-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GVCug3Jv9kBTv0rD3HYQg2MfLpyv8WWbQEXD84Bnzy929cnkdNVH/2mLd8yaNcfx aT1rr59teC7TO945lfKLLA== /in/edgar/work/20000810/0001012709-00-000708/0001012709-00-000708.txt : 20000921 0001012709-00-000708.hdr.sgml : 20000921 ACCESSION NUMBER: 0001012709-00-000708 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000628 FILED AS OF DATE: 20000810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAMILY STEAK HOUSES OF FLORIDA INC CENTRAL INDEX KEY: 0000784539 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 592597349 STATE OF INCORPORATION: FL FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14311 FILM NUMBER: 690438 BUSINESS ADDRESS: STREET 1: 2113 FLORIDA BLVD STREET 2: STE A CITY: NEPTUNE BEACH STATE: FL ZIP: 32266 BUSINESS PHONE: 9042494197 MAIL ADDRESS: STREET 1: 2113 FLORIDA BLVD STE A STREET 2: 2113 FLORIDA BLVD STE A CITY: NEPTUNE BEACH STATE: FL ZIP: 32266 10-Q 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarter ended June 28, 2000 Commission File No. 0-14311 FAMILY STEAK HOUSES OF FLORIDA, INC. Incorporated under the laws of IRS Employer Identification Florida No. 59-2597349 2113 FLORIDA BOULEVARD NEPTUNE BEACH, FLORIDA 32266 Registrant's Telephone No. (904) 249-4197 Indicate by check mark whether the registrant 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_____ Title of each class Number of shares outstanding Common Stock 2,416,232 $.01 par value As of July 28, 2000 FAMILY STEAK HOUSES OF FLORIDA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 28, 2000 (Unaudited) Note 1. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q, and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included. Operating results for the thirteen and twenty-six week periods ended June 28, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ending January 3, 2001. For further information, refer to the financial statements and footnotes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1999. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany profits, transactions and balances have been eliminated. Note 2. Earnings Per Share Basic earnings per share for the thirteen and twenty-six weeks ended June 28, 2000 and June 30, 1999 were computed based on the weighted average number of common shares outstanding. Diluted earnings per share for those periods have been computed based on the weighted average number of common shares outstanding, giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive shares are represented by shares under option and stock warrants. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Quarter Ended June 28, 2000 versus June 30, 1999 The Company experienced an increase in total sales during the second thirteen weeks of 2000 compared to the second thirteen weeks of 1999. Same-store sales (average unit sales in restaurants that have been open for at least 18 months and operating during comparable weeks during the current and prior year) in the second quarter of 2000 increased 5.9% from the same period in 1999, compared to an increase of 1.7% from 1999 as compared to 1998. Management estimates that approximately one-half of the same store sales increase resulted from menu price increases. Total sales increased 0.4%, despite the fact that the Company operated a net total of two fewer restaurants in 2000. Since the end of the second quarter of 1999, the Company sold three restaurants and opened one new restaurant. Management is seeking to continue to improve sales trends by focusing on improved restaurant operations, devising competitive strategies to offset the effects of new competition and making improvements to certain restaurants. In 2000, the Company added exhibition cooking areas to two of its restaurants, and experienced improved sales trends at these locations. Management intends to make similar additions to at least two more restaurants by the end of 2000. The Company also recently initiated a program to emphasize take-out sales. This program will include a separate take-out section which will be added to four of the Company's restaurants during the third quarter of 2000. The costs and expenses of the Company's restaurants include food and beverage, payroll, payroll taxes and employee benefits, depreciation and amortization, repairs, maintenance, utilities, supplies, advertising, insurance, property taxes and rents. The Company's food, beverage, payroll and benefit costs are believed to be higher than the industry average as a percentage of sales as a result of the Company's philosophy of providing customers with high value of food and service for every dollar a customer spends. In total, food and beverage, payroll and benefits, depreciation and amortization and other operating expenses as a percentage of sales decreased to 86.0% in the second quarter of 2000, from 88.5% in the same quarter of 1999, primarily due to reductions in payroll and benefit costs and other operating expenses as a percentage of sales. Food and beverage costs as a percentage of sales decreased to 38.6% in the second quarter of 2000 from 38.9% in the same period of 1999, primarily due to menu price increases implemented by the Company. Payroll and benefits as a percentage of sales decreased to 27.8% in the second quarter