-----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, T46Z/t3lZmpAQAdzVapJEyYACpI4Wakuuqki4CSLo0u6A44mseEYtIXPjbJtNBbh j+DGBElT/GMppgf3atx9Dw== 0000891554-97-000557.txt : 19970602 0000891554-97-000557.hdr.sgml : 19970602 ACCESSION NUMBER: 0000891554-97-000557 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970530 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: METRO DISPLAY ADVERTISING INC CENTRAL INDEX KEY: 0000944742 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 33093323 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-25982 FILM NUMBER: 97617062 BUSINESS ADDRESS: STREET 1: 15265 ALTON PARKWAY STREET 2: STE 100 CITY: IRVINE STATE: CA ZIP: 92718 BUSINESS PHONE: 7147273333 MAIL ADDRESS: STREET 1: 15265 ALTON PARKWAY STREET 2: STE 100 CITY: IRVINE STATE: CA ZIP: 92718 10QSB 1 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- FORM 10-QSB ----------- [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 Commission File Number 0-25982 METRO DISPLAY ADVERTISING, INC. (exact name of small business issuer as specified in its charter) CALIFORNIA 33-0093323 (State of Incorporation) (IRS Employer Identification No.) SUITE 100 15265 ALTON PARKWAY IRVINE, CA 92618 (address of principal executive offices) (714) 727-3333 (issuer's telephone number, including area code) ------------------------------------------------------- Indicate by check mark whether the issuer (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 each such shorter period that the registrant was required to file such report), and (2) has been filing such requirements for the past 90 days. YES _X_ NO ___ Number of shares outstanding of each issuer's classes of common stock, as of March 31, 1997: 983,030 - ----------------------------------------------------------------- This report contains 8 sequentially numbered pages. METRO DISPLAY ADVERTISING, INC. INDEX PART I - FINANCIAL INFORMATION Page Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 1997 and 1996 Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 1997 and 1996 Notes to the Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II - OTHER INFORMATION Item 5. Other Information See accompanying Notes to Condensed Financial Statements. PART I FINANCIAL INFORMATION Item 1, Financial Statements METRO DISPLAY ADVERTISING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS December 31, Mar 31, 1996 1997 ------------ ------------ (unaudited) CURRENT ASSETS Cash ................................................................... 74,947 188,212 Accounts receivable, net of allowance .................................. 989,804 989,443 Prepaid expenses and other assets ...................................... 226,844 60,819 Deferred taxes- current portion ........................................ 196,000 196,000 ------------ ------------ TOTAL CURRENT ASSETS ............................................... 1,487,595 1,431,474 PROPERTY AND EQUIPMENT, net ............................................ 6,172,659 6,081,056 OTHER ASSETS Performance Bond Deposits .............................................. 734,722 709,722 Deferred taxes - less current portion .................................. 3,052,000 3,052,000 Other assets ........................................................... 186,528 217,722 ------------ ------------ TOTAL OTHER ASSETS ..................................................... 3,973,250 3,979,444 ------------ ------------ $ 11,633,504 $ 11,491,974 ============ ============ LIABILITIES AND SHAREHOLDERS EQUITY CURRENT LIABILITIES Current portion of long-term debt ...................................... 693,065 620,327 Accounts payable & accrued expenses .................................... 1,031,117 851,015 Advance payments ....................................................... 226,067 150,000 ------------ ------------ TOTAL CURRENT LIABILITIES ....................................... 1,950,249 1,621,342 LONG-TERM DEBT, net of current portion ................................. 833,785 813,458 ------------ ------------ SHAREHOLDERS EQUITY Preferred stock, 1,000,000 shares authorized, no par value, no shares issued Common stock, 5,000,000 shares authorized, no par value ................ 9,504,532 9,504,532 Accumulated Deficit .................................................... (655,062) (447,358) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY ..................................... 8,849,470 9,057,174 ------------ ------------ $ 11,633,504 $ 11,491,974 ============ ============
See accompanying Notes to Condensed Financial Statements. METRO DISPLAY ADVERTISING INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended Mar. 31, ---------------------------- 1996 1997 ----------- ----------- SALES ........................................ $ 1,277,436 $ 2,076,870 COST OF SALES City fees ................................ 370,711 357,843 Advertising commissions and expenses ..... 301,231 536,310 Installation and maintenance ............. 361,432 283,894 Other costs .............................. 45,376 45,932 ----------- ----------- TOTAL COST OF SALES ................ 1,078,750 1,223,979 GROSS PROFIT ............................. 198,686 852,891 ----------- ----------- OPERATING EXPENSES Sales and administrative .................. 316,082 397,765 Depreciation .............................. 236,643 235,371 Interest expense .......................... 34,873 32,205 Other expense (Income) .................... (26,059) (20,154) ----------- ----------- TOTAL OPERATING EXPENSES ............ 561,539 645,187 ----------- ----------- NET INCOME (LOSS) ............................ $ (362,853) $ 207,704 =========== =========== COMMON SHARES OUTSTANDING .................... 823,030 983,030 =========== =========== NET INCOME (LOSS) PER SHARE .................. (.44) .21 =========== =========== See accompanying Notes to Condensed Financial Statements. METRO DISPLAY ADVERTISING INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
