-----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, KwxP4Pp99n6g63WJ4s6DF1kdILgYo9gwKw9BZDoEMCAu9ijHz6Tu+3wEM6H7PPOh op5N3ZJY0Nd5wAZdZceRMA== /in/edgar/work/0000803003-00-000021/0000803003-00-000021.txt : 20001025 0000803003-00-000021.hdr.sgml : 20001025 ACCESSION NUMBER: 0000803003-00-000021 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000910 FILED AS OF DATE: 20001024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WINTER SPORTS INC /NEW CENTRAL INDEX KEY: 0000803003 STANDARD INDUSTRIAL CLASSIFICATION: [7990 ] IRS NUMBER: 810221770 STATE OF INCORPORATION: MT FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15030 FILM NUMBER: 744463 BUSINESS ADDRESS: STREET 1: P O BOX 1400 CITY: WHITEFISH STATE: MT ZIP: 59937 BUSINESS PHONE: 4068621900 MAIL ADDRESS: STREET 2: PO BOX 1400 CITY: WHITEFISH STATE: MT ZIP: 59937 10QSB 1 0001.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-QSB ( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 10, 2000 ( ) TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT FOR THE TRANSITION PERIOD FROM TO - ----- COMMISSION FILE NO. 0-15030 WINTER SPORTS, INC. (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER) MONTANA 81-0221770 (STATE OF INCORPORATION) (I.R.S. EMPLOYER I.D. NO.) P.O. BOX 1400, WHITEFISH, MONTANA 59937 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE (406) 862-1900 FORMER NAME, FORMER ADDRESS & FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO AS OF OCTOBER 13, 2000 THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON STOCK, NO PAR VALUE, WAS 1,005,268. TRANSITION SMALL BUSINESS DISCLOSURE FORMAT YES NO X WINTER SPORTS, INC. INDEX PAGE NO. PART I.FINANCIAL STATEMENTS CONDENSED CONSOLIDATED BALANCE SHEETS AT: SEPTEMBER 10, 2000(UNAUDITED) SEPTEMBER 12, 1999(UNAUDITED) MAY 31, 2000 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE PERIODS: JUNE 1, 2000 - SEPTEMBER 10, 2000(UNAUDITED) JUNE 1, 1999 - SEPTEMBER 12, 1999(UNAUDITED) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS: JUNE 1, 2000 - SEPTEMBER 10, 2000(UNAUDITED) JUNE 1, 1999 - SEPTEMBER 12, 1999(UNAUDITED) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES WINTER SPORTS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS 9/10/00 9/12/99 5/31/00 UNAUDITED UNAUDITED NOTE 2 ASSETS CURRENT ASSETS CASH AND CASH EQUIVALENTS $ 51,726 $226,818 $ 297,356 CERTIFICATES OF DEPOSIT 0 7,125 0 RECEIVABLES (NET OF RESERVE FOR BAD DEBTS OF $17,680, $23,803 AND $17,680, RESPECTIVELY) 151,652 124,980 85,895 RECEIVABLES - RELATED PARTIES 0 15,003 17,258 INCOME TAX REFUND RECEIVABLE 258,373 315,669 190,284 CURRENT DEFERRED TAX ASSET 27,320 24,516 27,320 INVENTORIES 412,541 424,003 406,876 PREPAID EXPENSES 66,840 90,022 223,708 TOTAL CURRENT ASSETS 968,452 1,228,136 1,248,697 PROPERTY AND EQUIPMENT PROPERTY AND EQUIPMENT, AT COST 24,317,602 23,693,175 24,350,639 ACCUMULATED DEPRECIATION AND AMORTIZATION (13,334,468) (12,006,310) (13,346,404) 10,983,134 11,686,865 11,004,235 CONSTRUCTION IN PROGRESS 1,856,929 1,101,936 564,681 LAND AND DEVELOPMENT COSTS 2,460,822 3,797,696 3,051,961 NET PROPERTY AND EQUIPMENT 15,300,885 16,586,497 14,620,877 OTHER ASSETS 208,925 414,020 209,824 TOTAL ASSETS $16,478,262 $18,228,653 $16,079,398 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES ACCOUNTS PAYABLE $ 250,650 $ 498,332 $ 844,126 ACCOUNTS PAYABLE - RELATED PARTIES 0 15,482 21,784 EMPLOYEE COMPENSATION AND RELATED EXPENSES 199,585 178,253 166,983 TAXES OTHER THAN PAYROLL AND INCOME 244,291 253,477 142,440 INTEREST PAYABLE 13,935 18,320 45,063 DEPOSITS AND