-----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, OnVHERgDoD3vvTDZq2d0MDadmm0Nj39qyFIUWIoYsIt/2uddxyyNUZQk62olYfkD THUj/28WMEe+0O9foB+l8Q== 0000950114-97-000232.txt : 19970502 0000950114-97-000232.hdr.sgml : 19970502 ACCESSION NUMBER: 0000950114-97-000232 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970501 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTRAV INC CENTRAL INDEX KEY: 0000942317 STANDARD INDUSTRIAL CLASSIFICATION: TRANSPORTATION SERVICES [4700] IRS NUMBER: 431323155 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25990 FILM NUMBER: 97593789 BUSINESS ADDRESS: STREET 1: 7711 BONHOMME AVE CITY: ST LOUIS STATE: MO ZIP: 63105 BUSINESS PHONE: 3147270500 MAIL ADDRESS: STREET 1: 7711 BONHOMME AVE CITY: ST LOUIS STATE: MO ZIP: 63105-1961 10-Q 1 INTRAV, INC. FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 10-Q (Mark One) /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 1997 -------------- 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 0-25990 -------------------------------- INTRAV, INC. (Exact name of registrant as specified in its charter) MISSOURI 43-1323155 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 7711 BONHOMME AVENUE, ST. LOUIS, MISSOURI 63105 (Address of principal executive offices) (314) 727-0500 (Registrant's telephone number, including area code) NO CHANGES (Former name, former address and former fiscal year, if change since last report) -------------------------------- 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 / / -------------------------------- The Company had 5,136,600 shares of common stock outstanding at April 30, 1997. 2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------------------------------------------------------------------------------- INTRAV, INC. STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT EARNINGS PER SHARE)
THREE MONTHS ENDED MARCH 31, ------------------------------------------------- 1997 1996 ---- ---- (UNAUDITED) Program revenues $ 27,174 $ 31,396 Cost of operations 22,023 25,368 -------------- --------------- Gross profit 5,151 6,028 Selling, general and administrative 3,747 3,892 Depreciation and amortization 304 448 -------------- --------------- Operating income 1,100 1,688 Investment income 201 389 Interest expense (64) (486) -------------- --------------- Income before provision for income taxes 1,237 1,591 Provision for income taxes 445 568 -------------- --------------- Net income 792 1,023 ============== =============== Net income per common share $ 0.15 $ 0.19 ============== =============== Weighted average number of common shares outstanding 5,152 5,285 ============== =============== See notes to financial statements.
2 3 INTRAV, INC. BALANCE SHEETS (IN THOUSANDS)
MARCH 31, DECEMBER 31, ASSETS 1997 1996 ----------- ----------- (UNAUDITED) Current assets: Cash and cash equivalents $ 6,796 $ 6,670 Restricted cash 2,727 1,917 Marketable securities - 776 Restricted marketable securities 4,748 4,751 Prepaid program costs 6,341 9,821 Prepaid expenses 1,001 868 Other current assets 1,125 1,520 ---------- ----------- Total current assets 22,738 26,323 Property and equipment - net 17,500 17,569 Prepaid promotion costs 8,494 8,702 ---------- ----------- Total $ 48,732 $ 52,594 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 2,137 $ 3,298 Accrued expenses 2,632 3,897 Deferred revenue 28,072 29,096 Income taxes payable 415 616 Due to affiliate - 427 Deferred income taxes 2,402 2,404 ---------- ----------- Total current liabilities 35,658 39,738 Deferred compensation 1,084 1,012 Deferred income taxes 5,063 5,063 Long-term debt 3,000 3,000 Shareholders' equity: Preferred stock, $.01 par value - authorized, 5,000,000 shares; issued and outstanding, none Common stock, $.01 par value - authorized, 20,000,000 shares; issued and outstanding, 5,151,600 shares in 1997 and 1996 53 53 Additional paid-in capital 22,189 22,189 Retained earnings (16,907) (17,055) Unrealized loss on marketable securities (4) (2) ---------- ----------- 5,331 5,185 Less cost of common stock in treasury, 173,400 shares in 1997 and 1996 (1,404) (1,404) ---------- ----------- Total shareholders' equity 3,927 3,781 ---------- ----------- Total $ 48,732 $ 52,594 ========== =========== See notes to financial statements.