Three Month Ended Mar. 31 ---------------------- 1996 1997 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) .................................................................... $(362,853) $ 207,704 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and Amortization ......................................................... 236,643 235,371 Changes in operating assets and liabilities: Accounts receivable ................................................................. 465,995 3,361 Prepaid expenses & other ............................................................ 29,292 166,025 Accounts payable and accrued expenses ............................................... (229,449) (180,102) Advanced payments ................................................................... -- (76,067) --------- --------- NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES .................................................................... 139,628 356,292 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment .................................................... (20,536) (143,768) Advances to joint venture ............................................................. -- (31,194) Performance bond deposits ............................................................. (7,000) 25,000 --------- --------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES ......................................................... (27,536) (149,962) CASH FLOWS FROM FINANCING ACTIVITIES Principal reductions of long-term debt ................................................ (160,138) (93,065) --------- --------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES ........................................................ (160,138) (93,065) --------- --------- NET INCREASE (DECREASE) IN CASH ............................................................ (48,046) 113,265 Beginning of period .................................................................. 225,524 74,947 --------- --------- CASH, End of period ........................................................................ $ 177,478 $ 188,212 ========= =========
See accompanying Notes to Condensed Financial Statements. METRO DISPLAY ADVERTISING, INC. AND SUBSIDIARY Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1. Introduction The accompanying condensed consolidated financial statements of Metro Display Advertising, Inc. (the "Company") have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the consolidated financial statements and related footnotes included in the Company's latest Annual Report on Form 10-SB. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company as of March 31, 1997, and the statements of its operation and its cash flows for the three month periods ended March 31, 1997 and 1996 have been included. The results of operation for interim periods are not necessarily indicative of the results, which may be realized for the full year. See accompanying Notes to Condensed Financial Statements. Item 2. Management's Discussion and Analysis of Plan of Operations General From January 22, 1992 until January 7, 1994, Metro Display Advertising, Inc., a California Corporation (the "Company"), was in bankruptcy. Since its bankruptcy proceedings, the Company has primarily been in the business of leasing advertising space on panels located in its bus stop shelters. The Company's shelters are located in both Northern and Southern California. In addition, the Company operates in Clark County, Nevada, and the City of Las Vegas, Nevada through Bustop Shelter of Nevada, (BSON), a Nevada Corporation and fully owned susidiary. During the fiscal years ended December 31, 1994 and 1995, the Company made the transition from a company operating under the bankruptcy court in prior years, to a company operating under a revised business plan. The Company's primary focus was on increasing sales and occupancy rates, reducing overhead, and continuing scheduled payments to pre-bankruptcy Plan of Reorganization. The Company's objectives for fiscal year 1997 remain dedicated to this business plan. Comparisons of three-months ended March 31, 1997 and March 31, 1996 Sales Sales for the three-month quarter ended March 31, 1997 (the "Current Quarter") increased by $799,434, or 63%, in comparison to the three-month period ended March 31, 1996 (the "Prior Quarter"). This increase in sales in the Current Quarter is attributable to the intensive marketing and public relations campaign that has been staged to offset the on-going litigation with the City of Victorville. The on-going litigation involves the Company's First Amendment Rights. In general, the Company believes that its rights to freely advertise were violated when the City prevented the Company from displaying paid advertising for a local labor union. While the first quarter results have been positive it is expected that this litigation will continue to impact sales growth in the remaining three-quarters of 1997. Cost of Sales Cost of sales increased by $145,229 or 13.5% over the prior quarter primarily due to increases in advertising commissions and expenses resulting from sales growth for the quarter ended March 31, 1997. The increase in advertising commissions and expenses were partially offset by a decrease in installation and maintenance costs over the prior period. Cost of sales as a percentage of sales declined from 84.5% in the Prior Quarter, to 58.9% in the Current Quarter. The Company's gross profit percentage increased from 15.6% in the Prior Quarter to 41.1% in the Current Quarter, primarily resulting from first quarter sales growth. Operating Expenses An increase of $83,648 was incurred in operating expenses during the current quarter principally due to increases in marketing, public relations, and legal expenses necessary to deal with the Victorville litigation. See accompanying Notes to Condensed Financial Statements. Net Profit(Loss) Due to the significant sales growth for the period ending March 31, 1997, the Company posted a $207,704 net income, before income taxes, during the current quarter compared to a ($362,853) of net loss before taxes during the prior quarter. The Company has maintained its primary focus on increasing sales and occupancy rates, and reducing overhead. Liquidity and Capital Resources As of March 31, 1997, the Company's current liabilities exceeded its current assets by $189,868. Approximately $329,893 of the current liabilities consists of the current portion of indebtness owed to Dr. Allan Ross, a Director of the Company. The Company's working capital position inproved by $272,786 during the Current Quarter, primarily the result of an increase in sales of $799,434. Cash flows from operating activities increased by $ 216,664 over the Prior Quarter, principally due to the change in net income for the Current Quarter. The amount available under the credit facility is approximately $700,000. The Company believes that it will be able to fund its current working capital needs from (1) cash generated from operating activitities and (2) draws against the credit line facility. PART II OTHER INFORMATION Item 5. Other Information Subsequent to year-end December 31, 1996, the Company signed a memorandum of uderstanding with a buyer for the sale of all of the Company's stock. The transaction is subject to stockholder ratification and completion of due diligence procedures to be performed by the buyer. Signature Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. METRO DISPLAY ADVERTISING, INC. /s/ Scott Kraft Dated May 14, 1996 ------------------------------- Scott A. Kraft, President and Chief Financial Officer See accompanying Notes to Condensed Financial Statements. EX-27 2 FDS METRO DISPLAY FOR MARCH 31, 1997
5 3-MOS DEC-31-1996 JAN-01-1997 MAR-31-1997 188,212 0 1,132,982 (143,539) 0 1,431,474 6,081,056 235,371 11,491,974 1,621,342 0 0 0 9,504,532 0 11,491,974 2,076,870 2,076,870 1,223,979 1,223,979 645,187 0 32,205 0 0 207,704 0 0 0 207,704 0 0
-----END PRIVACY-ENHANCED MESSAGE-----