PARKS AMERICA INC

Previous wording

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying unaudited consolidated financial statements and provides additional information on the our businesses, current developments, financial condition, cash flows and results of operations. The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our Annual Report on Form 10-K for the fiscal year ended October 1, 2023.

Current wording

Management’s discussion and analysis of results of operations and financial condition (“MD&A”) is a supplement to the accompanying unaudited consolidated financial statements and provides additional information on our businesses, current developments, financial condition, cash flows and results of operations. The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our Annual Report on Form 10-K for the fiscal year ended October 1, 2023.

Previous wording

On December 22, 2023, Focused Compounding Fund, LP (together with the participants in its solicitation, “Focused Compounding”) submitted documents to the Company purporting to provide qualifying notice as to a demand that the Company hold a special meeting of stockholders (the “Special Meeting”). The Special Meeting was held for the purpose of asking stockholders to consider and vote upon five proposals, including a proposal for the removal of all directors currently serving on the Board of Directors and a proposal for the election of a new Board of Directors comprised entirely of Focused Compounding’s slate of three candidates. The Special Meeting was held on February 26, 2024, and each of Focused Compounding’s proposals failed, including its proposals to reconstitute the Company’s Board of Directors.

Current wording

On December 22, 2023, Focused Compounding Fund, LP (together with the participants in its solicitation, “Focused Compounding”) submitted documents to the Company purporting to provide qualifying notice as to a demand that the Company hold a special meeting of stockholders (the “Special Meeting”). The Special Meeting was held for the purpose of asking stockholders to consider and vote upon five proposals, including a proposal for the removal of all directors currently serving on the Board of Directors and a proposal for the election of a new Board of Directors comprised entirely of Focused Compounding’s slate of three candidates. The Special Meeting was held on February 26, 2024 and Focused Compounding’s proposal to reconstitute the Board of Directors did not pass.

Previous wording

On March 1, 2024, Focused Compounding filed a Complaint in the Eighth Judicial District Court of Clark County against the Company and each of the members of our Board of Directors, alleging that the defendants were contemplating efforts to entrench themselves of members of the Board of Directors. See “NOTE 9. COMMITMENTS AND CONTINGENCIES” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.

Current wording

On March 1, 2024, Focused Compounding filed a Complaint in the Eighth Judicial District Court of Clark County against the Company and each of the members of our Board of Directors, alleging that the defendants were contemplating efforts to entrench themselves of members of the Board of Directors. On June 20, 2024, Focused Compounding, the Company and the named defendants agreed to a stipulation dismissing with prejudice any and all claims by and between the parties outlined in the initial Complaint in light of the results of the Company’s annual meeting of stockholders held on June 6, 2024.

Previous wording

Our 2024 fiscal year capital plan reflects the further strategic rebuild of our Georgia Park following the March 2023 severe weather event and continues to set the stage for longer-term master planning and optimization at each of our parks. The centerpiece of our 2024 capital plan is a new restroom building and main entry plaza at our Georgia Park. The existing restroom building was near the end of its useful life, and the tornado damage rendered it beyond repair. We believe this investment is paramount in improving the overall guest experience and will pave the way for a new standard. The new main entry plaza will provide an improved arrival experience and a place for our guests to dwell, which we believe will positively impact our Georgia Park for decades to come.

Current wording

Our 2024 fiscal year capital plan reflects the further rebuild of our Georgia Park following the March 2023 severe weather event. The largest component of our 2024 capital plan is a new restroom building and main entry plaza at our Georgia Park. The existing restroom building was near the end of its useful life, and the tornado damage rendered it beyond repair. The new restroom building and entry portal project is expected to be completed near the end of the first quarter of our 2025 fiscal year. Also in Georgia, our carnivore night house has been rebuilt, a capybara encounter area has been added, roadway infrastructure improved, and additional fencing and sidewalks repaired. We continue to take a strategic and measured approach to the rebuild at our Georgia Park, ensuring we put in place a product that will withstand the test of time and improve the guest, animal and staff experience.