of 2000 from 29.2% in the same quarter of 1999, primarily due to a reduction in workers' compensation expense in 2000, and to incremental payroll costs in 1999 associated with the opening of a new restaurant. Other operating expenses as a percentage of sales decreased to 14.4% in the second quarter of 2000 compared to 15.9% in 1999, primarily due to costs incurred in 1999 associated with the opening of a new restaurant. Depreciation and amortization increased to 5.2% in 2000 from 4.5% in 1999, due to increased expense resulting from a reduction in the estimated useful life of assets at one restaurant where the Company's lease expired, and to additions to property and equipment over the last year. General and administrative expenses as a percentage of sales were 6.2% in the second quarter of 2000, compared to 6.7% in the same quarter of 1999, primarily due to lower manager training costs in 2000, and to costs incurred in 1999 from a proxy contest. Interest expense increased to $461,200 during the second quarter of 2000 from $428,800 in 1999. The increase was due to higher interest rates in 2000, and to additional borrowings under the Company's credit facility in 1999 and 2000. The results for the second quarter of 2000 include realized gains of $186,500 from the sale of marketable securities, which are included in interest and other income. There were no such gains in the second quarter of 1999. The effective income tax rates for the quarters ended June 28, 2000 and June 30, 1999 were 0.0%. The 0% rate in both years was due to the use of net operating loss carryforwards to offset taxable income. Net income for the second quarter of 2000 was $274,700, compared to a net loss of $192,500 in the second quarter of 1999. Earnings per share were $.11 for 2000, compared to net loss per share of $.08 in 1999. Six Months Ended June 28, 2000 versus June 30, 1999 For the six months ended June 28, 2000, total sales increased 2.4% compared to the same period of 1999. Same-store sales increased 4.3% for the six months ended June 28, 2000. Food and beverage costs as a percentage of sales for the six month period ended June 28, 2000 decreased to 38.6% from 38.9% for the same period in 1999, primarily due to menu price increases. Payroll and benefits as a percentage of sales decreased to 27.4% in 2000 from 28.5% in 1999. The increase was primarily due to lower workers' compensation costs in 2000. For the six months ended June 28, 2000, other operating expenses decreased to 14.2% from 15.1% in 1999, primarily due to costs incurred in 1999 associated with the opening of a new restaurant, and to lower property insurance costs in 2000. Depreciation and amortization increased to 5.0% for the six month period ended June 28, 2000, compared to 4.8% in 1999, due primarily to additions to property and equipment over the past year. General and administrative expenses for the six-month periods ended June 28, 2000 and June 30, 1999 were 6.2% of sales. Interest expense increased for the first six months of 2000 to $928,400 from $811,200 for the same period in 1999, due to higher interest rates in 2000 and from additional borrowing under the Company's credit facility. The results for the six months ended June 28, 2000 include realized gains of $368,100 from the sale of marketable securities, which are included in interest and other income. There were no such gains in the same period of 1999. The effective income tax rates for the six-month periods ended June 28, 2000 and July 30, 1999 were 0.0%. The 0% rate in both years was due to the use of net operating loss carryforwards to offset taxable income. Net earnings for the six months ended June 28, 2000 were $813,000 or $.34 per share, compared to net earnings of $41,300, or $.02 per share for the same period in 1999. The Company's operations are subject to some seasonal fluctuations. Revenues per restaurant generally increase from January through April and decline from September through December. Operating results for the quarter ended June 28, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ending January 3, 2001. Liquidity and Capital Resources Substantially all of the Company's revenues are derived from cash sales. Inventories are purchased on credit and are converted rapidly to cash. Therefore, the Company does not carry significant receivables or inventories. As a result, working capital requirements for continuing operations are not significant. At June 28, 2000, the Company had a working capital deficit of $1,306,500, compared to a working capital deficit of $2,491,100 at December 29, 1999. The increase in the working capital during the first six months in 2000 was due primarily to cash generated from operations. Cash provided by operating activities increased to $2,045,900 in the first six months of 2000 from $1,213,600 in the same period of 1999. This increase was primarily due to the increased net earnings in 2000. The Company spent approximately $1,082,400 in the first six months of 2000 for land, property and equipment. Total capital expenditures for 2000, based on present costs and plans for expansion, are estimated to be $4,000,000. The Company projects that cash generated from operations, plus additional borrowing under the Company's credit facility