-----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, RhgOtmI5iX8MpCDKSzI8PZuQCbi/g+mVhi103V4pRv3RzfoQwqcNmHgj+oOE9E1T YYnqRZI+9k+RkC0pEu5dJA== 0000798935-95-000020.txt : 19951214 0000798935-95-000020.hdr.sgml : 19951214 ACCESSION NUMBER: 0000798935-95-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19951213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVEL PORTS OF AMERICA INC CENTRAL INDEX KEY: 0000798935 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 161128554 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14998 FILM NUMBER: 95601182 BUSINESS ADDRESS: STREET 1: 3495 WINTON PL BLDG C CITY: ROCHESTER STATE: NY ZIP: 14623 BUSINESS PHONE: 7162721810 MAIL ADDRESS: STREET 2: 3495 WINSTON PLACE BUILDING C CITY: ROCHESTER STATE: NY ZIP: 14623 FORMER COMPANY: FORMER CONFORMED NAME: ROADWAY MOTOR PLAZAS INC DATE OF NAME CHANGE: 19911219 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended October 31, 1995 Commission File Number 33-7870-NY Travel Ports of America, Inc. New York 16-1128554 3495 Winton Place, Building C, Rochester, New York 14623 716-272-1810 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. [ X ] Yes [ ] No Class Outstanding at October 31, 1995 Common Stock, Par Value $.01 Per Share 5,236,924 TRAVEL PORTS OF AMERICA, INC. INDEX Page PART I Financial Information Balance Sheets, October 31, 1995 (unaudited) and April 30, 1995.............................. 3 Statement of Income (unaudited), quarter ended October 31, 1995 and 1994................... 4 Statement of Cash Flows (unaudited), three months ended October 31, 1995 and 1994............. 5 Notes to Financial Information.................... 6 Management's Discussion and Analysis of Financial Condition and Results of Operations............. 7 PART II Other Information Index to Exhibits and Legal Proceedings........... 10 Signatures.......................................... 14 TRAVEL PORTS OF AMERICA, INC. BALANCE SHEET (UNAUDITED) 10/31/95 4/30/95 ASSETS CURRENT ASSETS: CASH AND EQUIVALENTS $ 2,236,368 $ 7,593,798 ACCOUNTS RECEIVABLE, LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS OF $213,186 AT OCTOBER 1995 AND $214,052 AT APRIL 1995 4,131,346 3,683,235 NOTES RECEIVABLE 48,898 332,655 INVENTORIES 5,781,883 5,790,823 PREPAID AND OTHER CURRENT ASSETS 882,237 532,904 DEFERRED TAXES - CURRENT 381,900 381,900 TOTAL CURRENT ASSETS 13,462,632 18,315,315 NOTES RECEIVABLE, DUE AFTER ONE YEAR 2,097,155 1,390,600 PROPERTY, PLANT AND EQUIPMENT, NET 30,510,157 27,052,462 COST IN EXCESS OF UNDERLYING NET ASSET VALUE OF ACQUIRED COMPANIES 2,000,591 2,032,686 OTHER ASSETS, NET 2,468,593 2,579,747 $50,539,128 $51,370,810 LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES: CURRENT PORTION OF LONG-TERM DEBT $ 2,384,674 $ 2,360,015 ACCOUNTS PAYABLE 6,000,474 6,897,323 ACCOUNTS PAYABLE - AFFILIATE 637,919 597,100 INCOME TAXES PAYABLE 90,055 ACCRUED COMPENSATION 843,454 1,335,305 ACCRUED SALES AND FUEL TAX 1,589,288 1,047,649 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 908,998 1,057,679 TOTAL CURRENT LIABILITIES 12,454,862 13,295,071 LONG TERM DEBT 19,073,914 20,328,957 CONVERTIBLE SUBORDINATED DEBENTURES 4,650,000 4,650,000 DEFERRED INCOME TAXES 747,200 747,200 TOTAL LIABILITIES 36,925,976 39,021,228 SHAREHOLDERS EQUITY COMMON STOCK, $.01 PAR VALUE AUTHORIZED - 10,000,000 SHARES, ISSUED AND OUTSTANDING AT OCTOBER 1995 - 5,236,924 AND APRIL 1995 - 5,209,924 52,369 52,099 ADDITIONAL PAID-IN CAPITAL 3,809,411 3,767,741 RETAINED EARNINGS 9,751,372 8,529,742 TOTAL SHAREHOLDERS EQUITY 13,613,152 12,349,582 $50,539,128 $51,370,810 TRAVEL PORTS OF AMERICA, INC. STATEMENT OF INCOME (UNAUDITED) QUARTER ENDED SIX MONTHS ENDED OCTOBER 31 OCTOBER 31 1995 1994 1995 1994 NET SALES AND OPERATING REVENUE $39,619,638 $39,075,621 $77,746,306 $77,251,347 COST OF GOODS SOLD 29,855,321 28,982,789 58,251,951 57,380,188 GROSS PROFIT 9,764,317 10,092,832 19,494,355 19,871,159 OPERATING EXPENSE 7,307,127 7,462,708 14,604,285 14,990,124 GENERAL AND ADMINISTRATIVE EXPENSE 891,828 912,716 1,865,663 1,773,288 INTEREST EXPENSE 610,460 522,274 1,287,659 998,970 OTHER