OTHER UNEARNED INCOME 1,917,279 1,856,055 1,858,915 OTHER CURRENT LIABILITIES 28,716 9,172 15,338 TOTAL CURRENT LIABILITIES 2,654,456 2,829,091 3,094,649 LONG-TERM DEBT 2,966,319 6,304,245 1,996,319 DEFERRED INCOME TAXES 1,447,290 1,470,564 1,447,290 TOTAL LIABILITIES 7,068,065 10,603,900 6,538,258 STOCKHOLDERS' EQUITY COMMON STOCK (5,000,000 SHARES AUTHORIZED; NO PAR VALUE; 1,005,268, 1,008,368 AND 1,008,368 SHARES OUTSTANDING) 4,090,886 4,099,174 4,099,174 ADDITIONAL PAID-IN CAPITAL 0 20,519 20,519 RETAINED EARNINGS 5,319,311 3,505,060 5,421,447 TOTAL STOCKHOLDERS' EQUITY 9,410,197 7,624,753 9,541,140 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $16,478,262 $18,228,653 $16,079,398 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. WINTER SPORTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 6/ 1/00 6/ 1/99 TO TO 9/10/00 9/12/99 REVENUE LIFTS $ 228,117 $ 241,699 FOOD, BEVERAGE AND RETAIL 143,830 335,017 EQUIPMENT RENTAL AND REPAIR 22,434 20,754 LODGING 60,231 52,508 LEASE, MANAGEMENT AND OTHER FEES 275,382 369,085 LEASE, MANAGEMENT AND OTHER FEES - RELATED PARTIES 10,980 26,398 REAL ESTATE SALES 1,265,200 771,350 TOTAL REVENUE 2,006,174 1,816,811 OPERATING COSTS AND EXPENSES DIRECT EXPENSE - LIFTS 217,393 247,749 COST OF FOOD, BEVERAGE AND RETAIL 61,865 117,738 COST OF REAL ESTATE SALES 360,522 369,929 PAYROLL AND RELATED EXPENSES 613,673 582,803 DIRECT EXPENSES 418,529 486,025 MARKETING 196,014 254,490 DEPRECIATION AND AMORTIZATION 15,378 14,831 GENERAL AND ADMINISTRATIVE 237,731 234,233 GENERAL AND ADMINISTRATIVE - RELATED PARTIES 0 3,238 TOTAL OPERATING COSTS AND EXPENSES 2,121,105 2,311,036 OPERATING INCOME (LOSS) (114,931) (494,225) OTHER INCOME (EXPENSE) INTEREST INCOME 19,389 236 INTEREST EXPENSE (82,161) (126,444) OTHER INCOME (EXPENSE) 7,478 78,210 TOTAL OTHER INCOME (EXPENSE) (55,294) (47,998) INCOME (LOSS) BEFORE INCOME TAXES (170,225) (542,223) PROVISION FOR (RECOVERY OF) INCOME TAXES (68,089) (123,873) NET INCOME (LOSS) $ (102,136) $ (418,350) EARNINGS (LOSS) PER COMMON SHARE $ (0.10) $ (0.41) WEIGHTED AVERAGE SHARES OUTSTANDING 1,005,268 1,008,368 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. WINTER SPORTS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) 6/ 1/00 6/ 1/99 TO TO 9/10/00 9/12/99 NET CASH FLOW PROVIDED BY PROVIDED BY (USED IN) OPERATING ACTIVITIES: $ (319,847) $ 542,361 CASH FLOWS FROM INVESTING ACTIVITIES SALE OF ASSETS 6,621 0 PROPERTY AND EQUIPMENT ACQUISITIONS (873,597) (266,551) NET CASH (USED IN) INVESTING ACTIVITIES: (866,976) (266,551) CASH FLOWS FROM FINANCING ACTIVITIES: STOCK REPURCHASE PLAN (28,807) 0 PROCEEDS FROM DRAWS ON LONG-TERM REVOLVER 970,000 1,143,135 PRINCIPAL PAYMENTS ON LONG-TERM DEBT 0 (200,273) PRINCIPAL PAYMENTS ON LONG-TERM REVOLVER 0 (1,227,986) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES: 941,193 (285,124) NET (DECREASE) IN CASH AND CASH EQUIVALENTS (245,630) (9,314) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 297,356 236,132 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 51,726 $ 226,818 SUPPLEMENTAL DISCLOSURES OF CASH PAID YEAR TO DATE FOR: INTEREST (NET OF CAPITALIZED INTEREST) $ 74,609 $ 93,498 INCOME TAXES (NET OF REFUNDS) $ 0 $ 50 THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. WINTER SPORTS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION THE FINANCIAL STATEMENTS INCLUDED HEREIN ARE CONDENSED ACCORDING TO 10-QSB REPORTING REQUIREMENTS. THEY DO NOT CONTAIN ALL INFORMATION REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO BE INCLUDED IN A SET OF AUDITED