31, 1999. The Company's total revenues were$1,127,385 and $983,777 for the six months ended October 31, 1999 and 1998. By component, food and beverage sales increased 5.7% to $916,568 for the six months ended October 31, 1999 from $867,080 for the six months ended October 31, 1998. The increase in food and beverage sales is attributed to an increase in both customer volume and sales prices. For the three month period , food and beverage sales decreased 4.0% for the comparable period. The decrease in food and beverage sales is a result of a decline in customer volume during the quarter ended October 31, 1999. Merchandise and memorabilia sales for the six months ended October 31, 1999 were $190,544 compared to $94,225 in the comparable period. The Company provided sports memorabilia to two Marriott Champions locations during the six months ended October 31, 1999 and one Marriott Champions location during the six months ended October 31, 1998. Interest income and other income represent 1% or less of the Company's total revenues for the three months and six months ended October 31, 1999 and 1998. Expenses Cost of food and beverage decreased to 25.8% versus 27.0% of food and beverage sales of for the six months ended October 31, 1999 and 1998. Cost of merchandise and memorabilia sales was 31.9% and 32.9% of related sales for the six months ended October 31, 1999 and 1998. Restaurant payroll and related costs remained constant at 34.3% or food and beverage sales for the six months ended October 31, 1999 and 1998. Restaurant occupancy costs represented 11.3% and 12.3% of restaurant sales for the six month periods. Other restaurant costs decreased to 18.9% of food and beverage sales compared to 21.8% of related sales in the six months ended October 31, 1998. General and administrative expense for the Company's corporate office was 15.5% of the Company's total revenues for the six months ended October 31, 1999 compared to 16.7% for the six months ended October 31, 1998. Depreciation and amortization expense represented less than 3% of the Company's total revenues during each six month period. Liquidity and Capital Resources The Company's cash position on October 31, 1999 was $524,470 compared to $726,241 on April 30, 1999, a decrease of $201,771. For the six months ended October 31, 1999, the Company's operating activities provided $12,616 in cash. The Company used its cash to repay equipment leases for $2,180. The Company purchased marketable investment securities for $111,059 and restricted investment securities for $100,000. The Company purchased equipment for $1,148. For the six months ended October 31, 1998, the Company's operating activities used $60,464 in cash. The Company purchased $2,884 in property and equipment. During the six months ended October 31, 1999 7 and 1998, the Company met its cash needs from its revenues and cash reserves and from cash flow from its San Antonio operation. On October 31, 1999, the Company's working capital was $493,156 versus $535,863 on April 30, 1999. 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. Stockholder's equity increased to $924,515 as of October 31, 1999 compared to $887,670 as of April 30, 1999, as a result of the net income for the six month period. In October, 1999, the Board of Directors, in order to preserve the Company's cash reserves, voted to defer payment of $63,990, the annual dividend on the Series A, 12% convertible, cumulative Preferred Stock, par value $10, of which there were 53,325 shares outstanding at October 31, 1999. The Board of Directors also voted to defer the annual meeting of security holders in order to preserve the Company's cash reserves. 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. YEAR 2000 The Company has taken appropriate measures by purchasing software and computer equipment that is compliant with identifying the year 2000. The Company relies on outside vendors and financial institutions and all of whom have indicated to the Company that their computer systems are compliant for identifying the year 2000. . 8 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, 1999. 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 Controller and Chief Accounting Officer December 14, 1999 10 EX-27 2 FDS FOR THE SIX MONTHS ENDED OCT 31, 1999
5 6-mos APR-30-2000 JUL-31-1999 524,470 111,059 75,831 0 25,042 953,079 1,111,249 (755,014) 1,420,366 459,923 0 0 533,250 8,504 382,761 1,420,366 1,107,112 1,127,385 296,928 591,676 198,882 0 1,776 38,133 0 38,133 0 0 0 0 0.00 0.00
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