-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, HmNX6+xujYgBVZjkD4k8wK7HWJrYVKBz39UnFxFogC0Q77h5xSJyDmuplq8OdR/p pe5Uj6JhdC5W/WjkFil0Dw== 0000950152-95-000662.txt : 19950427 0000950152-95-000662.hdr.sgml : 19950427 ACCESSION NUMBER: 0000950152-95-000662 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950305 FILED AS OF DATE: 19950418 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRISCHS RESTAURANTS INC CENTRAL INDEX KEY: 0000039047 STANDARD INDUSTRIAL CLASSIFICATION: 5812 IRS NUMBER: 310523213 STATE OF INCORPORATION: OH FISCAL YEAR END: 0530 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07323 FILM NUMBER: 95529319 BUSINESS ADDRESS: STREET 1: 2800 GILBERT AVE CITY: CINCINNATI STATE: OH ZIP: 45206 BUSINESS PHONE: 5139612660 MAIL ADDRESS: STREET 1: 2800 GILBERT AVE CITY: CINCINNATI STATE: OH 10-Q 1 FRISCH'S RESTAURANT, INC. 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 FOR QUARTER ENDED MARCH 5, 1995 COMMISSION FILE NUMBER 1-7323 FRISCH'S RESTAURANTS, INC. - - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) OHIO 31-0523213 - - ---------------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2800 GILBERT AVENUE, CINCINNATI, OHIO 45206 - - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 513-961-2660. ------------------------- Not Applicable - - ------------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- The total number of shares outstanding of the issuer's no par common stock, as of March 31, 1995 was: 6,618,952 2 TABLE OF CONTENTS
PAGE PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF EARNINGS ................. 3 CONSOLIDATED BALANCE SHEET ......................... 4 - 5 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY ..... 6 CONSOLIDATED STATEMENT OF CASH FLOWS ............... 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ......... 8 - 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .................. 13 PART II - OTHER INFORMATION 13 - 14
3 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
Forty Weeks Ended Twelve Weeks Ended ------------------------------- ---------------------------------- March 5, March 6, March 5, March 6, 1995 1994 1995 1994 ------------ ------------ ------------- ------------- REVENUE Sales $123,095,656 $121,119,807 $34,323,812 $33,457,933 Other 1,283,290 1,633,994 346,208 627,283 ------------ ------------ ------------- ------------- Total revenue 124,378,946 122,753,801 34,670,020 34,085,216 COSTS AND EXPENSES Cost of sales Food and paper 39,348,615 39,239,605 11,400,622 11,105,656 Payroll and related 42,744,513 40,290,881 12,486,542 11,545,283 Other operating costs 31,400,516 28,923,172 9,645,570 8,622,277 ------------ ------------ ------------- ------------- 113,493,644 108,453,658 33,532,734 31,273,216 General and administrative 3,737,557 4,476,015 1,209,019 1,082,955 Advertising 3,048,821 2,951,511 847,580 830,145 Interest 1,506,513 1,179,867 530,901 377,046 ------------ ------------ ------------- ------------- Total costs and expenses 121,786,535 117,061,051 36,120,234 33,563,362 ------------ ------------ ------------- ------------- Earnings (loss) before income taxes 2,592,411 5,692,750 (1,450,214) 521,854 INCOME TAXES 778,000 2,078,000 (698,000) 191,000 ------------ ------------ ------------- ------------- NET EARNINGS (LOSS) $ 1,814,411 $ 3,614,750 ($ 752,214) $ 330,854 ============ ============ ============= ============= Primary and fully diluted net earnings (loss) per share of common stock $.27 $.55 ($.11) $.05 ============ ============ ============= ============= The accompanying notes are an integral part of these statements.