FINANCIAL STATEMENTS. THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ARE PREPARED BY MANAGEMENT AND ARE UNAUDITED. ACCORDINGLY, THE FINANCIAL STATEMENTS SHOULD BE READ IN CONJUNCTION WITH THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED MAY 31, 2000. IN THE OPINION OF MANAGEMENT, THE ACCOMPANYING CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONTAIN ALL ADJUSTMENTS (CONSISTING OF NORMAL RECURRING ACCRUALS) NECESSARY FOR A FAIR PRESENTATION OF THE INTERIM PERIODS PRESENTED. CERTAIN AMOUNTS IN THE SEPTEMBER 12, 1999 FINANCIAL STATEMENTS HAVE BEEN RECLASSIFIED TO CONFORM TO THE SEPTEMBER 10, 2000 PRESENTATION. NOTE 2 - MAY 31, 2000 THE BALANCE SHEET AT MAY 31, 2000 HAS BEEN CONDENSED FROM THE AUDITED FINANCIAL STATEMENTS AT THAT DATE. NOTE 3 - SEASONAL NATURE OF OPERATIONS THE COMPANY'S OPERATIONS ARE HIGHLY SEASONAL IN NATURE. REVENUES, EARNINGS AND CASH FLOW ARE GENERATED PRINCIPALLY FROM THE WINTER OPERATIONS OF LIFTS AND RELATED FACILITIES. IT IS THE COMPANY'S PRACTICE TO RECOGNIZE SUBSTANTIALLY ALL OF THE YEAR'S DEPRECIATION EXPENSE IN THE THIRD AND FOURTH QUARTERS IN ORDER TO BETTER MATCH EXPENSES INCURRED IN GENERATING REVENUES DURING THE COMPANY'S MAIN PERIODS OF BUSINESS. THE COMPANY ALSO GENERATES REVENUES FROM THE SALE OF REAL ESTATE, WHICH IS ONGOING THROUGHOUT THE FISCAL YEAR. THEREFORE, THE RESULTS OF OPERATIONS FOR THE INTERIM PERIODS ENDED SEPTEMBER 10, 2000 AND SEPTEMBER 12, 1999 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED FOR THE FULL YEAR. NOTE 4 - LEGAL PROCEEDINGS AND CONTINGENCIES FROM TIME TO TIME, THE COMPANY HAS BEEN A DEFENDANT IN UNRELATED LAWSUITS FILED BY INDIVIDUALS WHO ARE EACH SEEKING DAMAGES OF SPECIFIED AMOUNTS, FOR ALLEGED PERSONAL INJURIES RESULTING FROM ACCIDENTS OCCURRING ON THE COMPANY'S PROPERTY OR WHILE SKIING. THE COMPANY'S INSURANCE CARRIER PROVIDES DEFENSE AND COVERAGE FOR THESE CLAIMS AND THE COMPANY'S PARTICIPATION HAS BEEN LIMITED TO ITS POLICY DEDUCTIBLE. SUCH AMOUNTS ARE CHARGED TO GENERAL AND ADMINISTRATIVE EXPENSE UPON SETTLEMENT. NOTE 5 - NOTES PAYABLE THE COMPANY CURRENTLY HAS A LOAN AGREEMENT WITH BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, DOING BUSINESS AS SEAFIRST BANK (SEAFIRST). THE AGREEMENT PROVIDES FOR A $9,750,000 REVOLVING REDUCING LINE OF CREDIT, WHICH MATURES ON JUNE 1, 2008. THE AGREEMENT CONTAINS COVENANTS THAT REQUIRE MINIMUM NET WORTH, A FIXED CHARGE COVERAGE RATIO AND RESTRICTS INVESTMENT, DISPOSITION OF ASSETS, CAPITAL EXPENDITURES, OUTSIDE BORROWING AND PAYMENT OF DIVIDENDS. EACH JUNE 1, THE AMOUNT AVAILABLE UNDER THE LINE REDUCES BY $750,000. AT SEPTEMBER 10, 2000 $5,283,681 WAS UNUSED OF THE $8,250,000 AVAILABLE UNDER THE INSTRUMENT. AT SEPTEMBER 12, 1999 $3,478,000 WAS UNUSED OF THE $9,000,000 AVAILABLE UNDER THE INSTRUMENT. THE LOAN BEARS INTEREST AT OR BELOW SEAFIRST'S PRIME RATE. THE COMPANY ALSO HAD A TERM LOAN AGREEMENT WITH WHITEFISH CREDIT UNION FOR FINANCING OF THE CONSTRUCTION OF A MIXED-USE CONDOMINIUM PROJECT. AT SEPTEMBER 12, 1999, THE BALANCE OF THE TERM LOAN WAS $782,253. DURING FISCAL YEAR ENDING MAY 31, 2000, THE LOAN WAS PAID IN FULL. NOTE 7 - BUSINESS SEGMENT INFORMATION THE COMPANY OPERATES PRINCIPALLY IN TWO INDUSTRIES: THE OPERATION OF A SKI AREA AND THE SALE OF REAL ESTATE. FINANCIAL INFORMATION BY INDUSTRY SEGMENT FOR THE FIRST QUARTERS OF 2000 AND 1999 ARE SUMMARIZED AS FOLLOWS: SKI AREA REAL ESTATE CONSOLIDATED QUARTER ENDED 9/10/00 TOTAL REVENUE $ 690,793 $ 1,315,381 $ 2,006,174 OPERATING PROFIT (LOSS) $ (975,527) $ 860,596 $ (114,931) DEPRECIATION AND