-----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, ODKQJVyXdfe7VGR4ZBpwAHSncRa9V2V8W8MYvGVTthhnICXN0UHAE34ais2HrdVG FuMvdHvw1LGJclrHyoun0Q== /in/edgar/work/0000912057-00-048936/0000912057-00-048936.txt : 20001114 0000912057-00-048936.hdr.sgml : 20001114 ACCESSION NUMBER: 0000912057-00-048936 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000926 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FURRS RESTAURANT GROUP INC CENTRAL INDEX KEY: 0000872548 STANDARD INDUSTRIAL CLASSIFICATION: [5812 ] IRS NUMBER: 752350724 STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10725 FILM NUMBER: 760185 BUSINESS ADDRESS: STREET 1: 3001 E PRESIDENT GEORGE BUSH HWY STREET 2: SUITE 200 CITY: RICHARDSON STATE: TX ZIP: 75085-5943 BUSINESS PHONE: 972-808-2923 MAIL ADDRESS: STREET 1: P.O. BOX 852800 CITY: RICHARDSON STATE: TX ZIP: 75085-2800 FORMER COMPANY: FORMER CONFORMED NAME: FURRS BISHOPS INC DATE OF NAME CHANGE: 19930328 10-Q 1 a2030201z10-q.txt 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 26, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NO. 1-10725 FURR'S RESTAURANT GROUP, INC. INCORPORATED IN DELAWARE IRS EMPLOYER INDENTIFICATION NO. 75-2350724 3001 E. PRESIDENT GEORGE BUSH HWY., SUITE 200, RICHARDSON, TEXAS 75082 REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 808-2923 - -------------------------------------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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 ----- ----- - -------------------------------------------------------------------------------- As of November 3, 2000 there were 9,757,918 shares of Common Stock outstanding. 1 FURR'S RESTAURANT GROUP, INC. INDEX
PART I. FINANCIAL INFOMRATION PAGE ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets - September 26, 2000 (Unaudited) and December 28, 1999 3 Unaudited Condensed Consolidated Statements of Operations - For the thirteen weeks ended September 26, 2000 and September 28, 1999 5 Unaudited Condensed Consolidated Statements of Operations- For the thirty-nine weeks ended September 26, 2000 and September 28, 1999 6 Unaudited Condensed Consolidated Statement of Changes in Stockholders' Deficit - For the thirty-nine weeks ended September 26, 2000 7 Unaudited Condensed Consolidated Statements of Cash Flows - For the thirty-nine weeks ended September 26, 2000 and September 28, 1999 8 Notes to Unaudited Condensed Consolidated Financial Statements 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3. Quantitative and Qualitative Disclosure About Market Risk 13 PART II. OTHER INFORMATION Item 1. Legal Proceedings 14 SIGNATURES 14
2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 26, 2000 AND DECEMBER 28, 1999 (DOLLARS IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)
September 26, December 28, 2000 1999 ---- ---- (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,248 $ 5,172 Accounts and notes receivable, net 1,292 958 Inventories 6,712 6,544 Prepaid expenses and other 1,182 861 -------- -------- Total current assets 11,434 13,535 -------- -------- PROPERTY, PLANT AND EQUIPMENT, NET 57,358 54,586 DEFERRED TAX ASSETS 19,520 20,846 OTHER ASSETS 614 496 -------- -------- TOTAL ASSETS $ 88,926 $ 89,463 ======== ========
(Continued) 3 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 26, 2000 AND DECEMBER 28, 1999 (DOLLARS IN THOUSANDS, EXCEPT PAR VALUE AMOUNTS)
September 26, December 28, 2000 1999 ---- ---- (Unaudited) LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Current maturities of long-term debt $ 5,493 $ 5,493 Trade accounts payable 5,496 5,306 Other payables and accrued expenses 13,338 17,109 Reserve for store closings, current 508 804 -------- -------- Total current liabilities 24,835 28,712 -------- -------- RESERVE FOR STORE CLOSINGS, NET OF CURRENT MATURITIES 2,278 2,558 LONG-TERM DEBT, NET OF CURRENT PORTION 52,473 55,219 OTHER PAYABLES 10,671 10,217 EXCESS OF FUTURE LEASE PAYMENTS OVER FAIR VALUE, NET OF AMORTIZATION 1,585 1,919 STOCKHOLDERS' DEFICIT: Preferred Stock, $.01 par value; 5,000,000 shares authorized, none issued - - Common Stock, $.01 par value; 15,000,000 shares authorized, 9,757,918 shares issued and outstanding 98 98 Additional paid-in capital 56,386 56,386 Accumulated other comprehensive loss (1,728) (1,728) Accumulated deficit (57,672) (63,918) -------- -------- Total stockholders' deficit (2,916) (9,162) -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 88,926 $ 89,463 ======== ========