3 4 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
ASSETS March 5, May 29, 1995 1994 (unaudited) ----------- ----------- CURRENT ASSETS Cash $ 496,286 $ 200,900 Receivables Trade 1,299,108 1,194,231 Other 583,044 1,210,287 Inventories 4,109,991 3,571,655 Prepaid expenses and sundry deposits 2,115,616 1,788,928 Prepaid and deferred income taxes 760,992 465,181 ----------- ----------- Total current assets 9,365,037 8,431,182 PROPERTY, EQUIPMENT AND CAPITALIZED LEASES - AT COST Land and improvements 22,494,107 20,297,436 Buildings 50,168,003 47,006,784 Equipment and fixtures 51,485,990 49,265,878 Leasehold improvements and buildings on leased land 23,814,895 22,658,295 Capitalized leases 10,195,505 10,775,208 Construction in progress 4,563,427 2,471,385 ----------- ----------- 162,721,927 152,474,986 Less accumulated depreciation and amortization 68,474,776 66,225,550 ----------- ----------- 94,247,151 86,249,436 OTHER ASSETS Intangible assets 766,032 769,167 Investments in land - at cost 665,074 665,074 Property held for sale 2,004,237 2,329,004 Net cash surrender value-life insurance policies 3,102,253 2,849,223 Deferred income taxes 282,722 282,722 Other 2,270,689 2,532,324 ----------- ----------- 9,091,007 9,427,514 ----------- ----------- $112,703,195 $104,108,132 =========== =========== The accompanying notes are an integral part of these statements.
4 5 LIABILITIES
March 5, May 29, 1995 1994 (unaudited) ------------- ------------ CURRENT LIABILITIES Long-term obligations due within one year Long-term debt $ 1,904,563 $ 337,045 Obligations under capitalized leases 511,521 546,951 Self insurance 1,394,936 1,239,652 Accounts payable 8,091,348 8,409,909 Accrued expenses 5,577,004 5,630,561 Income taxes -- 36,102 ------------- ------------ Total current liabilities 17,479,372 16,200,220 LONG-TERM OBLIGATIONS Long-term debt 17,049,568 10,717,691 Obligations under capitalized leases 6,633,163 7,021,974 Self insurance 5,129,154 4,546,152 Other 2,172,522 2,033,207 ------------- ------------ 30,984,407 24,319,024 COMMITMENTS -- -- SHAREHOLDERS' EQUITY Capital stock Preferred stock - authorized, 3,000,000 shares without par value; none issued -- -- Common stock - authorized, 12,000,000 shares without par value; issued, 6,808,939 and 6,548,201 shares - stated value - $1 6,808,939 6,548,201 Additional contributed capital 54,624,224 52,188,112 ------------- ------------ 61,433,163 58,736,313 Retained earnings 6,234,399 8,299,729 ------------- ------------ 67,667,562 67,036,042 Less cost of treasury stock (189,987 and 183,457 shares) 3,428,146 3,447,154 ------------- ------------ 64,239,416 63,588,888 ------------- ------------ $112,703,195 $104,108,132 ============= ============
5 6 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FORTY WEEKS ENDED MARCH 5, 1995 AND MARCH 6, 1994 (UNAUDITED)
Common stock at $1 per share - Additional Shares and contributed Retained Treasury amount capital earnings shares Total ------------ ------------- ------------ ----------- ------------- Balance at May 30, 1993 $6,297,536 $48,591,962 $8,597,646 ($3,429,035) $60,058,109 Net earnings for forty weeks -- -- 3,614,750 -- 3,614,750 Treasury shares reissued -- (8,327) -- 52,578 44,251 Treasury shares acquired -- -- -- (20,670) (20,670) Dividends Cash - $.18 per share -- -- (1,136,262) -- (1,136,262) Stock - 4% 250,665 3,604,563 (3,855,228) -- -- ------------ ------------- ------------ ----------- ------------- Balance at March 6, 1994 6,548,201 52,188,198 7,220,906 (3,397,127) 62,560,178 Net earnings for twelve weeks -- -- 1,460,824 -- 1,460,824 Treasury shares reissued -- (86) -- 395 309 Treasury shares acquired -- -- -- (50,422) (50,422) Dividends Cash - $.06 per share -- -- (382,001) -- (382,001) ------------ ------------- ------------ ----------- ------------- Balance at May 29,1994 6,548,201 52,188,112 8,299,729 (3,447,154) 63,588,888 Net earnings for forty weeks -- -- 1,814,411 -- 1,814,411 Treasury shares reissued -- (9,610) -- 23,771 14,161 Treasury shares acquired -- -- -- (4,763) (4,763) Dividends Cash - $.18 per share -- -- (1,173,281) -- (1,173,281) Stock - 4% 260,738 2,445,722 (2,706,460) -- -- ------------ ------------- ------------ ----------- ------------- Balance at March 5, 1995 $6,808,939 $54,624,224 $6,234,399 ($3,428,146) $64,239,416 ============ ============= ============ =========== ============= The accompanying notes are an integral part of these statements.