AMORTIZATION $ 8,612 $ 6,766 $ 15,378 IDENTIFIABLE ASSETS $ 12,298,828 $ 4,179,434 $ 16,478,262 CAPITAL EXPENDITURES $ 873,597 $ 0 $ 873,597 QUARTER ENDED 9/12/99 TOTAL REVENUE $ 996,061 $ 820,750 $ 1,816,811 OPERATING PROFIT (LOSS) $ (854,873) $ 360,648 $ (494,225) DEPRECIATION AND AMORTIZATION $ 8,548 6,283 $ 14,831 IDENTIFIABLE ASSETS $ 14,210,960 $4,017,693 $ 18,228,653 CAPITAL EXPENDITURES $ 266,551 $ 0 $ 266,551 WINTER SPORTS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE PERIOD 6/ 1/00 6/ 1/99 TO TO 9/10/00 9/12/99 GROSS REVENUES $ 2,006,174 $ 1,816,811 NET LOSS $ (102,136) $ (418,350) LOSS PER COMMON SHARE $ (0.10) $ (0.41) TOTAL ASSETS $16,478,262 $18,228,653 LONG-TERM DEBT LESS CURRENT PORTION $ 2,966,319 $ 6,304,245 RESULTS OF OPERATIONS, FIRST QUARTER AND YEAR TO DATE REVENUES TOTAL REVENUES FOR THE FIRST QUARTER THAT ENDED SEPTEMBER 10, 2000 WERE $2,006,174, AN INCREASE OF $189,363 OR 10.4% FROM THE QUARTER THAT ENDED SEPTEMBER 12, 1999. THE INCREASE WAS PRIMARILY DUE TO AN INCREASE IN REAL ESTATE SALES OF $493,850 OR 64% IN THE FIRST QUARTER OF THE CURRENT YEAR COMPARED WITH SALES IN THE FIRST QUARTER OF THE PRIOR YEAR. MANAGEMENT EXPECTS REAL ESTATE SALES TO CONTINUE THROUGHOUT THE REST OF THE FISCAL YEAR. SKI AREA REVENUE DECREASED FROM THE SAME QUARTER LAST YEAR DUE TO DECREASES IN LIFT REVENUE AND LESSEE REVENUE DUE TO THE PERCEIVED FIRE DANGER EXPERIENCED IN MONTANA DURING THE LATTER PART OF THE SUMMER SEASON. THE EFFECT OF THIS PERCEIVED DANGER RESULTED IN A DECREASE OF REVENUE OF 29% FROM THE FIRST QUARTER OF THE PREVIOUS YEAR. OPERATING EXPENSES TOTAL OPERATING COSTS AND EXPENSES IN THE QUARTER ENDED SEPTEMBER 10, 2000 DECREASED BY $189,931 FROM THE SAME QUARTER LAST YEAR. THE DECREASE IS DUE TO DECREASES IN MARKETING AND THE COST OF FOOD, BEVERAGE & RETAIL. THE DECREASE IN THE COST OF FOOD, BEVERAGE & RETAIL IS DUE TO THE FOOD AND BEVERAGE OPERATIONS BEING OPERATED UNDER A MANAGEMENT AGREEMENT DURING THIS QUARTER COMPARED TO BEING OPERATED BY THE COMPANY DURING THE FIRST QUARTER OF LAST YEAR. OTHER EXPENSES INTEREST EXPENSE FOR THE QUARTER ENDED SEPTEMBER 10, 2000 WAS $82,161, A DECREASE OF $44,283 OR 35% LOWER THAN THE FIRST QUARTER LAST YEAR. INTEREST EXPENSE DECREASED DUE TO LOWER DEBT LEVELS ON THE COMPANY'S OPERATING LINE OF CREDIT AND THE REPAYMENT OF THE LOAN WITH WHITEFISH CREDIT UNION DURING THE FISCAL YEAR ENDING MAY 31, 2000. LIQUIDITY AND CAPITAL RESOURCES WORKING CAPITAL AT THE END OF THE QUARTER WAS $(1,686,004) WHICH IS A DECREASE OVER THE PRIOR YEAR'S $(1,600,955). THE DECREASE IS PRIMARILY DUE TO THE DECREASE IN CASH AND AN INCREASE IN DEPOSIT AND OTHER UNEARNED INCOME DURING THE QUARTER ENDED SEPTEMBER 10, 2000. TOTAL LIABILITIES OF $7,068,065 REPRESENT 75% OF STOCKHOLDERS' EQUITY AT SEPTEMBER 10, 2000, DOWN FROM $10,603,900 OR 139% OF STOCKHOLDERS' EQUITY AT SEPTEMBER 12, 1999. THE COMPANY'S BOARD OF DIRECTORS AUTHORIZED A STOCK REPURCHASE PROGRAM ON MAY 19, 2000. UNDER THIS PROGRAM THE COMPANY COULD REPURCHASE UP TO 40,000 SHARES OF THE COMPANY'S OUTSTANDING COMMON STOCK AT PREVAILING MARKET PRICES FROM TIME TO TIME OVER THE NEXT SIX TO EIGHT MONTHS. AS OF OCTOBER 13, 2000 THE COMPANY HAD REPURCHASED 3,100 SHARES UNDER THIS PROGRAM. MANAGEMENT CONTINUALLY EVALUATES THE COMPANY'S CASH AND FINANCING REQUIREMENTS. OVER THE YEARS, THE COMPANY HAS OBTAINED FAVORABLE FINANCING FROM FINANCIAL INSTITUTIONS WHEN NECESSARY TO FUND OFF-SEASON REQUIREMENTS AND CAPITAL ACQUISITIONS. THE COMPANY HAS A REVOLVING, REDUCING CREDIT AGREEMENT THAT PROVIDES FINANCIAL