Previous wording

Also in Georgia, our carnivore night house will be rebuilt, a capybara encounter area will be added, roadway infrastructure improved, and additional fencing and sidewalks repaired. We continue to take a strategic and measured approach to the rebuild at our Georgia Park, ensuring we put in place a product that will withstand the test of time and improve the guest, animal and staff experience, ultimately delivering higher revenue and profitability. At our Missouri Park, the 2024 capital plan is focused on activation of a guest-facing pond within the Walkabout featuring a nature trail and pond access for a fish feeding experience, the expansion of shade structures, additional rental vehicles, and equipment capital. Capital spending planned for 2024 at our Texas Park will be focused on key infrastructure needs, including electrical build out at the Park to right-size the service within the facility, hay storage, the completion of the keeper facility and general safety related improvements. We remain committed to our long-term vision for our parks, and we believe our 2024 capital plan balances additional needs from the Georgia Park tornado and deferred maintenance, along with the addition of guest facing improvements and amenities. Our 2024 fiscal year capital plan anticipates spending approximately $1.4 million, which will again be fully funded from our existing cash and continues to demonstrate our commitment to building for long-term, sustainable growth.

Current wording

At our Missouri Park, the 2024 capital plan has been focused on activation of a guest-facing pond within the Walkabout featuring a nature trail and pond access for a fish feeding experience, the expansion of shade structures, additional rental vehicles, and equipment capital. Capital spending for 2024 at our Texas Park has been focused on key infrastructure needs, including electrical build out to right-size the service within the facility, hay storage, the completion of the keeper facility and general safety related improvements.

Previous wording

We are committed to leveraging the strong operating model we have established at our Georgia Park at all three of our properties, with a focus on increasing attendance through enhanced marketing efforts and focused capital investments, as well as continuing to prudently increase the average revenue generated per guest visit via concession and gift shop revenues. In addition to rebuilding and improving our Georgia Park Walkabout, among our highest priorities over the next several years are the enhancement of the overall guest experience, streamlining and optimizing our systems, operating standards and practices, and increasing per capita revenue, through the introduction of new programming and more targeted marketing efforts. Our Texas Park opened to the public in May 2019 and we believe there remains long-term potential to increase attendance by increasing the local and regional awareness of this facility via advertising and promotion. We remain encouraged by the higher levels of attendance at our Missouri Park which began in the spring of 2020 and plan on prudently leveraging the increased exposure of this facility to continue to build on this success.

Current wording

We are committed to leveraging the strong operating model established at our Georgia Park at all three of our properties, with a focus on increasing attendance through enhanced marketing efforts and focused capital investments, as well as continuing to prudently increase the average revenue generated per guest visit via concession and gift shop revenues. One of our highest priorities over the next several years is rebuilding and improving our Georgia Park Walkabout. Our Texas Park opened to the public in May 2019 and we believe there remains long-term potential to increase attendance by increasing the local and regional awareness of this facility via advertising and promotion. We are encouraged by the higher levels of attendance and park revenues at our Missouri Park which began in the spring of 2020 and plan on prudently leveraging the increased exposure of this facility to continue to build on this success.

Previous wording

Strong annual operating cash flow over the past several fiscal years has provided us with incremental operating margin, funded significant increases in capital investment, allowed us to paydown debt following the Aggieland Safari acquisition in 2020, and quickly reopen after the significant damage and business interruption caused by the March 2023 severe weather event at our Georgia Park. However, our current size and operating model leaves us little room for error. Any future capital raised by us may result in dilution to existing stockholders. It is possible that the cash generated by, or available to, us may not be sufficient to fund our capital and liquidity needs for the near term.

Current wording

Strong annual operating cash flow over the past several fiscal years has provided us with incremental operating margin, funded significant increases in capital investment, allowed us to paydown debt following the Aggieland Safari acquisition in 2020, as well as spend to quickly reopen after the significant damage and business interruption caused by the March 2023 severe weather event at our Georgia Park. Our near-term financial capability has also been negatively impacted by expenses related to the contested proxy and related matters. Our current size and operating model leave us little room for error. Any future capital raised by us may result in dilution to existing stockholders. It is possible that the cash generated by, or available to, us may not be sufficient to fund our capital and liquidity needs for the near term.

Previous wording

The following table shows our consolidated and segment operating results for the three month periods ended March 31, 2024 and April 2, 2023:

Current wording

The following table shows our consolidated and segment operating results for the three months ended June 30, 2024 and July 2, 2023:

Previous wording

Our total revenues for the three months ended March 31, 2024 totaled $1.96 million, an increase of $82,735, compared to the three months ended April 2, 2023. Our combined park revenues were $1.92 million, an increase of $66,675 or 3.6%, while animal sales were $33,960, an increase of $16,060. In mid-January 2024 we completed the strategic switch to a new ticketing platform, which we believe improves the guest experience, while also providing improved functionality for our park customer services teams. While this change had a net neutral impact on our profitability, we no longer directly up-charge customer transaction fees. On a pro forma basis, adjusting for the tornado damage closure of our Georgia Park for the final eight days during the three months ended April 2, 2023, as well as the change in accounting for customer transaction processing fees, our park revenues for the three months ended March 31, 2024 decreased by approximately 8.9%.