INCOME, NET (93,661) (21,777) (392,782) (61,584) 8,715,754 8,875,921 17,364,825 17,700,798 INCOME BEFORE TAXES 1,048,563 1,216,911 2,129,530 2,170,361 PROVISION FOR TAXES ON INCOME 447,200 502,800 907,900 895,000 NET INCOME $ 601,363 $ 714,111 $ 1,221,630 $ 1,275,361 PER SHARE DATA: NET INCOME PER SHARE - PRIMARY $0.11 $0.14 $0.23 $0.24 NET INCOME PER SHARE - FULLY DILUTED $0.09 $0.14 $0.19 $0.24 WEIGHTED AVERAGE SHARES OUTSTANDING - PRIMARY 5,439,066 5,271,111 5,399,919 5,275,741 WEIGHTED AVERAGE SHARES OUTSTANDING - FULLY DILUTED 6,991,823 5,745,232 5,299,342 5,303,489 TRAVEL PORTS OF AMERICA, INC. STATEMENT OF CASH FLOWS (UNAUDITED) SIX MONTHS ENDED OCTOBER 31 1995 1994 OPERATING ACTIVITIES: NET INCOME $1,221,630 1,275,361 DEPRECIATION AND AMORTIZATION 1,299,342 1,216,607 PROVISION FOR LOSSES ON ACCOUNT RECEIVABLE 34,118 60,091 (GAIN) LOSS ON SALE OF ASSETS (193,880) 27,974 CHANGES IN OPERATING ASSETS AND LIABILITIES - ACCOUNTS RECEIVABLE (482,229) (412,674) INVENTORIES 8,940 (505,738) PREPAID AND OTHER CURRENT ASSETS (347,959) (112,523) ACCOUNTS PAYABLE (856,030) (64,973) ACCRUED COMPENSATION (491,851) (48,716) ACCRUED SALES AND FUEL TAX 541,639 (248,660) ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (148,681) 21,534 CHANGES IN INCOME TAXES PAYABLE 90,055 655,987 CHANGES IN OTHER NON-CURRENT ASSETS 29,220 61,678 NET CASH PROVIDED BY OPERATING ACTIVITIES 704,314 1,925,948 INVESTING ACTIVITIES: EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT (5,319,963) (1,168,022) PROCEEDS FROM DISPOSITION OF PROPERTY, PLANT AND EQUIPMENT 269,461 94,997 NET PROCEEDS RECEIVED ON NOTES RECEIVABLE 177,202 40,139 NET CASH USED IN INVESTING ACTIVITIES (4,873,300) (1,032,886) FINANCING ACTIVITIES: NET SHORT-TERM PAYMENTS (1,752,000) PRINCIPAL PAYMENTS ON LONG-TERM DEBT (1,230,384) (6,861,310) PROCEEDS FROM LONG-TERM BORROWING 10,500,000 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 41,940 40,020 NET CASH (USED) PROVIDED IN FINANCING ACTIVITIES (1,188,444) 1,926,710 NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS (5,357,430) 2,819,772 CASH AND EQUIVALENTS - BEGINNING OF PERIOD 7,593,798 1,177,400 CASH AND EQUIVALENTS - END OF PERIOD $2,236,368 $3,997,172 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION CASH PAID DURING THE PERIOD: INTEREST PAID $1,283,090 $ 884,766 INCOME TAXES PAID $ 764,326 $ 231,800 TRAVEL PORTS OF AMERICA, INC. NOTES TO FINANCIAL INFORMATION OCTOBER 31, 1995 NOTE 1 BASIS OF PRESENTATION The unaudited financial information has been prepared in accordance with the Summary of Accounting Policies of the Company as outlined in Form 10-K filed for the year ended April 30, 1995, and should be read in conjunction with the Notes to Financial Statements appearing therein. In the opinion of management, the unaudited financial information contains all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's financial position as of October 31, 1995 and April 30, 1995, and for the three months and six months ended October 31, 1995 and 1994. The financial information is based in part on estimates and has not been audited by independent accountants. The annual statements will be audited by Price Waterhouse LLP. NOTE 2 INVENTORIES Major classifications of inventories are as follows: October 31, 1995 April 30,1995 At first-in, first-out (FIFO) cost: Petroleum Products $1,488,794 $1,467,754 Store Merchandise 1,840,740 1,708,595 Parts for repairs and tires 2,113,934 2,138,790 Other 338,415 475,684 $5,781,883 $5,790,823 NOTE 3 EARNINGS PER SHARE Primary earnings per share is computed by dividing net income by the weighted average number of common, and when applicable, common equivalent shares outstanding during the period. Fully diluted earnings per share include the dilutive impact of common equivalent shares and the convertible debentures. NOTE 4 FINANCING AGREEMENTS The Companys primary lending institution has renewed its commitment for the Companys existing line of credit until August 31, 1996. The line of credit is limited to the lesser of $2,750,000 or the sum of 80% of the Companys accounts receivable under 90 days old, plus 45% of the Companys inventory. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: Second Quarter ended October 31, 1995 and 1994 Sales from operations were $39,619,638 for the second quarter of fiscal 1996, up $544,017, or 1.4%, from the second quarter of last year. In comparing to last year, this year we did not have the facility in Fairplay, South Carolina and a small restaurant in Phelps, New York. The impact from the disposition of these two locations was a $880,000 reduction in sales as compared to the second quarter of 1995. In addition a customer, who previously purchased diesel fuel directly from the Company, is now storing its own fuel at certain of the Companys facilities and is charged a pumping fee. There is no impact on gross profit but sales declined $335,000. After accounting for the change in locations and the diesel sales to this customer, the increase in sales for same units was almost $1,759,000 or 4.7%. Gross profit for the second quarter was $9,764,317, a decrease of $328,515, or 3.2%, from the prior year. The two locations we no longer have accounted for $299,000 of this decline. Operating expenses of $7,307,127 for the second quarter were $155,581 or 2.1% less than last year. Increases in utilities, advertising and depreciation offset the decrease of $261,000 from the two locations we no longer have. General and administrative expenses for the quarter of $891,828 decreased $20,828 or 2.2% from last year. Other income increased $72,000 from last year, primarily as a result of greater interest income from notes receivable and invested cash. Interest expense increased from last year by $88,186 as a result of the higher prime rate and increased level of debt as compared to October 1994. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES The Companys cash position decreased by $5,537,430 to $2,236,368 during the six months ended October 31, 1995. Accounts receivable increased $482,229 from greater sales activity. Accounts payable decreased $856,030 as a result of payments on capital expenditures. Accrued compensation decreased $491,851 due to the payment of bonuses. Accrued sales and fuel taxes increased $541,639 due to amount and timing of tax payments. Overall operating activities for the six months ended October 31, 1995, provided $704,314 in cash compared to last year's $1,914,289. Investing activities resulted in a net use of $4,873,300. Capital expenditures during the first six months of 1996 were $5,319,963. The renovation projects and the construction of a travel plaza on land owned by the Company in Harborcreek, Pennsylvania accounted for these expenditures. The construction of the Harborcreek facility has been funded to date from operations and the existing cash position. The Company is working with its primary lender on interim and permanent financing of the project. Proceeds from notes receivable provided cash of $177,202 and $269,461 was received from the sale of properties and equipment. Financing activities for the first six months of 1996 resulted in a net use of $1,188,444 for principal repayment. Last year a refinancing provided $1,926,710 after repayment of principal. The Companys primary lending institution has renewed its commitment for the Companys existing line of credit until August 31, 1996. The line of credit is limited to the lesser of $2,750,000 or the sum of 80% of the Companys accounts receivable under 90 days old, plus 45% of the Companys inventory. As of October 31, 1995, the Company has utilized $200,000 of its available line of credit as collateral for various letters of credit. Authorized, but unissued stock is available for financing needs; however, there are no current plans to use this source. TRAVEL PORTS OF AMERICA, INC. PART II -- OTHER INFORMATION Item 1. LEGAL PROCEEDINGS United Petroleum Marketing Inc. and United Petroleum Realty Corp., a petroleum retailer and real estate company, initiated a suit against the Company alleging damages of $2,395,000, claiming violations of an Agreement of Sale and various agreements signed in connection with the Agreement of Sale of