RESOURCES ALLOWING THE COMPANY TO MEET SHORT-TERM OPERATING NEEDS AND FUND CAPITAL EXPENDITURES. THE $9.75 MILLION AGREEMENT REDUCES AVAILABLE CAPACITY BY $750,000 EACH JUNE 1. AT SEPTEMBER 10, 2000, $2,966,319 WAS OUTSTANDING WITH $5,783,681 OF UNUSED CAPACITY ON THE $8,250,000 LINE OF CREDIT. FORWARD-LOOKING STATEMENTS THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING MATTERS THAT ARE SUBJECT TO RISKS AND UNCERTAINTIES. FOR SUCH STATEMENTS, THE COMPANY CLAIMS THE PROTECTION OF THE SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS CONTAINED IN SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN EACH FORWARD-LOOKING STATEMENT DUE TO VARIOUS FACTORS THAT ARE OUTSIDE THE COMPANY'S CONTROL. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS REFERENCE IS MADE TO NOTE 4 OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF THIS FORM 10-QSB, WHICH IS INCORPORATED HEREIN BY REFERENCE. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS AT THE REGULAR ANNUAL MEETING OF SHAREHOLDERS HELD ON OCTOBER 17, 2000, THE SHAREHOLDERS RE-ELECTED 9 CURRENT DIRECTORS TO ONE YEAR TERMS. WHEN VOTING FOR DIRECTORS, SHAREHOLDERS ARE ENTITLED TO CAST 9 VOTES FOR EACH SHARE OF COMMON STOCK HELD WITH CUMULATIVE VOTING ALLOWED. THE SHAREHOLDERS ALSO VOTED TO RATIFY JORDAHL & SLITER, PLLC AS INDEPENDENT AUDITORS. THE TABLES BELOW SUMMARIZE THE VOTING RESULTS: ELECTION OF DIRECTORS VOTES FOR VOTES WITHHELD CHARLES R. ABELL 1,206,225 26,990 JEROME T. BROUSSARD 692,091 147,985 BRIAN T. GRATTAN 695,725 85,010 CHARLES P. GRENIER 826,291 72,610 DENNIS L. GREEN 695,249 145,179 JERRY J. JAMES 696,971 84,353 MICHAEL T. JENSON 834,600 69,918 DARREL R. MARTIN 828,988 71,671 MICHAEL J. MULDOWN 1,066,773 42,979 RATIFICATION OF AUDITORS SHARES VOTED FOR 816,369 SHARES VOTED AGAINST 379 SHARES ABSTAINING 23,309 ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBIT 10-9 EMPLOYMENT AGREEMENT BETWEEN MICHAEL COLLINS AND WINTER SPORTS, INC. DATED SEPTEMBER 1,2000. 3.2 BY-LAWS 9TH AMENDMENT TO THE AMENDED BYLAWS. NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED SEPTEMBER 10, 2000. WINTER SPORTS, INC. FORM 10-QSB SIGNATURES IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. WINTER SPORTS, INC. (REGISTRANT) DATE: OCTOBER 23, 2000 /S/MICHAEL J. COLLINS MICHAEL J. COLLINS PRESIDENT & CHIEF EXECUTIVE OFFICER (PRINCIPAL EXECUTIVE OFFICER) DATE: OCTOBER 23, 2000 /S/JAMI M. PHILLIPS JAMI M. PHILLIPS CHIEF FINANCIAL OFFICER (PRINCIPAL ACCOUNTING OFFICER) EX-27 2 0002.txt EX-27
5 This schedule contains summary financial information extracted from 10-QSB dated 9/10/2000 and is qualified in its entirety by reference to such 10-QSB. 3-MOS MAY-31-2001 SEP-10-2000 51,726 0 169,332 17,680 412,541 968,452 28,635,353 13,334,468 16,478,262 2,654,456 2,966,319 0 0 4,090,886 5,319,311 16,478,262 143,830 2,006,174 61,865 2,121,105 0 0 82,161 (170,225) (68,089) (102,136) 0 0 0 (102,136) (.10) (.10)
EX-99 3 0003.txt NINTH AMENDMENT TO THE AMENDED BY-LAWS OF WINTER SPORTS, INC. Article II, Section 1, is hereby amended to read as follows: Section 1. Annual Meeting. The annual meeting of the shareholders of the Corporation shall be held at the principal office of the Corporation, Big Mountain, Whitefish, Montana, or at such other place within the Whitefish, Montana, area, as shall be designated by the Board of Directors from time to time. The meeting shall be held on the second Tuesday of October of each year at 5:45 p.m., or on such other date and at such other time as shall be designated by the Board of Directors from time to time. If the date fixed for the annual meeting shall be a legal holiday in the State of Montana, such meeting shall be held on the next succeeding business day. This meeting shall be for the election of directors and for the transaction of such other business as may properly come before the meeting. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be, subject to the notice provisions of the statutes of the State of Montana applicable thereto. Nominations for election to the Board of Directors may be made by the Board of Directors or by a Nominating Committee appointed by the Board of Directors for that purpose, or by any shareholder of common stock of the Corporation entitled to vote for the election of Directors. Nominations, other than those made by or on behalf of the Board of Directors, either by the Board of Directors or by the Nominating Committee appointed by the Board of Directors, shall be made in writing and shall be delivered or mailed to the President of the Corporation, not less than fifteen (15) days nor more than fifty (50) days prior to any meeting of shareholders called for the election of Directors; provided however, that if less than twenty (20) days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Corporation not later than the close of business on the fifth day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of such nominee; (c) the name and resident address of the notifying shareholder, and (d) the number of shares of common stock of the Corporation owned by the notifying shareholder. Nominations not made in accordance herewith may, in his discretion, be disregarded by the Chairman of the meeting, and upon his instructions, the vote tellers may disregard all votes cast for each such nominee. This provision does not prohibit nor prevent write- in votes by stockholders entitled to vote at the election of directors for candidates of their choice. This amendment was adopted by the Board of Directors of Winter Sports, Inc. at a Director's meeting held the 29th day of August, 2000. /s/ Sandra K. Unger, Secretary Attest: /s/ Michael J. Collins, President EX-99 4 0004.txt EMPLOYMENT AGREEMENT This Agreement made this 1st day of September, 2000, by and between WINTER SPORTS, INC., a Montana corporation, with its principal place of business located in Whitefish, Montana (`Employer'') and MICHAEL COLLINS, of Whitefish, Montana (`Employee''). 1. Employment. The Employer employs the Employee and the Employee accepts employment upon the terms and conditions of this Agreement. 2. Term. The term of this Agreement shall begin on August 1, 2000 and shall terminate on July 31, 2004, unless sooner terminated as provided herein (see paragraphs 12 and 13). 3. Compensation. the Employer shall pay the Employee the following annual salary, payable in equal installments every two weeks: August 1, 2000 through July, 2001 - $106,655.00 Effective August 1, 2001, and again on August 1 of each succeeding year of this Agreement, the above salary shall be adjusted upward by an amount equal to five percent (5%) of the preceding year's salary, provided that each annual adjustment to salary shall be contingent upon the Employer meeting or exceeding its combined budgeted net income before taxes for the preceding fiscal year. If the budget criteria have not been met, there shall be no increase in salary for the applicable year. In addition, the Employee shall be entitled to provisions of the Cash Bonus Program as set forth in Section 10 of this Agreement. Employee shall be entitled to such other benefits as are made available to other employees of Employer that are not specifically addressed in this Agreement. 