Current wording

Our total revenues for the three months ended June 30, 2024 totaled $3.49 million, an increase of $598,612, compared to the three months ended July 2, 2023. Our total park revenues were $3.36 million, an increase of $555,211 or 19.8%, while animal sales were $92,021, an increase of $43,401. In mid-January 2024 we completed the strategic switch to a new ticketing platform, which we believe improves the guest experience, while also providing improved functionality for our park customer services teams. While this change had a net neutral impact on our profitability, we no longer directly up-charge customer transaction fees. On a pro forma basis, adjusting for the impact of our Georgia Park closure and phased reopening that extended for the first six weeks of the three months ended July 2, 2023, as well as the change in accounting for customer transaction processing fees, our park revenues for the three months ended June 30, 2024 decreased by approximately $57,400 or 1.7%.

Previous wording

For the three months ended March 31, 2024, paid attendance at our Missouri and Georgia Parks increased by approximately 46.2% and 8.7%, while attendance at our Texas Park decreased by approximately 8.8%. Each park was negatively impacted by unfavorable comparable weather in January, which had the most significant impact on attendance at our Georgia and Texas Parks. We believe our Georgia Park continues to be impacted by an increased competition in the greater Atlanta market, as well as a continuing overhang from the March 2023 tornado as we work to fully rebuild. We continue to believe that all three of our parks have benefitted from the transition to a new ad agency, with a focus on digital marketing.

Current wording

For the three months ended June 30, 2024, paid attendance at our Georgia and Missouri Parks increased by approximately 28.1% and 15.7%, while attendance at our Texas Park was essentially flat. While higher on a reported basis due to the impact of the 2023 tornado related closure, we believe attendance at our Georgia Park continues to be negatively impacted by increased competition in the greater Atlanta market, as well as a continuing overhang from the March 2023 tornado as we work to fully rebuild.

Previous wording

Our segment income was 267,661 for the three months ended March 31, 2024, an increase of $98,882, compared to a segment income of $168,779 for the three month period ended April 2, 2023. Our Georgia Park generated segment income of $185,645, a decrease of $1,888, primarily attributable lower park revenues, lower food service margins, and higher staffing related costs, partially offset by higher animal sales and lower advertising expense. Our Missouri Park generated segment income of $50,940, a net improvement of $96,876, primarily attributable to higher park revenues, partially offset by higher staffing related costs. Our Texas Park generated segment income of $31,076, an increase of $3,894, primarily attributable to lower advertising and general operating expenses, as well as higher animal sales, were partially offset by lower park revenues, as well as higher animal feed and staffing related costs.

Current wording

Our segment income was $1.50 million for the three months ended June 30, 2024, an increase of $543,318, compared to a segment income of $959,012 for the three months ended July 2, 2023. Our Georgia Park generated segment income of $1.17 million, an increase of $463,031, primarily attributable to higher park revenues and higher animal sales, and lower advertising expense, partially offset by lower food service margins and higher staffing related costs. Our Missouri Park generated segment income of $222,714, an increase of $55,211, primarily attributable to higher park revenues, partially offset by higher staffing related and advertising costs. Our Texas Park generated segment income of $107,086, an increase of $25,076, primarily attributable to lower advertising and general operating expenses, as well as higher park revenues and animal sales, partially offset by higher staffing related costs.

Previous wording

Depreciation and amortization expense for the three months ended March 31, 2024 increased by $9,144, to $218,593, primarily attributable to higher depreciation expense for our Georgia Park, partially offset by lower depreciation expense for our Missouri and Texas Parks.

Current wording

Depreciation and amortization expense for the three months ended June 30, 2024 increased by $8,728, to $230,852, primarily attributable to higher depreciation expense for our Georgia and Texas Parks, partially offset by lower depreciation expense for our Missouri Park.

Previous wording

During the three months ended March 31, 2024, we recorded $1.16 million of expenses associated with a contested proxy contest and related matters. This includes costs associated with preparation for and conducting a Special Meeting of Stockholders held on February 26, 2024, at the request of Focused Compounding Fund, LLC (“FC”), as well as legal costs associated with a lawsuit filed in the State of Nevada by FC on March 1, 2024. See “NOTE 11. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.