will be sufficient to fund these improvements. In December 1996, the Company entered into two loan agreements with FFCA Mortgage Corporation ("FFCA"). Pursuant to the first Loan Agreement (the "$15.36 Million Loan Agreement"), the Company borrowed $15.36 million, which loans are evidenced by fourteen Promissory Notes payable to FFCA. Each Note is secured by a mortgage on a Company restaurant property. The Promissory Notes provide for a term of twenty years and an interest rate equal to the thirty-day LIBOR rate plus 3.75%, adjusted monthly. The $15.36 Agreement provides for various covenants, including the maintenance of prescribed debt service coverages. As of June 28, 2000, the outstanding balance due under the loan was $11,674,600. The Company used the proceeds of the $15.36 million loan agreement to retire its Notes with Cerberus Partners, L.P. ("Cerberus") and its loans with the Daiwa Bank Limited and SouthTrust Bank of Alabama, N.A. In addition, the Company retired Warrants for 210,000 shares of the Company's common stock previously held by Cerberus. Cerberus continues to hold Warrants to purchase 140,000 shares of the Company's common stock at an exercise price of $2.00 per share. Pursuant to the second loan agreement with FFCA, the Company borrowed an additional $2,590,000 in 1998 to fund construction of new restaurants. This additional financing is evidenced by three additional Promissory Notes secured by mortgages on three Company restaurant properties. The terms and conditions of this loan agreement are substantially identical to those of the $15.36 million Loan Agreement. As of June 28, 2000, the outstanding balance under this loan was $2,489,300. In October 1998, the Company received two commitments for new financing from FFCA. The Company borrowed a total of $2.6 million in 1999 under the first commitment. The proceeds of the 1998 and 1999 borrowings were used to fund construction of new restaurants in Leesburg, Deland and Tampa, Florida. This loan is secured by mortgages on two Company restaurant properties. As of June 28, 2000, the outstanding balance under this loan was $2,548,400. The second commitment was for construction financing for two new restaurants to be built in 2000 and 2001. Terms of this commitment include funding of a maximum of $1,600,000 per restaurant. Other terms and conditions of these loan agreements are substantially identical to those of the $15.36 million Loan Agreement. In May 2000 the Company borrowed $503,800 under this agreement to fund the purchase of land for a new restaurant to be constructed in St. Cloud, Florida in 2000. The Company plans to open one new restaurant in 2000 and three to four new restaurants in 2001. In July 2000, the Company received a new commitment from FFCA to fund $1,600,000 each for two new restaurants to be constructed in 2001. In total, the Company has current commitments from FFCA sufficient to construct four new restaurants, including the one currently under construction in St. Cloud, Florida. The preceding discussion of liquidity and capital resources contains certain forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, and in addition to the factors discussed herein, among the other factors that could cause actual results to differ materially are the following: failure of facts to conform to necessary management estimates and assumptions; the willingness of FFCA or other lenders to extend financing commitments; repairs or similar expenditures required for existing restaurants due to weather or acts of God; the Company's ability to identify and secure suitable locations on acceptable terms and open new restaurants in a timely manner; the Company's success in selling restaurants listed for sale; the economic conditions in the new markets into which the Company expands; changes in customer dining patterns; competitive pressures from other national and regional restaurant chains and other food vendors; business conditions, such as inflation or a recession, and growth in the restaurant industry and the general economy; and other risks identified from time to time in the Company's SEC reports, registration statements and public announcements. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company is party to, or threatened with, litigation from time to time, in the normal course of its business. Management, after reviewing all pending and threatened legal proceedings, considers that the aggregate liability or loss, if any, resulting from the final outcome of these proceedings will not have a material effect on the financial position or operation of the Company. The Company will, from time to time when appropriate in management's estimation, record adequate reserves in the Company's financial statements for pending litigation. ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On June 13, 2000, the Company held its annual meeting of shareholders to elect directors to serve for the upcoming year. The following table sets forth the number of votes for and against each of the nominees for director.
For Withheld Nominee: Glen F. Ceiley 2,052,155 25,900 Jay Conzen 2,048,955 29,100 Steven Catanzaro 2,049,402 28,653 William Means 2,051,895 26,160 The Company is unable to determine the number of broker non-votes.
