Malibu Grand Prix Shows First Profit as Public Firm
Malibu Grand Prix, reporting its first quarterly profit since becoming a public company in early 1984, said Monday it earned $148,000 in its second quarter despite a 12% decline in revenue, to $8.0 million.
The profit, which amounted to 1 cent a share, was a reversal from a loss of $1.1 million, or 9 cents a share, in the same quarter of 1985.
The Woodland Hills-based operator of recreation centers also said it closed a previously announced deal that wiped out its $24-million debt to a creditors’ committee. To satisfy creditors, Malibu paid $3.2 million in cash and issued 4.9 million shares of preferred stock and a warrant that could be used to acquire 20% of Malibu at $1 a share.
Malibu said it also restructured another $16.8 million in bank debt over the next five years. The $16.8-million debt is to Bracton Corp., a former unit of Crocker National Bank that now is part of Midland Bank, Crocker’s former parent. Bracton also dominates the creditors’ committee, holding 60% of the $24-million note.
The financial restructuring moves improved Malibu’s shareholders’ equity by $15 million, but still leaves it with a negative net worth of about $7 million. Canadian businessman Ira Young retains a majority interest in Malibu, according to Gary Rudolph, vice president for operations.
Malibu hasn’t been profitable since Young and another Canadian, Nelson Skalbania, bought the company from Warner Communications Dec. 31, 1983. Through a merger, Malibu went public in April, 1984.
Rudolph said the quarterly profit was achieved by cutting costs. He attributed the lower revenue partly to the closing of three Malibu facilities in 1985. The company’s general counsel, Walt Harasty, said Malibu probably will close its Anaheim facility in about a month.
Malibu owns 43 recreation centers featuring miniature Grand Prix race tracks, miniature golf and electronic video games.
For the first six months of its fiscal year, Malibu lost $933,000, or 7 cents a share, versus a loss of $3.6 million, or 28 cents a share, a year ago. Revenue was $13.9 million, down 8%.