Current wording

During the three months ended June 30, 2024, we recorded $746,570 of expenses associated with a contested proxy and related matters. This includes legal costs associated with a lawsuit filed in the State of Nevada by Focused Compounding on March 1, 2024, as well as costs leading up to and associated with our annual stockholder meeting on June 6, 2024 considered by management to be above and beyond the costs of a normal stockholders meeting. See “NOTE 11. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.

Previous wording

As a result of the tornado and severe weather damage at our Georgia Park during March 26-27, 2023, for the six months ended April 2, 2023, we recorded $381,676 of tornado related expenses, primarily due to tree and other debris removal, repairing and replacing underground water pipes throughout the property, as well as general clean-up and reopening efforts. In addition, we recorded tornado and severe weather related asset write-offs of $250,696, primarily associated with damage to various animal exhibits, several buildings, fencing and other infrastructure.

Current wording

As a result of the tornado and severe weather damage at our Georgia Park during March 26-27, 2023, for the three months ended July 2, 2023, we recorded $397,749 of tornado related expenses, primarily due to tree and other debris removal, repairing and replacing underground water pipes throughout the property, as well as general clean-up and reopening efforts. In addition, we recorded tornado and severe weather-related asset write-offs of $20,728. These expenses and write-offs were more than offset by $687,253 of insurance proceeds from our commercial property coverage, resulting a net insurance recovery of $268.776 for the three months ended July 2, 2023. During the three months ended June 30, 2024, we received the final expected insurance proceeds of $53,755 related to the Georgia Park 2023 tornado event.

Previous wording

Other income, net for the six months ended March 31, 2024 increased by $8,634, to $69,913, attributable to higher interest income, partially offset by lower mineral rights royalty income from our Texas Park property.

Current wording

Other income, net for the three months ended June 30, 2024 increased by $27,983, to $31,412, attributable to lower non-operating expenses and higher interest income, partially offset by lower mineral rights royalty income from our Texas Park property.

Previous wording

Interest expense for the three months ended March 31, 2024 decreased by $7,342, to $49,147, attributable to a reduction in term loan interest.

Current wording

Interest expense for the three months ended June 30, 2024 decreased by $7,591, to $46,923, attributable to a reduction in term loan interest.

Previous wording

For the six months ended March 31, 2024, we reported a pre-tax loss of $1.82 million. Based on a year-to-date blend of federal and State of Georgia pre-tax losses, we recorded an income tax benefit of $449,600 for the six months ended March 31, 2024.

Current wording

For the three months ended June 30, 2024, we reported pre-tax income of $87,070. Based on a year-to-date blend of federal and State of Georgia pre-tax losses, we recorded an income tax expense of $19,200 for the three months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2024, we reported a net loss of $1.0 million or $0.01 per basic share and per fully diluted share, compared to a net loss of $846,139 or $0.01 per basic share and per fully diluted share, for the three months ended April 2, 2023, resulting in an increase of $154,185.

Current wording

For the three months ended June 30, 2024, we reported a net income of $67,870 or $0.00 per basic share and per fully diluted share, compared to net income of $512,035 or $0.01 per basic share and per fully diluted share, for the three months ended July 2, 2023, resulting in a decrease of $444,165.

Previous wording

As shown in the table above, several items impacted our year-over-year reported net income comparison for the six months ended March 31, 2024. Our reported net income for the six months ended March 31, 2024 included $1.29 million of expenses associated with a contested proxy and related matters. Our reported net income for the six months ended April 2, 2023 included $632,372 of severe weather and tornado related expenses and asset write-offs. Management believes that adjusted net loss, excluding one-time items, should be considered in evaluating the ongoing operating performance of our business. Excluding the after-tax impacts of the contested proxy and related matters for the six months ended March 31, 2024 and the tornado expenses and write-offs for the six months ended April 2, 2023, our adjusted net loss was $426,967 and $537,467, respectively, resulting in a decrease of $110,500. The lower adjusted net loss for the six months ended March 31, 2024, is primarily attributable to a $110,509 decrease in Corporate expenses, a $81,577 decrease in the segment loss for our Missouri Park, a $57,833 decrease in the segment loss for our Texas Park, a $8,634 increase in other income, a $14,633 decrease in interest expense, partially offset by a $103,653 decline in segment income for our Georgia Park, a $15,163 increase in depreciation and amortization expense, a $5,170 increase in losses on asset disposals, and a $38,700 decrease in our seasonal income tax benefit.