Glen F. Ceiley, Jay Conzen, Steven Catanzaro and William Means Were elected as directors by the affirmative vote of a majority of the 2,077,927 shares of the Company's common stock represented in person or by proxy at the annual meeting of shareholders. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K The following exhibits are filed as part of the report on Form 10-Q, and the list comprises the Exhibit Index. Exhibit 11.1 The table below details the number of shares and common stock equivalents used in the computation of basic and diluted earnings per share: Three Months Ended Six Months
6/28/00 6/30/99 6/28/00 6/30/99 Basic: Weighted average common shares outstanding used in computing basic earnings per share 2,416,000 2,409,000 2,412,700 2,398,000 ========= ========= ========= ========= Basic (loss) earnings per share $ .11 $ (0.08) $ .34 $ .02 ========= ========= ========= ========= Diluted: Weighted average common shares outstanding 2,416,200 2,409,000 2,415,800 2,401,800 Effects of shares issuable under stock plans using the treasury method 7,800 - 6,200 1,200 Shares used in computing --------- --------- ---------- --------- diluted earnings per share 2,424,000 2,409,000 2,422,000 2,403,000 ========= ========= ========= ========= $ .11 $ (0.08) $ .34 $ .02 ========= ========= ========= =========
27.01 Financial Data Schedule SIGNATURES 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. FAMILY STEAK HOUSES OF FLORIDA, INC. (Registrant) /s/ Glen F. Ceiley Date: August 4, 2000 Glen F. Ceiley Chairman of the Board /s/ Edward B. Alexander Date: August 4, 2000 Edward B. Alexander Executive Vice President / CFO (Principal Financial and Accounting Officer) Family Steak Houses of Florida, Inc. Consolidated Results of Operations (Unaudited) For The Quarters Ended -----------------------
June 29, June 30, 2000 1999 ----------- ----------- Revenues: Sales $10,179,600 $10,143,100 Vending Revenue 42,400 40,400 ___________ ___________ 10,222,000 10,183,500 Cost and expenses: Food and beverage 3,928,900 3,944,500 Payroll and benefits 2,829,400 2,963,500 Depreciation and amortization 529,500 456,700 Other operating expenses 1,466,400 1,612,800 General and administrative expenses 626,400 674,500 Franchise fees 305,100 303,700 Loss on store closings and disposition of equipment 20,700 45,100 ----------- ---------- 9,706,400 10,000,800 Earnings from operations 515,600 182,700 Interest and other income 236,800 53,600 Gain on sale of property (16,500) -- Interest expense (461,200) (428,800) ----------- ---------- Earnings before income taxes 274,700 (192,500) ----------- ---------- Net earnings $274,700 ($192,500) =========== ========== Basic earnings per share $0.11 $0.08 =========== ========== Diluted earnings per share $0.11 $0.08 =========== ========== See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc. Consolidated Results of Operations (Unaudited) For The Six Months Ended -----------------------
June 29, June 30, 2000 1999 ----------- ----------- Revenues: Sales $20,770,900 $20,289,500 Vending Revenue 114,800 79,200 ___________ ___________ 20,885,700 20,368,700 Cost and expenses: Food and beverage 8,019,900 7,886,700 Payroll and benefits 5,700,300 5,788,400 Depreciation and amortization 1,037,600 963,700 Other operating expenses 2,939,700 3,067,000 General and administrative expenses 1,284,500 1,256,200 Franchise fees 622,500 607,700 Loss on store closings and disposition of equipment 59,900 59,800 ----------- ---------- 19,664,400 19,629,500 Earnings from operations 1,221,300 739,200 Interest and other income 452,000 113,300 Gain on sale of property 68,100 -- Interest expense (928,400) (811,200) ----------- ---------- Earnings before income taxes 813,000 41,300 ----------- ---------- Net earnings $813,000 $ 41,300 =========== ========== Basic earnings per share $0.34 $0.02 =========== ========== Diluted earnings per share $0.34 $0.02 =========== ========== See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc. Consolidated Balance Sheets (Unaudited) June 28, December 29,