6 7 FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS FORTY WEEKS ENDED MARCH 5, 1995 AND MARCH 6, 1994 (UNAUDITED)
1995 1994 -------------- -------------- CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES: Net income $ 1,814,411 $ 3,614,750 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 7,510,907 7,075,886 (Gain) Loss on disposition of assets (190,030) 498,998 Write off Texas goodwill -- 886,447 Changes in assets and liabilities: Decrease (increase) in receivables 522,366 (672,417) (Increase) decrease in inventories (538,336) 93,653 (Increase) decrease in prepaid expenses and sundry deposits (326,688) 336,392 Increase in prepaid income taxes (295,811) (786,264) Decrease in accounts payable (318,561) (448,039) Decrease in accrued expenses (53,557) (846,447) Decrease in income taxes (36,102) (235,393) Decrease (increase) in other assets 266,305 (336,435) Increase in self insured obligations 738,286 755,866 Increase in other liabilities 302,035 292,908 -------------- -------------- Net cash provided by operating activities 9,395,225 10,229,905 CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: Additions to property (16,968,507) (13,735,828) Proceeds from disposition of property 1,829,572 1,282,435 Increase in other assets (272,175) (426,902) -------------- -------------- Net cash (used in) investing activities (15,411,110) (12,880,295) CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Proceeds from borrowings 8,135,000 4,000,000 Payment of long-term obligations (659,846) (587,956) Cash dividends paid (1,173,281) (1,136,262) Treasury share transactions 9,398 23,581 -------------- -------------- Net cash provided by financing activities 6,311,271 2,299,363 -------------- -------------- Net increase (decrease) in cash and equivalents 295,386 (351,027) Cash and equivalents at beginning of year 200,900 546,677 -------------- -------------- Cash and equivalents at end of quarter $ 496,286 $ 195,650 ============== ============== Supplemental disclosures: Stock dividends issued $ 2,706,460 $ 3,855,228 Interest paid 1,499,593 1,149,882 Income taxes paid 1,243,233 3,102,322 Income tax refunds received (133,320) (2,665) Lease transactions capitalized -- 179,640 The accompanying notes are an integral part of these statements.