Current wording

As shown in the table above, several items impacted our year-over-year reported net income comparison for the three months ended June 30, 2024. Our reported net income for the three months ended June 30, 2024 included $746,570 of expenses associated with a contested proxy and related matters, $53,755 of Georgia Park tornado related insurance proceeds, and a legal settlement of $75,000. Our reported net income for the three months ended July 2, 2023 included $268,776 of net insurance proceeds associated with the Georgia Park tornado. Management believes that our adjusted net income, excluding one-time items, should be considered in evaluating the ongoing operating performance of our business. Excluding the after-tax impacts of these items, our adjusted net income was $628,375 for the three months ended June 30, 2024 compared to $315,829 for three months ended July 2, 2023, resulting in an increase of $312,546. Our higher adjusted net income for the three months ended June 30, 2024 is primarily attributable to a $463,031 increase in Georgia Park segment income, in part attributable to prior year lost revenue associated with the tornado related closure and phased reopening, a $55,211 increase in Missouri Park segment income, a $25,076 increase in Texas Park segment income, a $27,983 increase in other income, and a $7,591 decrease in interest expense, partially offset by a $93,038 increase in Corporate expenses, a $8,728 increase in depreciation and amortization expense, and a $164,580 increase in our adjusted income tax expense.

Previous wording

Results of Operations for the Six Months Ended March 31, 2024 as Compared to Six Months Ended April 2, 2023

Current wording

Results of Operations for the Nine Months Ended June 30, 2024 as Compared to Nine Months Ended July 2, 2023

Previous wording

The following table shows our consolidated and segment operating results for the six month periods ended March 31, 2024 and April 2, 2023:

Current wording

The following table shows our consolidated and segment operating results for the nine months ended June 30, 2024 and July 2, 2023:

Previous wording

Our total revenues for the six months ended March 31, 2024 totaled $3.86 million, an increase of $118,981, compared to the six months ended April 2, 2023. Our combined park revenues were $3.73 million, an increase of $58,330 or 1.6%, while animal sales were $122,351, an increase of $60,651. In mid-January 2024 we completed the strategic switch to a new ticketing platform, which we believe improves the guest experience, while also providing improved functionality for our park customer services teams. While this change had a net neutral impact on our profitability, we no longer directly up-charge customer transaction fees. On a pro forma basis, adjusting for the tornado damage closure of our Georgia Park for the final eight days during the six months ended April 2, 2023, as well as the change in accounting for customer transaction processing fees, our park revenues for the six months ended March 31, 2024 decreased by approximately 5.0%.

Current wording

Our total revenues for the nine months ended June 30, 2024 totaled $7.30 million, an increase of $717,593, compared to the nine months ended July 2, 2023. Our total park revenues were $7.09 million, an increase of $613,541 or 9.5%, while animal sales were $214,372, an increase of $104,052. In mid-January 2024 we completed the strategic switch to a new ticketing platform, which we believe improves the guest experience, while also providing improved functionality for our park customer services teams. While this change had a net neutral impact on our profitability, we no longer directly up-charge customer transaction fees. On a pro forma basis, adjusting for our Georgia Park tornado damage closure and phased reopening that extended over a roughly eight week period during the nine months ended July 2, 2023, as well as the change in accounting for customer transaction processing fees, our park revenues for the nine months ended June 30, 2024 decreased by approximately $333,800 or 4.5%.

Previous wording

Georgia park revenues were $1.04 million, a decrease of $13,986 or 1.3%, while animal sales were $12,475 compared to $0. On a pro forma basis, adjusting for the tornado damage closure and change in accounting for transaction processing fees, Georgia park revenue decreased by approximately $289,600 or 21.8%. Missouri park revenues were $400,733, an increase of $129,906 or 48.0%. Texas park revenues were $487,038, a decrease of $49,245 or 9.2%, while animal sales increased by $3,585 to $21,485.

Current wording

Georgia park revenues were $4.42 million, an increase of $360,212 or 8.9%. On a pro forma basis, adjusting for the tornado damage closure and phased reopening, as well as the change in accounting for transaction processing fees, Georgia park revenue decreased by approximately $631,300 or 12.5%. Missouri park revenues were $1.29 million, an increase of $231,621 or 21.8%, representing a 24.5% increase on a pro forma basis. Texas park revenues were $1.38 million, an increase of $21,708 or 1.6%, representing a 3.3% increase on a pro forma basis.