4. Duties. The Employee shall serve the Employer as President and Chief Executive Officer. These duties shall include, without limitation, the general management and supervision of all Employer's activities and endeavors, increasing the Employer's market share and number of skier visits, implementing the Employer's expansion program(s), supervise the development of the base area real estate, increasing non-skier business and revenues, seeking improved financing arrangements, and such other duties as may from time to time be assigned by the Employer. 5. Extent of Duties. The Employee shall devote his entire time and attention to the Employer's business, unless otherwise agreed to by the Employer and Employee. 6. Working Environment, Automobile, etc. The Employee shall have a private office, secretarial help, Employer-provided automobile and other facilities and services that are suitable to his position and appropriate for the performance of his duties. 7. Disclosure of Information. The Employee acknowledges that the Employer's business dealings are a valuable, special and unique asset of the Employer's business. The Employee shall not, during and after the term of his employment, disclose all or any part of the information to which he becomes privileged regarding the Employer's business. In the event of termination of this Agreement for any reason or by any party, Employee will immediately deliver to Employer all copies of all of Employer's records, including records on paper, electronic media and any other form of information storage device. 8. Expenses. The Employee may incur reasonable expenses for promoting the Employer's business, including expenses for entertainment, travel and similar items. The Employer will reimburse the Employee for all such expenses upon the Employee's periodic presentation of an itemized account of such expenditures. 9. Vacations. The Employee shall be entitled each year to a vacation of four weeks during which time his compensation shall be paid in full. 10. Bonus. during each year of this Agreement, the Employee shall receive a cash bonus based on the following formula: .03 x Winter Sports, Inc. net income before taxes, plus .009 x Big Mountain Development Corporation net income before taxes The bonus shall be based on the corporations' fiscal year end figures, which concludes on May 31. The net income before taxes for Winter Sports, Inc. must exceed $400,000 each fiscal year for a bonus to be paid that year. The net income before taxes for Big Mountain Development Corporation must exceed $200,000 each fiscal year for a bonus to be paid that year. If either corporation has a negative net income before taxes any fiscal year, the negative income figure shall be multiplied by the above factor and the resulting figure shall be deducted from the bonus payable (if any) from the other corporation in order to determine the net amount of bonus payable to the Employee. A negative net bonus figure shall mean that no bonus is payable to the Employee for that fiscal year. Year-end income figures are usually known in August of each year, and the parties anticipate that an earned bonus may be paid in August of each year. The fiscal year that ends on May 31, 1997 was the first year when a bonus was calculated pursuant to this Agreement. An illustration of the bonus calculations based on past performance is shown on Exhibit A to this Agreement. 