7 8 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE A - ACCOUNTING POLICIES A summary of the Company's significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: CONSOLIDATION PRACTICES The consolidated financial statements include the accounts of Frisch's Restaurants, Inc. and all of its subsidiaries. CASH AND CASH EQUIVALENTS Highly liquid investments with original maturities of three months or less are considered to be cash equivalents. Outstanding checks in the amount of $888,109 at May 29, 1994 were included in accounts payable. RECEIVABLES The Company values its trade notes and accounts receivable on the reserve method. The reserve balance was $62,736 at March 5, 1995 and $36,349 at May 29, 1994. INVENTORIES Inventories are valued at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. During the quarter ended September 18, 1994 the Company changed its method of accounting for its commissary inventories from the last-in, first-out (LIFO) method to the FIFO method with an immaterial effect on the annual financial statements. INCOME TAXES Taxes are provided on all items included in the statement of earnings regardless of when such items are reported for tax purposes. PROPERTY AND EQUIPMENT Depreciation is provided principally on the straight-line method over the estimated service lives of the assets. INTANGIBLE ASSETS The excess of cost over equity in net assets of subsidiaries acquired prior to November 1, 1970, is not currently being amortized because, in the opinion of management, the value has not decreased. Due to changed business conditions, plans for the development of Company operated or franchised Big Boy restaurants in the state of Texas ceased during the year ended May 29, 1994. Accordingly, the remaining goodwill of $886,447 ascribed to the acquisition of Big Boy licensing rights for Texas was charged against earnings during the quarter ended September 19, 1993. NEW STORE OPENING COSTS New store opening costs are capitalized and amortized over a one year period from the date each new store opened. Items capitalized include new employee training costs, the cost of an employee team to coordinate the opening and the cost of certain replacement items such as uniforms and china. BENEFIT PLANS The Company has three defined benefit pension plans covering substantially all of its employees. The benefits are based on years-of-service and other factors. The Company's funding policy is to contribute annually the maximum 8 9 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE A - ACCOUNTING POLICIES (CONTINUED) amount that can be deducted for federal income tax purposes. Contributions are intended to provide not only for benefits attributed to service-to-date, but also for those expected to be earned in the future. SELF INSURANCE The Company self-insures its casualty and a portion of its employee medical coverages. The amounts shown on the balance sheet represent management's estimate for future claims. There is insurance in place which provides for catastrophic losses. REVENUE RECOGNITION Franchise fees, based on sales of franchisees, are recorded on the accrual method as earned. There was no significant income from initial fees. INVESTMENT IN SPORTS FRANCHISE The Company's limited partnership investment in the Cincinnati Reds is carried at cost. An income distribution of $210,000 was recorded in earnings when received in the quarter ended March 6, 1994. A distribution has not been received in 1995. RECLASSIFICATION Last year's financial statements have been reclassified to conform to the 1995 presentation.
NOTE B - LONG-TERM DEBT March 5, 1995 May 29, 1994 -------------------------- -------------------------- Payable Payable Payable Payable within after within after one year one year one year one year -------- -------- -------- -------- (in thousands) Industrial revenue bond financing $ 200 $ 600 $200 $ 600 Revolving credit loan - 6,000 - 10,000 Term loan 1,500 10,250 - - Other 205 200 137 118 ------ ------- ---- ------- $1,905 $17,050 $337 $10,718 ====== ======= ==== =======
The portion payable after one year matures as follows: March 5, May 29, 1995 1994 ------------ ----------- (in thousands) Period ending in 1996 $ - $ 275 1997 1,841 10,224 1998 7,759 219 1999 1,700 - 2000 1,500 - Subsequent to 2000 4,250 - ------- ------- $17,050 $10,718 ======= =======
9 10 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE B - LONG-TERM DEBT (CONTINUED) The revolving credit loan is a $10,000,000 line of credit, $6,000,000 of which is outstanding at March 5, 1995. This credit loan matures on August 30, 1997, unless extended. Interest is payable quarterly determined by various indices, currently 7.28%. The term loan, converted from a revolving credit loan during the quarter ended December 11, 1994, is payable in monthly installments of $125,000 through December 31, 2002. Interest is also payable monthly at a rate equal to the prime rate up to a maximum of 7.5% through December 31, 1997. The rate for the final five years shall also be equal to the prime rate, not to exceed 8.5%. These agreements contain covenants relating to net worth, interest