Previous wording

For the six months ended March 31, 2024, paid attendance at our Georgia, Missouri and Texas Parks increased by approximately 3.7%, 34.5% and 4.4%, respectively. We believe favorable weather in the three months ended December 31, 2023, benefited our Texas and Missouri Parks, however, our Georgia Park was negatively impacted by unfavorable weather during several key weekends and holidays. Each park was negatively impacted by unfavorable comparable weather in January, which had the most significant impact on attendance at our Georgia and Texas Parks. We believe our Georgia Park continues to be impacted by an increased competition in the greater Atlanta market, as well as a continuing overhang from the March 2023 tornado as we work to fully rebuild. We continue to believe that all three of our parks have benefitted from the transition to a new ad agency.

Current wording

For the nine months ended June 30, 2024, paid attendance at our Georgia, Missouri and Texas Parks increased by approximately 14.4%, 24.0% and 2.7%, respectively. We believe favorable weather in the three months ended December 31, 2023, benefited our Texas and Missouri Parks, however, our Georgia Park was negatively impacted by unfavorable weather during several key weekends and holidays. Each park was negatively impacted by unfavorable comparable weather in January, which had the most significant impact on attendance at our Georgia and Texas Parks. While higher on a reported basis due to the impact of the 2023 tornado related closure, we believe attendance at our Georgia Park continues to be negatively impacted by increased competition in the greater Atlanta market, as well as a continuing overhang from the March 2023 tornado.

Previous wording

Our segment income was 490,710 for the six months ended March 31, 2024, an increase of $35,757, compared to a segment income of $454,953 for the six months ended April 2, 2023. Our Georgia Park generated segment income of $551,487, a decrease of $103,653, primarily attributable lower park revenues and lower food service margins, partially offset by lower advertising expense. Our Missouri Park generated a segment loss of $55,828, a decrease of $81,577, primarily attributable to higher park revenues and animal sales, partially offset by higher staffing related costs, as well as higher animal food and advertising expenses. Our Texas Park generated a segment loss of $4,949, a decrease of $57,833, primarily attributable to higher animal sales and park revenues, as well as lower operating and advertising expenses, partially offset by higher animal feed and staffing related costs.

Current wording

Our segment income was $1.99 million for the nine months ended June 30, 2024, an increase of $579,075, compared to a segment income of $1.41 million for the nine months ended July 2, 2023. Our Georgia Park generated segment income of $1.72 million, an increase of $359,378, primarily attributable to higher park revenues and higher animal sales, and lower advertising expense, partially offset by lower food service margins, higher insurance expense and higher staffing related costs. Our Missouri Park generated segment income of $166,886, an increase of $136,788, primarily attributable to higher park revenues and animal sales, partially offset by higher staffing related costs, as well as higher animal feed and advertising expenses. Our Texas Park generated segment income of $102,137, an increase of $82,909, primarily attributable to higher animal sales and park revenues, as well as lower advertising and general operating expenses, partially offset by higher animal feed and staffing related costs.

Previous wording

Corporate expenses decreased by $110,509 to $510,408 during the six months ended March 31, 2024, primarily due to lower compensation related expenses and travel costs, partially offset by higher professional fees.

Current wording

Corporate expenses decreased by $17,471 to $911,490 during the nine months ended June 30, 2024, primarily due to lower other compensation related expense and travel costs, partially offset by higher severance costs and annual stockholders meeting costs.

Previous wording

Depreciation and amortization expense for the six months ended March 31, 2024 increased by $15,163, to $441,796, primarily attributable to higher depreciation expense for our Georgia Park, partially offset by lower depreciation expense for our Missouri Park.

Current wording

Depreciation and amortization expense for the nine months ended June 30, 2024 increased by $23,891, to $672,648, primarily attributable to higher depreciation expense for our Georgia and Texas Parks, partially offset by lower depreciation expense for our Missouri Park.

Previous wording

Our net loss on asset disposals for the six months ended March 31, 2024 totaled $35,754, an increase of $5,170, primarily attributable to animal deaths prior to the end of their estimated life expectancy as well as the disposal of certain assets no longer useful to the business or deemed too costly to maintain or repair.

Current wording

Our net loss on asset disposals for the nine months ended June 30, 2024 totaled $35,754, an increase of $5,170, primarily attributable to animal deaths prior to the end of their estimated life expectancy as well as the disposal of certain assets no longer useful to the business or deemed too costly to maintain or repair.

Previous wording

During the six months ended March 31, 2024, we recorded $1.29 million of expenses associated with a contested proxy contest and related matters. This includes costs associated with preparation for and conducting a Special Meeting of Stockholders held on February 26, 2024, at the request of Focused Compounding Fund, LLC (“FC”), as well as legal costs associated with a lawsuit filed in the State of Nevada by FC on March 1, 2024. See “NOTE 11. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.

