PARKS AMERICA INC
For the period ended Dec 29, 2024. Filed Feb 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 29, 2024 · Filed Feb 7, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001493152-24-031601
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-29; filed 2025-02-07.
0001493152-25-005413
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 71 current paragraphs.
25 unchanged; 24 reworded; 22 added; 42 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
On January 19, 2024, following Focused Compounding’s submission to the Company, we adopted a rights plan (the “Rights Plan”), which provided, among other things, that if specified events occurred, our stockholders would be entitled to purchase additional shares of our common stock. On January 18, 2025, the Rights Plan expired pursuant to its terms.
Current report
Results of Operations
Current report
Three Months Ended December 29, 2024 compared with Three Months Ended December 31, 2023
Current report
Total Revenues and Park Revenues
Current report
Corporate expenses decreased by $47,334 to $270,352 during the three months ending December 29, 2024 primarily attributed to lower salaries and wages, director fees, and travel expenses offset by higher professional services.
Current report
During the three months ending December 29, 2024, we recorded the receipt of $567,157 of insurance proceeds from our directors and officers insurance policy associated with the contested proxy and related matters. During the three months ended December 31, 2023, we recorded contested proxy and related matters expense of $126,640. See “NOTE 3. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.
Current report
Use of Non-GAAP Financial Measures
Current report
In addition to our net income (loss) determined in accordance with GAAP, for purposes of evaluating operating performance, we report the following non-GAAP measures: Adjusted net income (loss) and Adjusted EBITDA.
Current report
We believe presenting non-GAAP financial measures provides useful information to investors, allowing them to assess how the business performed excluding the effects of significant non-recurring and non-operational items. We believe the use of the non-GAAP financial measures facilitates comparing the results being reported against past and future results by eliminating amounts that we believe are not comparable between periods and assists investors in evaluating the effectiveness of our operations and underlying business trends in a manner that is consistent with management’s own methods for evaluating business performance.
Current report
The methods we use to calculate our non-GAAP financial measures may differ significantly from methods other companies use to compute similar measures. As a result, any non-GAAP financial measures presented herein may not be comparable to similar measures provided by other companies. Adjusted net income (loss) and Adjusted EBITDA should not be used by investors or other third parties as the sole basis for formulating investment decisions as these measures may exclude a number of important cash and non-cash recurring items.
Current report
Adjusted net income (loss) is defined as net income (loss) excluding significant non-recurring or non-operational items as set forth below. While adjusted net income (loss) is a non-GAAP measurement, management believes that it is an important indicator of operating performance and useful to investors. Other significant non-recurring and non-operational items, while periodically affecting our results, may vary significantly from period to period and have disproportionate effects in a given period, which affects comparability of results and are described below:
Current report
The following table sets forth, for the periods indicated, a reconciliation of Net income (loss) to Adjusted net loss:
Current report
While Adjusted EBITDA is a non-GAAP measurement, management believes that Adjusted EBITDA is a meaningful measure as it is widely used by analysts, investors and comparable companies in the entertainment and attractions industry to evaluate our operating performance on a consistent basis, as well as more easily compare our results with those of other companies in our industry. We also believe Adjusted EBITDA is a meaningful measure of park-level operating profitability. Adjusted EBITDA is a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under GAAP.
Current report
Other significant items, while periodically affecting our results, may vary significantly from period to period and have disproportionate effects in a given period, which affects comparability of results and are described below:
Current report
The following table sets forth, for the periods indicated, selected income statement data and a reconciliation of our Net income (loss) to Adjusted EBITDA:
Current report
Net cash used in operating activities was $54,797 for the three months ended December 29, 2024, compared to $91,075 for the three months ended December 31, 2023, resulting in a decrease of $36,278, as our increase in net income was more than offset by higher cash used for working capital, primarily accounts payable, as our directors and officers insurance proceeds gain was used to pay down accounts payable associated with the contested proxy and related matters. See “NOTE 3. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.
Current report
Net cash provided in investing activities was $260,966 for the three months ended December 29, 2024, compared to net cash used in investment activities of $1,216,168 for the three months ended December 31, 2023, resulting in a net increase of $1,477,134. Our investing activity for the three months ended December 29, 2024 included cash provided of $838,442 from short-term investments in certificates of deposit which matured during the period. Our investing activity for the three months ended December 31, 2023 included cash used of $1.0 million for the purchase of short-term investments in certificates of deposit. Our capital spending for the three months ended December 29, 2024 was $601,476 compared to $230,166 for the three months ended December 31, 2023. The increase in capital spending is attributed to capital improvements, primarily construction of a new restroom facility and animal exhibit improvements, at our Georgia Park.