expense, debt and capitalization changes, investments and leases. Compensating balances are not required. The Company also has a $2,694,000 outstanding letter of credit in support of its self insurance. The industrial revenue bonds, issued in 1978, are payable in annual installments of $200,000 through 1998 and bear interest at 7.3% to 7.4%. Property and equipment having a book value at March 5, 1995 of $2,804,000 is pledged as collateral for the bonds. NOTE C - LEASED PROPERTY The Company has capitalized the leased property of 50% of its non-owned restaurant locations. The majority of the leases are for fifteen or twenty years and contain renewal options for ten to fifteen years. Delivery equipment is held under capitalized leases expiring during periods to 2001. The Company also occupies office space under an operating lease which expires during 2003. An analysis of the leased property follows:
Asset balances at ------------------------ Mar. 5, May 29, 1995 1994 ------- ------ (in thousands) Restaurant facilities $ 9,715 $ 9,715 Equipment 481 1,060 ------- ------ 10,196 10,775 Less accumulated amortization (5,402) (5,511) ------- ------- $ 4,794 $ 5,264 ======= =======
Total rental expense of operating leases for the forty weeks was:
1995 1994 ------ ------ (in thousands) Minimum rentals $1,269 $1,307 Contingent rentals (percent of excess sales) 27 90 ------ ------ $1,296 $1,397 ====== ======
10 11 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE C - LEASED PROPERTY (CONTINUED) Future minimum lease payments under capitalized leases and operating leases having an initial or remaining term of one year or more follow:
Capitalized Operating Period ending March 5, leases leases ---------------------- ----------- --------- (in thousands) 1996 $1,282 $1,368 1997 1,212 1,239 1998 1,085 1,118 1999 978 926 2000 902 780 2000 to 2010 8,096 3,655 ------ ------ Total 13,555 $9,086 ====== Amount representing interest (6,410) ------ Present value of obligations 7,145 Portion due within one year (512) ------ Long-term obligations $6,633 ======
NOTE D - INCOME TAXES The provision for income taxes in all periods has been computed based on management's estimate of the tax rate for the entire fiscal year. During the quarter ended March 5, 1995, the estimated tax rate was changed from 36.5% to 30%. NOTE E - CAPITAL STOCK Shareholders approved the 1993 Stock Option Plan on October 4, 1993. The plan authorizes the grant of stock options for up to 520,000 shares of the Common Stock of the Company for a ten year period beginning May 9, 1994, the day after the expiration of the 1984 Stock Option Plan. The shares may be optioned at not less than seventy-five percent of the fair market value on the date granted and may include stock appreciation rights. No options have been granted under the 1993 plan. The 1984 Stock Option Plan expired on May 8, 1994. Outstanding options are exercisable within ten years from the date of grant. The exercise price is the fair market value as of the date granted. The outstanding stock options for the 1984 plan follow:
Option Price ------------------------------ Shares Per Share Total ------ --------- ------------ Chairman 78,952 $18.18 $1,435,347 President 94,208 $15.55-$22.53 1,957,098 Other key employees 94,047 $18.18 1,709,774
Shares reserved under these plans have been adjusted for stock dividends. There are no other outstanding options, warrants or rights. 11 12 Frisch's Restaurants, Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE F - PENSION PLANS
The following table sets forth the plans' funded status and amounts recognized in the Company's balance sheet at May 29, 1994 and May 30, 1993 (latest available data, in thousands): 1994 1993 -------- --------- Plan assets at fair market value, primarily marketable securities and insurance funds $17,704 $18,016 ------- ------- Actuarial present value of benefit obligations: Vested benefits 9,591 10,454 Non vested benefits 814 299 ------- ------- Accumulated benefit obligations 10,405 10,753 Effect of projected future salary increases 3,388 2,912 ------- ------- Projected benefit obligations 13,793 13,665 ------- ------- Plan assets in excess of projected benefit obligations (including approximately $525 at 1994 and $549 at 1993 withdrawable by participants upon demand) 3,911 4,351 Unrecognized net gains (2,840) (3,206) Unrecognized prior service cost 947 1,089 Unamortized net transition (assets) (1,895) (2,132) ------- ------- Net prepaid pension included in the balance sheet $ 123 $ 102 ======= =======
Assumptions used to develop net periodic pension cost and the actuarial present value of projected benefit obligations:
1994 1993 -------- -------- Expected long-term rate of return on plan assets 8.5% 8.5% Weighted average discount rate 7.25 7.5 Rate of increase in compensation levels 5.5 5.5 Pension expense for the forty weeks ended March 5, 1995 and March 6, 1994 was $261,113 and $244,884, respectively.
NOTE G - EARNINGS PER SHARE Earnings per common share are based on the weighted average number of common and common equivalent shares outstanding during each period, which gives effect to stock options.