twenty-three gasoline stations to the plaintiff in 1987. At the time of closing, there was an escrow set up with respect to several stations. The escrow is now closed, two of the stations were conveyed back to the Company and United Petroleum received the sum of $264,793, which will be credited to the Company should there be any recovery in the Company's action discussed in the next paragraph. The claim is for the entire purchase price. The plaintiff is currently operating all the stations and has not requested a rescission of the Agreement. The largest part of the plaintiff's claim relates to alleged misrepresentation of fuel sold at the various stations. As a result of discovery and investigation, the Company is vigorously defending the claim and believes it has a defense to substantially all of the claims. The Company has filed a suit against United Petroleum Realty Corp. and United Petroleum Marketing, Inc., seeking reimbursement for gasoline taxes paid to the Commonwealth of Pennsylvania by the Company that the Company claims were the responsibility of the defendants in connection with the purchase of the stations. The Company is asking for damages in excess of $50,000 and punitive damages in excess of $50,000. The matters discussed in this and the preceding paragraph may be consolidated for trial. The Company is not presently a party to any other litigation (i) that is not covered by insurance or (ii) which singly or in the aggregate would have a material adverse effect on the Company's financial condition and results of operations, and management has no knowledge that any other litigation has been threatened. Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On October 24, 1995, at the annual meeting of the Companys shareholders, the shareholders voted to adopt the 1995 Employee Incentive Stock Option Plan and reserve 200,000 shares of the Companys Common Stock for issuance under the Plan. The results of the voting were as follows: In Favor 4,568,853 Against 66,750 Abstain 14,310 Not Voted 560,011 Item 5. OTHER INFORMATION On November 17, 1995, the Securities and Exchange Commission declared effective a Registration Statement filed by the Company on Form S-3 for the underlying shares related to the convertible debentures and warrants issued in January and February 1995. The Company will not receive any additional cash if and when the shares covered by the Registration Statement are sold or upon the conversion of the debentures related to most of the shares. However, the Company could receive up to $334,800 in cash upon the exercise of warrants related to some of the shares. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS (2) Plan of acquisition, reorganization, agreement, liquidation, or succession Not applicable (3) Articles of Incorporation and By-laws Exhibit 3-a and exhibit 3-b to the Company's Registration Statement on Form S-18, File No. 33-7870- NY are incorporated herein by reference with respect to the Restated Certificate of Incorporation and By-laws of the Company. Certificate of Amendment of Certificate of Incorporation changing the name of the Corporation, is incorporated herein by reference to Exhibit 3-c of the Companys report of Form 10-K dated July 27, 1993. (4) Instruments defining the rights of security holders, including indentures Exhibit 4-a, Form of Common Stock Certificate, to the Company's Registration Statement on Form S-18, File No. 33-7870-NY is incorporated herein by reference with respect to instruments defining the rights of security holders. Exhibit 4-c, Form of Indenture dated as of January 24, 1995, between Travel Ports of America, Inc. and American Stock Transfer and Trust Company, as Trustee, with respect to up to $5,000,000 principal amount of 8.5% Convertible Senior Subordinated Debentures due January 15, 2005 is incorporated by reference to Exhibit 4-c to the Companys Current Report on Form 8-K dated February 15, 1995. Exhibit 4-d, Form of Warrant to purchase Common Stock is incorporated by reference to Exhibit 4-d to the Companys Current Report on Form 8-K dated February 15, 1995. (11) Statement