Current report
Net cash used in financing activities was $34,261 for the three months ended December 29, 2024, compared to $195,170 for the three months ended December 31, 2023, resulting in a decrease of $160,909. During the three months ended December 29, 2024, the 2020 term loan was refinanced with the 2025 term loan resulting in net cash provided of $49,693, after term loan fees, offset by scheduled term loan principal payments.
Current report
Borrowing Agreements
Current report
On September 30, 2024, Aggieland-Parks, Inc. completed a refinancing transaction (the “2025 Refinancing”) with Cendera Bank N.A. (“Cendera”). The 2025 Refinancing included a term loan in the original principal amount of $2.5 million (the “2025 Term Loan). The 2025 Term Loan bears interest at a daily adjusted rate equal to the Prime Rate minus 0.5%. As of December 29, 2024 the effective interest rate was at 7.0%. The 2025 Term Loan has a term of 10 years, with a 15-year amortization, and a balloon payment of the outstanding principal balance due September 30, 2034. The initial monthly loan payment is $23,200. Aggieland-Parks, Inc. paid approximately $60,735 of fees and expenses in connection with the 2025 Term Loan. The 2025 Term Loan is secured by substantially all the assets of Aggieland-Parks, Inc., as well as a cash collateral reserve of $2.5 million established by Focused Compounding Fund, LP, with Cendera. Geoffrey Gannon and Andrew Kuhn control Focused Compounding Fund, LP, and each serve on the Board of the Company, and Mr. Gannon is the Company’s President. Focused Compounding did not receive a fee or any other benefit in connection with establishing the above-described cash collateral reserve. See “NOTE 4. LONG-TERM DEBT” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.
Current report
Recent Accounting Pronouncements
Current report
See Part I, Item 1, Note 2,Recently Issued Accounting Pronouncements Not Yet Adopted, of the Consolidated Financial Statements (Unaudited) included in this Quarterly Report on Form 10-Q for information regarding recent accounting pronouncements.
Removed paragraphs (42)
Previous report
During March 26-27, 2023, our Georgia Park experienced extensive damage, caused by an EF-3 tornado and over nine inches of rain, resulting in more than 4,500 fallen trees and damage to many of the Park’s animal enclosures, fencing and other infrastructure. The Walkabout Adventure Zoo (“Walkabout”) portion of the property was particularly hard hit. Our Georgia Park was closed for 20 days, including for most of its traditionally busy spring break period, which has historically comprised approximately 10%-15% of its annual revenue. The drive-through safari section of the Georgia Park reopened on April 15th. The Walkabout portion of the Park reopened in phases, with the first phase on May 6th and the second phase on July 2nd. Approximately one-quarter of the Walkabout remains closed.
Previous report
As a result of the near-term needs associated with the tornado recovery effort at our Georgia Park, we revised our 2023 fiscal year capital investment plan. Two significant new marketable attractions in our Georgia Park Walkabout, an enhanced ring-tailed lemur exhibit and new aviary, featuring macaws and a budgie parrot feeding experience, were not significantly impacted by the tornado event and opened on May 6, 2023. In addition, a new marquee otter exhibit opened in May 2023 at our Missouri Park Walkabout and a fourth drive-through pasture at our Texas Park opened in early March 2023, allowing guests to feed zebras and camels directly from their vehicles.
Previous report
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 report
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 report
Our 2024 fiscal year capital spending plan was initially targeted at $1.4 million, however, will likely come in closer to $1.0 million due to the timing of completion of the new restroom building and entry portal at our Georgia Park.
Previous report
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 report
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 report
Total Revenues
Previous report
Corporate expenses increased by $93,038 to $401,082 during the three months ended June 30, 2024, primarily due to higher severance costs and annual stockholders meeting costs, partially offset by lower other compensation expense.
Previous report
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 report
Tornado Expenses and Write-offs, Net
Previous report
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 report
Legal Settlement
Previous report
During the three months ended June 30, 2024, we entered into a settlement agreement and paid $75,000 to settle a lawsuit initiated by a former employee alleging several instances of employment discrimination. See “NOTE 9. COMMITMENTS AND CONTINGENCIES” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.