Weighted average common shares (Primary and fully diluted) ---------------- Quarter ending March 5, 1995 6,619,003 Year-to-date at March 5, 1995 6,618,679 Quarter ending March 6,1994 6,623,211 Year-to-date at March 6, 1994 6,622,855
NOTE H - COMPANY REPRESENTATIONS The financial information is unaudited but in the opinion of management includes all adjustments (all of which were normal recurring adjustments) necessary for a fair presentation of results of operations for such periods. 12 13 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - - --------------------- Total revenue rose $1,625,000, or 1.3%, in the first three quarters of fiscal 1995. The increase came primarily from new Big Boy restaurants opened during the past year. Same store sales for the third quarter declined more rapidly than the first two quarters due to winter storms which swept the Company's market areas for five weekends in January and February. Menu prices were increased 2.4% in March 1995 and 2.3% in May 1994. Cost of sales rose 4.6% over last year. Payroll and related expenses were 6.1% higher than the prior year due to a number of factors. The average hourly rate of pay for restaurant employees has risen significantly faster than inflation throughout the year, reflecting the tightening of the labor market. Payroll expense as a percentage of sales runs higher initially when opening new stores. Also, staffing schedules could not be reduced quickly enough to avoid higher payroll percentages during the severe weather weeks. In addition, last year's expense was reduced by lowering of estimates for future obligations of self-insured general and medical insurance plans. Other operating expenses rose 8.6% due to higher manager training costs and depreciation which relate to the new Big Boy restaurant expansion program. General and administrative expense declined 16.5% because the Company wrote off the remaining goodwill associated with Big Boy licensing rights in the state of Texas in last year's first quarter. Interest expense continued to rise due to higher rates combined with higher debt levels incurred to finance new restaurant properties. The estimated annual rate of income tax for the current year was reduced to 30% in the third quarter due to the first-ever losing quarter since becoming a publicly-held company in 1960. The resulting drop in probable full year earnings, when combined with existing tax credits, should produce an effective tax rate well below the preceding year. LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- During the first three quarters of fiscal 1995, cash provided by operating activities was $9,400,000 and an additional $8,100,000 was borrowed. These funds were primarily invested in new Big Boy restaurant construction and new restaurant sites. Six new Big Boys - five new locations and one replacement unit - were opened in the first half of this fiscal year, and constuction of four more was started during the third quarter. The Company has decided to cut back on new Big Boy openings for calendar 1995. Plans now call for the opening of six Big Boys during calendar year 1995 (including the four which began construction in the third quarter). As of March 5, 1995, restaurants under construction plus those scheduled to begin during the fourth quarter totaled $4,600,000. Cash flow from operating activities plus funds available from the revolving credit loan should be adequate to complete the anticipated construction. It is the Company's intention to operate within cash flow and avoid additional borrowing upon completion of the current construction cycle. PART II - OTHER INFORMATION - - --------------------------- Items 1, 2, 3, 4, and 5, the answers to which are either "none" or "not applicable", are omitted. Item 6. Exhibits and reports on Form 8-K. a) Exhibits None b) Reports on Form 8-K. The Company did not file a report on Form 8-K during the forty weeks ended March 5, 1995. 13 14 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FRISCH'S RESTAURANTS, INC. -------------------------- (registrant) 4/13/95 DATE________________________ /s/ Louis J. Ullman BY________________________________ Louis J. Ullman Senior Vice President-Finance and Principal Financial Officer 14 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET AND STATEMENT OF EARNINGS OF FRISCH'S RESTAURANTS, INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS MAY-28-1995 MAY-30-1994 MAR-05-1995 496,286 0 1,882,152 0 4,109,991 9,365,037 162,721,927 68,474,776 112,703,195 17,479,372 23,682,731 6,808,939 0 0 57,430,477 112,703,195 123,095,656 124,378,946 113,493,644 113,493,644 6,786,378 0 1,506,513 2,592,411 778,000 1,814,411 0 0 0 1,814,411 .27 .27
-----END PRIVACY-ENHANCED MESSAGE-----