re: computation of earnings per share Computation of earnings per share is set forth in Exhibit (11) on page 12 of this report. (15) Letter re: unaudited interim financial information Not applicable (18) Letter re: change in accounting principals Not applicable (19) Previously unfiled documents None (20) Report furnished to security holders Not applicable (23) Published report regarding matters submitted to vote of security holders None (24) Consents of experts and counsel Not applicable (25) Power of attorney None (26) Additional exhibits None (27) Supplemental Financial Information Exhibit (27) on page 15 of this report. (b) REPORT ON FORM 8-K None EXHIBIT (11) COMPUTATION OF PRIMARY EARNINGS PER SHARE FOR THE QUARTER ENDED OCTOBER 31, 1995 Net income per share was computed by dividing net income by the weighted average number of common shares outstanding and common stock equivalents. Total Options Average Average Qtr. Ended Below Market Option Price Market Price Shares 10/31/95 493,738 $2.19 $3.71 202,142 Average number of shares outstanding 5,236,924 5,439,066 Net income per common and common equivalent shares $.11 COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE FOR THE QUARTER ENDED OCTOBER 31, 1995 Net income per share was computed by dividing net income by the weighted average number of common shares outstanding, common stock equivalents, and the assumed conversion of the convertible debentures. Total Options and Warrants Average Qtr. Ended Below Market Exercise Price Market Price * Shares 10/31/95 586,738 $2.41 $3.71 204,899 Additional shares due to assumed exercise of convertible debentures 1,550,000 Average number of shares outstanding 5,236,924 6,991,823 Net income for quarter ended 7/31/95 $601,363 Interest on convertible debentures 59,288 $660,651 Net income per common and common equivalent shares - fully diluted $.09 COMPUTATION OF PRIMARY EARNINGS PER SHARE FOR THE SIX MONTHS ENDED OCTOBER 31, 1995 Net income per share was computed by dividing net income by the weighted average number of common shares outstanding and common stock equivalents. Total Options Average Average Qtr. Ended Below Market Option Price Market Price Shares 7/31/95 420,738 $1.87 $2.65 123,847 10/31/95 493,738 $2.19 $3.71 202,142 Total for Two Quarters 325,989 Average common stock equivalents outstanding during six months ended October 31, 1995 162,995 Average number of shares outstanding 5,236,924 5,399,919 Net income per common and common equivalent shares $.23 COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE FOR THE SIX MONTHS ENDED OCTOBER 31, 1995 Net income per share was computed by dividing net income by the weighted average number of common shares outstanding, common stock equivalents, and the assumed conversion of the convertible debentures. Total Options and Warrants Average Qtr. Ended Below Market Exercise Price Market Price * Shares 7/31/95 420,738 $1.87 $2.875 147,082 10/31/95 586,738 $2.41 $3.71 204,899 Total for Two Quarters 351,981 Average common stock equivalents outstanding during six months ended October 31, 1995 175,991 Additional shares due to assumed exercise of convertible debentures 1,550,000 Average number of shares outstanding 5,236,924 6,962,915 Net income for six months ended 10/31/95 $1,221,990 Interest on convertible debentures 118,576 $1,340,566 Net income per common and common equivalent shares - fully diluted $.19 * Amount reflects higher of average or period end market price. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TRAVEL PORTS OF AMERICA, INC. Date: December 13, 1995 s/ John M. Holahan John M. Holahan, President Date: December 13, 1995 s/ William Burslem III William Burslem III Vice President EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 QTR-1 APR-30-1996 OCT-31-1995 2,236,368 0 4,131,346 213,186 5,781,883 13,462,632 49,498,451 18,988,294 50,539,128 11,394,478 26,106,588 52,369 0 0 13,560,783 50,359,128 77,746,306 77,746,306 58,251,951 58,251,951 16,469,948 34,118 1,287,659 2,129,530 907,900 1,221,630 0 0 0 1,221,630 .23 .19
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