Previous report
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 report
Total Revenues
Previous report
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 report
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 report
Segment Income
Previous report
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 report
Corporate Expenses
Previous report
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 report
Depreciation and Amortization Expense
Previous report
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 report
Loss on Asset Disposals, Net
Previous report
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 report
Contested Proxy and Related Matters
Previous report
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 report
Tornado Expenses and Write-offs, Net
Previous report
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 report
Legal Settlement
Previous report
During the nine months ended June 30, 2024, we entered into a settlement agreement and paid $75,000 to settle a lawsuit initiated by a former employee alleging several instances of employment discrimination. See “NOTE 9. COMMITMENTS AND CONTINGENCIES” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Quarterly Report for additional information.
Previous report
Other Income, Net
Previous report
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 report
Interest Expense
Previous report
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 report
Income Taxes
Previous report
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 report
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 report
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.
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Reworded paragraphs (24)
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 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 September 29, 2024 filed with the United States Securities and Exchange Commission (“SEC”) on December 13, 2024. As used in this Quarterly Report on Form 10-Q, references to the “Company”, “we”, “our” and similar terms refer to Parks! America, Inc. and its wholly owned subsidiaries. Our fiscal year ends on the Sunday closest to September 30.
Previous wording
Our actual results may differ significantly from those projected in the forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the risks outlined under “Risk Factors” in this Quarterly Report, that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include, but are not limited to: competition from other parks, inclement weather conditions during our primary tourist season, the price of animal feed and the price of gasoline. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot guarantee future results, levels of activity, performance or achievements.
Current wording
Forward-looking statements are based on beliefs and assumptions made by management using currently available information and are only predictions and are not guarantees of future performance, actions or events. Our actual results may differ significantly from those projected in the forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including, but not limited to, risks that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. For example, assumptions that could cause actual results to vary materially from future results include but are not limited to: competition from other parks, inclement weather conditions during our primary tourist season, the price of animal feed and the price of gasoline. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, we cannot guarantee future results, levels of activity, performance or achievements. These risks and uncertainties include those risks, uncertainties and factors discussed in the “Risk Factors” section of our Annual Report on Form 10-K for the fiscal year ended September 29, 2024, and “Part II, Item 1A Risk Factors” of this Quarterly Report on Form 10-Q.
Previous wording
The forward-looking statements we make in this Quarterly Report are based on management’s current views and assumptions regarding future events and speak only as of the date of this report. We assume no obligation to update any of these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements, except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission.
Current wording
The forward-looking statements we make in this Quarterly Report are based on management’s current views and assumptions regarding future events and speak only as of the date of this report. We assume no obligation to update any of these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting these forward-looking statements, except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC.
Previous wording
Through our wholly owned subsidiaries, we own and operate three regional theme parks and are in the business of acquiring, developing and operating local and regional theme parks and attractions in the United States. Our wholly owned subsidiaries are Wild Animal Safari, Inc., a Georgia corporation (“Wild Animal – Georgia”), Wild Animal, Inc., a Missouri corporation (“Wild Animal – Missouri”), and Aggieland-Parks, Inc., a Texas corporation (“Aggieland Wild Animal – Texas”). Wild Animal – Georgia owns and operates the Wild Animal Safari theme park in Pine Mountain, Georgia (the “Georgia Park”). Wild Animal – Missouri owns and operates the Wild Animal Safari theme park located in Strafford, Missouri (the “Missouri Park”). Aggieland Wild Animal – Texas owns and operates the Aggieland Wild Animal Safari theme park near Bryan/College Station, Texas (the “Texas Park”).
Current wording
Through our wholly owned subsidiaries, we own and operate three regional safari parks and are in the business of acquiring, developing and operating local and regional entertainment assets in the United States. Our wholly owned subsidiaries are Wild Animal Safari, Inc., a Georgia corporation (“Wild Animal – Georgia”), Wild Animal, Inc., a Missouri corporation (“Wild Animal – Missouri”), and Aggieland-Parks, Inc., a Texas corporation (“Aggieland Wild Animal – Texas”). Wild Animal – Georgia owns and operates the Wild Animal Safari park in Pine Mountain, Georgia (the “Georgia Park”). Wild Animal – Missouri owns and operates the Wild Animal Safari park located in Strafford, Missouri (the “Missouri Park”). Aggieland Wild Animal – Texas owns and operates the Aggieland Wild Animal Safari park near Bryan/College Station, Texas (the “Texas Park”).