3 4 INTRAV, INC. STATEMENTS OF CASH FLOWS (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, 1997 1996 ---- ---- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 792 $ 1,023 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 304 448 Amortization of bond premium - 18 Amortization of deferred financing costs - 5 Gain on sale of marketable securities - (35) Deferred income taxes (4) (350) Changes in assets and liabilities which provided (used) cash: Restricted cash (810) 430 Prepaid expenses and other assets 3,555 3,207 Other current assets 395 (464) Accounts payable and accrued expenses (2,426) (1,544) Deferred revenue (1,024) (8,806) Deferred compensation 72 41 Income taxes payable (201) 568 ----------- ------------ Net cash provided by (used in) operating activities 653 (5,459) ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (235) (110) Sales of marketable securities 779 6,540 Purchases of marketable securities - (4,306) ----------- ------------ Net cash provided by (used in) investing activities 544 2,124 ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Dividends paid (644) (660) Purchase of treasury stock - (716) Net cash received from (paid to) Windsor, Inc. (427) - ----------- ------------ Net cash provided by (used in) financing activities (1,071) (1,376) ----------- ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 126 (4,711) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,670 12,178 ----------- ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,796 $ 7,467 =========== ============ See notes to financial statements.
4 5 - ------------------------------------------------------------------------------- INTRAV, INC. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) DESCRIPTION OF BUSINESS Intrav, Inc. (the "Company") is a leading designer, organizer, marketer and operator of deluxe, escorted, international travel programs. The Company's programs are designed to appeal to higher income individuals desiring first-class travel experiences. The Company markets substantially all of its programs via direct mail through sponsoring "affinity groups", or directly to the ultimate traveler. On December 31, 1996, INTRAV acquired all the outstanding common stock of Clipper Cruise Line from Windsor, Inc., a company controlled by Barney A. Ebsworth, INTRAV's Chairman of the Board and majority stockholder. Due to the common ownership and control of Mr. Ebsworth over both INTRAV and Clipper, the acquisition was accounted for in a manner similar to a pooling-of-interests method and, accordingly, all financial data has been restated to include the accounts and results of operations of Clipper for all periods presented. Clipper is a leading designer, organizer, marketer and operator of deluxe, escorted, domestic and international travel cruises. Similar to INTRAV, its programs are designed to appeal to higher-income individuals desiring first-class travel experiences and are primarily marketed through sponsoring "affinity groups," or directly to the ultimate traveler. Clipper's travelers cruise primarily on its two cruise ships, the M/V Yorktown Clipper and the M/V Nantucket Clipper. The unaudited financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, in the opinion of management of the Company, the financial statements include all adjustments, which consist of normal recurring accruals, necessary to present fairly the financial information for such periods. These financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 1996 contained in the Company's Annual Report on Form 10-K, dated March 28, 1997, as filed with the Securities and Exchange Commission. DIVIDEND DECLARATION On May 1, 1997, the Company declared a dividend of $0.125 per share, for shareholders of record on May 30, 1997, to be paid on June 16, 1997 STOCK REPURCHASE PROGRAM/STOCK OPTION GRANT In January 1996, the Board of Directors approved a Stock Repurchase Program whereby the Company intends to purchase up to 300,000 shares of common stock over an unspecified period of time as market conditions allow. Such repurchased shares may be used to fund the Company's stock option plan. As of March 31, 1997, the Company had purchased 173,400 shares. On March 19, 1997, the Company granted options to purchase 200,000 shares to the Company's President and Chief Executive Officer. 5 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION - ------------------------------------------------------------------------------- GENERAL The Company recognizes the revenues and related costs of operations upon the completion of each tour departure. The actual results reflect the timing of the completion of such tour departures. Because of the timing of recognition of revenues and related costs, quarterly comparisons from year-to-year may not be indicative of the Company's level of business activity for the compared quarters or be indicative for the results of operations for the year. The Company's business tends to be seasonal, with higher activity generally occurring in the summer, early fall, and winter months. Program revenues include revenues from the sale of base travel programs, as well as optional products and services, including sightseeing, program extensions, domestic airfare, and medical and educational seminars. Cost of operations include the costs of airfare, ship, hotel and other accommodations and services included in the base programs and optional products and services. Also included are the costs of creating and distributing promotional materials and promotional