Current wording

During the nine months ended June 30, 2024, we recorded $2.04 million of expenses associated with a contested proxy and related matters. This includes costs associated with preparation for and conducting a Special Meeting of Stockholders held on February 26, 2024 at the request of Focused Compounding, legal costs associated with a lawsuit filed in the State of Nevada by Focused Compounding on March 1, 2024, as well as costs leading up to and associated with the annual stockholder meeting on June 6, 2024 considered by management to be above and beyond the costs of a normal stockholders meeting. See “NOTE 11. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.

Previous wording

As a result of the tornado and severe weather damage at our Georgia Park during March 26-27, 2023, for the three months ended April 2, 2023, we recorded $381,676 of tornado related expenses, primarily due to tree and other debris removal, repairing and replacing underground water pipes throughout the property, as well as general clean-up and reopening efforts. In addition, we recorded tornado and severe weather related asset write-offs of $250,696, primarily associated with damage to various animal exhibits, several buildings, fencing and other infrastructure.

Current wording

As a result of the tornado and severe weather damage at our Georgia Park during March 26-27, 2023, for the nine months ended July 2, 2023, we recorded $779,425 of tornado related expenses, primarily due to tree and other debris removal, repairing and replacing underground water pipes throughout the property, as well as general clean-up and reopening efforts. In addition, we recorded tornado and severe weather-related asset write-offs of $271,424, primarily associated with damage to various animal exhibits, several buildings, fencing and other infrastructure. These expenses and write-offs were partially offset by $687,253 of insurance proceeds from our commercial property coverage, resulting net expenses and write-offs of $363,596 for the nine months ended July 2, 2023. During the nine months ended June 30, 2024, we received the final expected insurance proceeds of $53,755 related to the Georgia Park 2023 tornado event.

Previous wording

Other income, net for the three months ended March 31, 2024 increased by $2,360, to $34,026, attributable to higher interest income and higher mineral rights royalty income from our Texas Park property.

Current wording

Other income, net for the nine months ended June 30, 2024 increased by $36,617, to $101,325, attributable to lower non-operating expenses and higher interest income, partially offset by lower mineral rights royalty income from our Texas Park property.

Previous wording

Interest expense for the six months ended March 31, 2024 decreased by $14,633, to $100,592, attributable to a reduction in term loan interest.

Current wording

Interest expense for the nine months ended June 30, 2024 decreased by $22,224 to $147,515, attributable to a reduction in term loan interest.

Previous wording

For the three months ended March 31, 2024, we reported a pre-tax loss of $1.34 million. Based on a year-to-date blend of federal and State of Georgia pre-tax losses, we recorded an income tax benefit of $344,400 for the three months ended March 31, 2024.

Current wording

For the nine months ended June 30, 2024, we reported a pre-tax loss of $1.73 million. Based on a year-to-date blend of federal and State of Georgia pre-tax losses, we recorded an income tax benefit of $430,400 for the nine months ended June 30, 2024.

Previous wording

For the six months ended March 31, 2024, we reported a net loss of $1.37 million or $0.02 per basic share and per fully diluted share, compared to a net loss of $999,099 or $0.01 per basic share and per fully diluted share, for the six months ended April 2, 2023, resulting in an increase of $370,480.

Current wording

For the nine months ended June 30, 2024, we reported a net loss of $1.30 million or $0.02 per basic share and per fully diluted share, compared to a net loss of $487,064 or $0.01 per basic share and per fully diluted share, for the nine months ended July 2, 2023, resulting in an increase of $814,645.

Previous wording

As shown in the table above, several items impacted our year-over-year reported net income comparison for the three months ended March 31, 2024. Our reported net income for the three months ended March 31, 2024 included $1.16 million of expenses associated with a contested proxy and related matters. Our reported net income for the three months ended April 2, 2023 included $632,372 of severe weather and tornado related expenses and asset write-offs. Management believes that adjusted net loss, excluding one-time items, should be considered in evaluating the ongoing operating performance of our business. Excluding the after-tax impacts of the contested proxy and related matters for the three months ended March 31, 2024 and the tornado expenses and write-offs for the three months ended April 2, 2023, our adjusted net loss was $150,162 and $384,507, respectively, resulting in a decrease of $234,345. The lower adjusted net loss for the three months ended March 31, 2024 is primarily attributable to a $204,768 decrease in Corporate expenses, a $96,876 increase in segment income for our Missouri Park, a $3,894 increase in segment income for our Texas Park, a $9,247 decrease in losses on asset disposals, a $2,360 increase in other income, a $7,342 decrease in interest expense, partially offset by a $1,888 decline in segment income for our Georgia Park, a $9,144 increase in depreciation and amortization expense, and a $79,110 decrease in our seasonal income tax benefit.