Previous wording
Our parks are open year round, but experience increased seasonal attendance, typically beginning in the latter half of March through early September. Combined third and fourth quarter park revenues were 60.4% and 62.1% of annual park revenues for our 2023 and 2022 fiscal years, respectively. Since the acquisition of our Texas Park, the combined third and fourth quarter concentration of our park revenues has been reduced.
Current wording
Our parks are open year-round and experience increased seasonal attendance, typically beginning in the latter half of March through early September. Combined third and fourth quarter park revenues were 61.4% and 60.4% of annual park revenues for our 2024 and 2023 fiscal years, respectively.
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 Focused Compounding’s proposal to reconstitute the Board of Directors did not pass.
Current wording
On December 22, 2023, Focused Compounding Fund, LP (together with the participants in its solicitation, “Focused Compounding”) submitted documents to the Company providing 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 received the votes of a majority of shareholders who voted, but not a sufficient majority for approval under Nevada law, so it 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. 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.
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 as 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
On June 14, 2024, we announced that Lisa Brady stepped down as its President and Chief Executive Officer, and the Company’s Board had appointed Geoffery Gannon as the Company’s President. Mr. Gannon is also the Portfolio Manager at Focused Compounding.
Current wording
On June 14, 2024, the Company announced that Lisa Brady stepped down as its President and Chief Executive Officer, and the Company’s Board had appointed Geoffrey Gannon as the Company’s President. Mr. Gannon is also the Portfolio Manager at Focused Compounding.
Previous wording
We engaged legal counsel specializing in activist stockholder matters, as well as several other consultants, during this proxy contest and for the nine months ended June 30, 2024, we incurred $2.04 million of associated expenses. As of June 30, 2024, we had approximately $940,000 of unpaid expenses associated with the contested proxy matter. We are working with our directors and officers insurance carrier regarding potential insurance coverage related to the expenses associated with the contested proxy and related matters.
Current wording
We engaged legal counsel specializing in activist stockholder matters, as well as several other consultants, during this proxy contest and for the fiscal year ended September 29, 2024, we incurred $2.04 million of associated expenses, net. We have been engaged in discussions with our directors and officers insurance carrier regarding potential insurance coverage related to the expenses associated with the contested proxy and related matters. During the three months ending December 29, 2024, we received approximately $567,000 of insurance proceeds under our directors and officers insurance, which we used to pay certain bills associated with the contested proxy and related matters. As of December 29, 2024, we had approximately $360,500 of unpaid bills associated with the contested proxy and related matters. We continue in discussions with our directors and officers insurance carrier regarding potential insurance coverage related to the remaining unreimbursed expenses associated with the contested proxy and related matters. See “NOTE 3. CONTESTED PROXY AND RELATED MATTERS” of the Notes to the Consolidated Financial Statements (Unaudited) included in this Annual Report on Form 10-Q for additional information.
Previous wording
Results of Operations for the Three Months Ended June 30, 2024 as Compared to Three Months Ended July 2, 2023
Current wording
Consolidated and Segment Results of Operations for the Three Months Ended December 29, 2024 as Compared to Three Months Ended December 31, 2023
Previous wording
We manage our operations on an individual location basis. Discrete financial information is maintained for each park and provided to our corporate management for review and as a basis for decision-making. The primary performance measure used to allocate resources are park earnings before interest, taxes, depreciation and amortization expenses (commonly referred to as “EBITDA”). We use EBITDA as a measure of operating profit to gauge segment performance because we believe this measure is the most indicative of performance trends and the overall earnings potential of each segment.
Current wording
We manage our operations on an individual park location basis. Discrete financial information is maintained for each park and provided to our President, as Chief Operating Decision Maker, for review and as a basis for decision making. The primary performance measures used to allocate resources are park earnings before interest, tax, depreciation and amortization, and free cash flow. We use park earnings before interest, tax, depreciation and amortization, and free cash flow as a measure of profitability to gauge segment performance because we believe this measure is the most indicative of performance trends and overall earnings potential of each segment.
Previous wording
The following table shows our consolidated and segment operating results for the three months ended June 30, 2024 and July 2, 2023:
Current wording
The following table presents our consolidated and segment operating results for the three months ended December 29, 2024 and December 31, 2023:
Previous 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%.