11. Annual Review. The Employee's performance pursuant to the terms of this Agreement shall be reviewed each year by duly appointed members of the Employer's Board of Directors, and the Employer's action plans for the period under review shall be the basis on which the evaluation is conducted. 12. Termination with Cause. The Employer may terminate this Agreement with cause at any time by giving thirty (30) days written notice to the Employee. In the event of such termination the Employee shall receive six (6) month's salary. Just cause shall be defined to include any reason which the Employer believes will be in its best business interest (e.g. failing to meet budget projections for two consecutive fiscal years, etc.) or due to any conduct of the Employee which the Employer believes may bring discredit upon himself or the Employer, such as unethical or illegal activities. If termination is the result of unethical or illegal activities the Board of Directors shall not be bound to pay the six (6) month's termination salary referred to above. Notwithstanding any other provision of this Agreement, in the event the Employer fails to meet budgeted goals for two consecutive fiscal years during the term of this Agreement, the Employer may reopen this Agreement for the purpose of re- negotiating the terms hereof or terminating it pursuant to this paragraph. 13. Termination by Employee. The Employee may terminate this Agreement with 30-day notice to the Chairman of the Board of Directors or his designate. 14. Death During Employment. If the Employee dies during the term of employment, the Employer shall pay to the Employee's estate the compensation that otherwise would be payable to the Employee up to the end of the month in which his death occurs. 15. Arbitration. Any controversy or claim arising out of, or relating to this Agreement, or its breach, shall, at the option of the Employer, be settled by arbitration in the City of Whitefish, Montana, in accordance with the then governing rules of the American Arbitration Association. The prevailing party shall be entitled to its reasonable costs and attorneys' fees. Judgment upon the award rendered may be entered and enforced in any court of competent jurisdiction. 16. Notices. Any notice required or desired to be given under this Agreement shall be deemed given if in writing sent by certified mail to the Employee's residence or to the Employer's principal office, as the case may be. 17. Waiver of Breach. The Employer's waiver of a breach of any provision of this Agreement by the Employee shall not operate or be construed as a waiver of any subsequent breach by the Employee. No waiver shall be valid unless in writing and signed by an authorized officer of Employer. 18. Assignment. The Employee acknowledges that his services are unique and personal. Accordingly, the Employee may not assign his rights or delegate his duties or obligations under this Agreement. The Employer's rights and obligations under this Agreement shall inure to the benefit of and shall be binding upon the Employer's successors and assigns. 19. Entire Agreement. This Agreement contains the entire understanding of the parties. It may not be changed orally, but only by an agreement in writing signed by the party against whom the enforcement of any waiver, changed, modification, extension, or discharge is sought. IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. WINTER SPORTS, INC. /s/ Dennis L. Green, Chairman Attest: /s/ Darrel Martin, Vice Chairman /s/ Michael Collins -----END PRIVACY-ENHANCED MESSAGE-----