2000 1999 -------------- --------------- ASSETS Current assets: Cash and cash equivalents $1,693,000 $747,300 Investments 438,200 92,300 Receivables 98,400 125,000 Current portion of mortgages receivable 211,100 77,800 Inventories 251,800 285,400 Prepaid and other current assets 200,900 204,800 -------------- --------------- Total current assets 2,893,400 1,532,600 Mortgages receivable 361,600 159,800 Certificate of deposit 10,700 10,800 Investments held to maturity 500,000 500,000 Property and equipment: Land 7,994,400 7,537,300 Buildings and improvements 20,642,100 21,156,000 Equipment 11,563,300 11,908,100 -------------- --------------- 40,199,800 40,601,400 Accumulated depreciation (15,529,700) (15,340,500) -------------- --------------- Net property and equipment 24,670,100 25,260,900 Property held for sale 1,906,200 2,488,700 Other assets, principally deferred charges, net of accumulated amortization 838,900 806,400 -------------- --------------- $31,180,900 $30,759,200 ============== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $1,461,600 $1,275,300 Accrued liabilities 2,379,700 2,363,600 Current portion of long-term debt 355,200 381,400 Current portion of obligation-capital lease 3,400 3,400 -------------- --------------- Total current liabilities 4,199,900 4,023,700 Long-term debt 16,860,900 17,335,600 Obligation under capital lease 1,047,700 1,049,300 Deferred revenue 11,100 15,200 -------------- --------------- Total liabilities 22,119,600 22,423,800 Shareholders' equity: Preferred stock of $.01 par; authorized 10,000,000 shares; none issued -- -- Common stock of $.01 par; authorized 4,000,000 shares; outstanding 2,414,000 shares in 2000 and 2,409,000 shares in 1999 24,200 24,100 Additional paid-in capital 8,628,100 8,624,700 Accumulated other comprehensive (loss) income (78,700) 11,900 Retained earnings (accumulated deficit) 487,700 (325,300) -------------- --------------- Total shareholders' equity 9,061,300 8,335,400 -------------- --------------- $31,180,900 $30,759,200 ============== =============== See accompanying notes to consolidated financial statements.
Family Steak Houses of Florida, Inc. Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended ================================
June 28, June 30, 2000 1999 ============ ============= Operating activities: Net Earnings $813,000 $41,300 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 1,037,600 963,700 Directors' fees in form of stock options 3,300 7,500 Amortization of loan fees 15,300 13,700 Loss on disposition of equipment 35,700 34,800 Gain on sale of restaurants (68,100) -- Decrease (increase) in: Receivables 26,600 (5,300) Inventories 33,600 69,700 Prepaids and other current assets 3,900 5,000 Other assets (53,600) (37,300) Increase (decrease) in: Accounts Payable 186,300 47,300 Accrued liabilities 16,100 77,300 Deferred Revenue (4,100) (3,900) __________ _________ Net cash provided by operating activities 2,045,600 1,213,800 __________ _________ Investing activities: Net purchase of investments (436,400) (361,700) Principal receipts on mortgage receivable 139,900 34,700 Proceeds from sale of restaurants 673,800 -- Proceeds from sale of property held for sale 582,500 -- Issuance of mortgages receivable (475,000) -- Capital expenditures (1,082,400) (2,291,500) __________ _________ Net cash used by investing activities (597,600) (2,618,500) Financing activities: Payments on long-term debt (1,004,700) (214,400) Proceeds from issuance of long-term debt 503,800 2,600,000 Payments on capital lease (1,600) (1,500) Proceeds from issuance of common stock 200 7,900 __________ __________ Net cash (used in) provided by financing activities (502,300) 2,392,000 __________ __________ Net increase in cash and cash equivalents 945,700 987,300 Cash and cash equivalents - beginning of period 747,300 1,910,200 __________ __________ Cash and cash equivalents - end of period $1,693,000 $2,897,500 =========== =========== Supplemental disclosures of cash flow information: Cash paid during the quarter for interest $909,900 $841,700 =========== ========== Cash paid during the quarter for income taxes -- -- =========== ========== See accompanying notes to consolidated financial statements.
EX-27 2 0002.txt
5 This financial data schedule contains summary financial information extracted from the Company's Form 10Q for the quarter ended June 28, 2000 and is qualified in its entirety by reference to such financial statements. 3-MOS JAN-03-2001 JUN-28-2000 1693000 438200 98400 0 251800 2893400 40199800 15529700 31180900 4199900 16860900 0 0 24200 9037100 31180900 10179600 10222000 3928900 9706400 0 0 461200 274700 0 0 0 0 0 274700 .11 .11
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