Current wording
Our total revenues for the three months ended December 29, 2024 totaled $1.77 million, a decrease of $127,167, compared to the three months ended December 31, 2023. Our total park revenues were $1.72 million, a decrease of $90,204 or 5.0%, while animal sales were $51,428, a decrease of $36,963. 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 this change in accounting for customer transaction processing fees, our total park revenues for the three months ended December 29, 2024 decreased by approximately $39,400 or 2.2%.
Previous wording
Georgia park revenues were $2.17 million, an increase of $453,369 or 26.5%. 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 $182,100 or 7.8%. Missouri park revenues were $668,097, an increase of $97,209 or 17.0%, representing a 20.0% increase on a pro forma basis. Texas park revenues were $522,052, an increase of $4,633 or 0.9%, representing a 2.6% increase on a pro forma basis.
Current wording
Georgia park revenues were $1.08 million, a decrease of $133,250 or 11.0%. On a pro forma basis, adjusting for the change in accounting for transaction processing fees, Georgia park revenue decreased by approximately 8.3%. Missouri park revenues were $275,731, an increase of $51,459 or 22.9%, representing a 27.3% increase on a pro forma basis. Texas park revenues were $360,379, a decrease of $8,413 or 2.3%, representing flat revenues on a pro forma basis.
Previous 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.
Current wording
For the three months ended December 29, 2024, attendance at our Missouri Park increased by approximately 16.1% compared to the prior year. Our Georgia Park attendance decreased approximately 13.6% compared to the prior year. 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. Our Texas Park provided customers with free admissions promotions on certain days during the three months ended December 29, 2024 and we do not believe attendance is a comparable to the prior year.
Previous 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.
Current wording
Our segment income was $232,719 for the three months ended December 29, 2024, an increase of $9,670, compared to a segment income of $223,049 for the three months ended December 31, 2023. Our Georgia Park generated segment income of $333,946 million, a decrease of $31,896 primarily attributable to lower park revenues offset by lower operating expenses, primarily advertising expenses and transaction processing fees. Our Missouri Park generated segment operating loss of $49,228, a decrease of $57,540, primarily attributable to an increase in park revenues. Our Texas Park generated segment operating loss of $51,999, an increase of $15,974, primarily attributable to lower animal sales revenue and higher staffing-related costs offset by lower advertising expenses.
Previous 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.
Current wording
Depreciation and amortization expense for the three months ended December 29, 2024 decreased by $14,655, to $208,548, primarily attributable to lower depreciation expense for our Texas Park.
Previous 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.
Current wording
Other income, net for the three months ended December 29, 2024 decreased by $22,505, to $13,382, attributable to non-operating expenses and lower interest income.
Previous 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.
Current wording
Interest expense for the three months ended December 29, 2024 increased by $6,024, to $57,469, attributable to an increase in term loan interest.
Previous 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.
Current wording
For the three months ended December 29, 2024, we reported pre-tax income of $276,941. Based on a year-to-date blend of federal and State of Georgia pre-tax income, we recorded an income tax expense of $83,900 for the three months ended December 29, 2024.
Previous 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.
Current wording
As a result of the above factors, for the three months ended December 29, 2024, we reported a net income of $193,041 or $0.00 per basic share and per fully diluted share, compared to net loss of $369,255 or $0.00 per basic share and per fully diluted share, for the three months ended December 31, 2023.
Previous 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.
Current wording
Our working capital was $1.91 million as of December 29, 2024, compared to $1.60 million as of September 29, 2024. The increase in working capital primarily reflects a reduction in accounts payable as a result of the contested proxy insurance proceeds, offset by cash used for capital spending and scheduled term loan payments.
Previous 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.
Current wording
Total loan debt, including current maturities, as of December 29, 2024 was $3.47 million compared to $3.50 million as of September 29, 2024. The decrease in total loan debt is primarily the result of scheduled term loan payments during the three months ended December 29, 2024.
Previous 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.
Current wording
As of December 29, 2024, we had equity of $14.14 million and total loan debt of $3.47 million, resulting in a debt-to-equity ratio of 0.25 to 1.0, compared to 0.25 to 1.0 as of September 29, 2024.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Results of Operations for the Nine Months Ended June 30, 2024 as Compared to Nine Months Ended July 2, 2023
Previous report — wording carried elsewhere
The following table shows our consolidated and segment operating results for the nine months ended June 30, 2024 and July 2, 2023:
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
Net Income (Loss) and Income (Loss) Per Share
Previous report — wording carried elsewhere
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.