Current wording

As shown in the table above, several items impacted our year-over-year reported net income comparison for the nine months ended June 30, 2024. Our reported net income for the nine months ended June 30, 2024 included $2.04 million of expenses associated with a contested proxy and related matters, $53,755 of Georgia Park tornado related insurance proceeds, and a legal settlement of $75,000. Our reported net income for the nine months ended July 2, 2023 included $363,596 of severe weather and tornado related expenses and asset write-offs, net of insurance proceeds. Management believes that our adjusted net income (loss), excluding one-time items, should be considered in evaluating the ongoing operating performance of our business. Excluding the after-tax impacts of these items, our adjusted net income was $201,408 for the nine months ended June 30, 2024 compared to an adjusted net loss of $221,638 for nine months ended July 2, 2023, resulting in a net improvement of $423,046. The improvement in adjusted net income for the nine months ended June 30, 2024 is primarily attributable to a $359,378 increase in Georgia Park segment income, in part attributable to prior year lost revenue associated with the tornado related closure and phased reopening, a $136,788 increase in Missouri Park segment income, a $82,909 increase in Texas Park segment income, a $17,471 decrease in Corporate expenses, a $36,617 increase in other income, and a $22,224 decrease in interest expense, partially offset by a $23,891 increase in depreciation and amortization expense, a $5,170 increase in losses on asset disposals and a $203,280 increase in our adjusted income tax expense.

Previous wording

In October 2023, we established two 12-month lines of credit totaling $800,000, primarily to provide seasonal borrowing capacity for our 2024 fiscal year, each secured by a certificate of deposit. As a result of our improved cash position, during our 2023 fiscal year we did not utilize any seasonal borrowing, nor have we used any seasonal borrowing during our 2024 fiscal year through the date of this report.

Current wording

In October 2023, we established two lines of credit totaling $800,000, primarily to provide seasonal borrowing capacity for our 2024 fiscal year, each secured by a certificate of deposit. See “NOTE 5. LINES OF CREDIT” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information. During our 2023 fiscal year we did not utilize any seasonal borrowing, nor have we used any seasonal borrowing during our 2024 fiscal year through the date of this report.

Previous wording

Our working capital was $2.04 million as of March 31, 2024, compared to $3.69 million as of October 1, 2023. The decrease in working capital primarily reflects cash used for capital investments, scheduled term loan payments, as well as expenses associated with the contested proxy and related matters during the six months ended March 31, 2024.

Current wording

Our working capital was $1.93 million as of June 30, 2024, compared to $3.69 million as of October 1, 2023. The decrease in working capital primarily reflects cash used for capital investments, scheduled term loan payments, as well as expenses associated with the contested proxy and related matters during the nine months ended June 30, 2024, partially offset by cash generated from operations excluding the contested proxy expenses.

Previous wording

Total loan debt, including current maturities, as of March 31, 2024 was $3.85 million compared to $4.23 million as of October 1, 2023. The decrease in total loan debt is the result of scheduled term loan payments during the six months ended March 31, 2024.

Current wording

Total loan debt, including current maturities, as of June 30, 2024 was $3.65 million compared to $4.23 million as of October 1, 2023. The decrease in total loan debt is the result of scheduled term loan payments during the nine months ended June 30, 2024.

Previous wording

As of March 31, 2024, we had equity of $13.69 million and total loan debt of $3.85 million, resulting in a debt to equity ratio of 0.28 to 1.0, compared to 0.28 to 1.0 as of October 1, 2023.

Current wording

As of June 30, 2024, we had equity of $13.74 million and total loan debt of $3.65 million, resulting in a debt-to-equity ratio of 0.27 to 1.0, compared to 0.28 to 1.0 as of October 1, 2023.

Previous wording

Net cash used in operating activities was $255,259 for the six months ended March 31, 2024, compared to $286,377 for the six months ended April 2, 2023, resulting in a decrease of $31,118, as our higher net loss was more than offset by lower cash used for working capital.

Current wording

Net cash used in operating activities was $63,742 for the nine months ended June 30, 2024, compared to $518,526 for the nine months ended July 2, 2023, resulting in a decrease of $454,784, as our higher net loss was more than offset by lower cash used for working capital.