expenses for each program. PROGRAM REVENUES Program revenues for the three months ended March 31, 1997 compared to 1996, decreased $4.2 million or 13.4%, from $31.4 million in 1996 to $27.2 million in 1997. This decrease was due to 1,339 fewer travelers, representing a 16.4% decrease, from 8,177 travelers in 1996 to 6,838 travelers in 1997. The decrease in travelers was primarily attributable to the reduced number of travelers participating on the Trans Panama Canal program in 1997 compared to 1996. This decrease was partially offset by a $134 increase in the average revenue per traveler, or 3.5%, from $3,840 in 1996 to $3,974 in 1997. COST OF OPERATIONS Cost of operations for the three months ended March 31, 1997 compared to 1996, decreased $3.4 million or 13.4%, from $25.4 million in 1996 to $22.0 million in 1997. This decrease reflects the decreased level of program costs resulting from fewer travelers. The average cost per traveler increased $118 per traveler, from $3,103 in 1996 to $3,221 in 1997. Costs of operations increased as a percentage of program revenues from 80.8% in 1996 to 81.0% in 1997 due to reduced program revenues and a constant level of promotional expenses associated with the programs operating in the first quarter of 1997 compared to 1996. GROSS PROFIT Gross profit for the three months ended March 31, 1997 compared to 1996, decreased $0.8 million or 14.5%, from $6.0 million in 1996 to $5.2 million in 1997, as a result of decreased revenues and higher relative costs of operations in 1997. Gross profit decreased as a percentage of revenues from 19.2% in 1996 to 19.0% in 1997, primarily due to the reduced level of program revenues and a constant level of promotional expenses associated with the programs operating in the first quarter of 1997 compared to 1996. 6 7 SELLING GENERAL AND ADMINISTRATIVE EXPENSESs Selling, general and administrative expenses for the three months ended March 31, 1997 compared to 1996, decreased $0.2 million, or 3.7%, from $3.9 million in 1996 to $3.7 million in 1997. This decrease was primarily due to lower credit card transaction fees and office operating expenses. Selling, general and administrative expenses increased as a percentage of revenues from 12.4% in 1996 to 13.8% in 1997 due to the decrease in program revenues. DEPRECIATION AND AMORTIZATION Depreciation and amortization, primarily relating to the cruise ships and internally developed software, for the three months ended March 31, 1997 compared to 1996, decreased $140,000, or 31.3%, from $448,000 to $304,000. Depreciation and amortization decreased as a precentage of revenues from 1.4% in 1996 to 1.1% in 1997. INVESTMENT INCOME Investment income for the three months ended March 31, 1997 compared to 1996, decreased $188,000 from $389,000 in 1996 to $201,000 in 1997. This decrease was due to a lower level of investable cash resulting from the acquisition of Clipper Cruise Line on December 31, 1996. The average monthly balance of cash and marketable securities during the first quarter decreased from $25.6 million in 1996 to $12.5 million in 1997. INTEREST EXPENSE Interest expense, consisting of amounts paid for draws made on the Company's $10.0 million revolving credit facility, totaled $64,000 for the three months ended March 31, 1997. The 1996 amount totaled $486,000, and represented amounts paid on the U.S. Government Financing Bonds, relating to the cruise ships and the outstanding loan balance owed to Windsor, Inc. LIQUIDITY AND CAPITAL RESOURCES The Company continues to fund its operations, capital expenditures, dividend payments and treasury stock purchases through cash flows generated from operations and from retained earnings. Net cash provided by (used in) operating activities for the three months ended March 31, 1997 and 1996, was $653,000 and $(5.5) million, respectively. The Company recognizes program revenues as income upon the completion of each tour departure. Deferred revenue balances consist of amounts received from travelers for tour departures which have not been completed. Of the $28.1 million of deferred revenue at March 31, 1997, approximately $18.9 million, or 67.4%, relates to tour departures which will be completed by June 30, 1997. The balance of the deferred revenue, $9.2 million, relates to deposits and payments for tour departures which will be completed after March 31, 1997. The Company paid cash dividends of $644,000 during the three months ended March 31, 1997. 7 8 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------------------------------------------------------------------------------- (a) Not applicable. (b) Reports on Form 8-K. The Company filed Form 8-K on January 14, 1997, announcing the Company completed the acquisition of Clipper Cruise Line on December 31, 1996. The Company also filed Form 8-K/A on March 14, 1997, which included the financial statements of the acquired companies and the restated financial statements of the consolidated Company. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registration has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTRAV, INC. (Registrant) Date: May 1, 1997 /s/ Michael A. DiRaimondo ------------------------------------ Michael A. DiRaimondo Senior Vice President and Chief Financial Officer 8 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 9,523 4,748 0 0 0 22,738 33,599 16,099 48,732 35,658 3,000 53 0 0 3,874 48,732 27,174 27,375 22,023 22,023 4,051 0 64 1,237 445 792 0 0 0 792 0.15 0.15
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