See accompanying notes to condensed consolidated financial statements. 4 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 26, 2000 AND SEPTEMBER 28, 1999 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Thirteen weeks ended ----------------------------------- September 26, September 28, 2000 1999 ---- ---- Sales $ 49,597 $ 47,788 Costs and expenses: Cost of sales (excluding depreciation) 14,644 14,552 Selling, general and administrative 30,049 28,380 Depreciation and amortization 2,734 2,432 --------- --------- 47,427 45,364 --------- --------- Operating income 2,170 2,424 Interest expense 87 85 --------- --------- Earnings before income taxes 2,083 2,339 Income tax expense 361 - --------- --------- Net income $ 1,722 $ 2,339 ========= ========= Weighted average number of shares of common stock outstanding: Basic 9,757,918 9,757,909 ========= ========= Diluted 9,758,558 9,758,753 ========= ========= Net income per share: Basic $ 0.18 $ 0.24 ========= ========= Diluted $ 0.18 $ 0.24 ========= =========
See accompanying notes to condensed consolidated financial statements. 5 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 2000 AND SEPTEMBER 28, 1999 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Thirty-nine weeks ended ----------------------------------- September 26, September 28, 2000 1999 ---- ---- Sales $ 145,549 $ 140,987 Costs and expenses: Cost of sales (excluding depreciation) 42,869 42,164 Selling, general and administrative 86,802 85,846 Depreciation and amortization 8,047 7,303 Special Charge - 566 ---------- ---------- 137,718 135,879 ---------- ---------- Operating income 7,831 5,108 Interest expense 259 232 ---------- ---------- Earnings before income taxes 7,572 4,876 Income tax expense 1,326 - ---------- ---------- Net income $ 6,246 $ 4,876 ========== ========== Weighted average number of shares of common stock outstanding: Basic 9,757,918 9,756,871 ========== ========== Diluted 9,761,262 9,799,017 ========== ========== Net income per share: Basic $ 0.64 $ 0.50 ========== ========== Diluted $ 0.64 $ 0.50 ========== ==========
See accompanying notes to condensed consolidated financial statements. 6 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 2000 (DOLLARS IN THOUSANDS)
Accumulated Additional Other Preferred Common Paid-In Comprehensive Accumulated Stock Stock Capital Loss Deficit Total ----- ----- ------- ---- ------- ----- BALANCE, DECEMBER 28, 1999 $ - $ 98 $ 56,386 $ (1,728) $ (63,918) $ (9,162) Net income - - - - 6,246 6,246 ---------- ------- ----------- ------------- ---------- --------- BALANCE, SEPTEMBER 26, 2000 $ $ 98 $ 56,386 $ (1,728) $ (57,672) $ (2,916) ========== ======= =========== ============= =========== =========
See accompanying notes to condensed consolidated financial statements. 7 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS)
Thirty-nine weeks ended ------------------------------------- September 26, September 28, 2000 1999 ---- ---- Cash flows from operating activities: Net income $ 6,246 $ 4,876 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,047 7,303 Deferred tax expense 1,326 - Gain on disposition of assets (365) (148) Changes in operating assets and liabilities: Accounts and notes receivable (334) (351) Inventories (168) 24 Prepaid expenses and other (439) (647) Reserve for store closings (576) (786) Trade accounts payable, other payables, accrued expenses and other liabilities (3,056) 58 -------- -------- Net cash provided by operating activities 10,681 10,329 -------- -------- Cash flows from investing activities: Purchases of property, plant and equipment (11,577) (15,495) Proceeds from the sale of property, plant and equipment 718 2,756 -------- -------- Net cash used in investing activities (10,859) (12,739) -------- -------- Cash flows from financing activities: Payment of indebtedness (2,746) (2,746) -------- -------- Net cash used in financing activities (2,746) (2,746) -------- -------- Decrease in cash and cash equivalents (2,924) (5,156) Cash and cash equivalents at beginning of period 5,172 11,571 -------- -------- Cash and cash equivalents at end of period $ 2,248 $ 6,415 ======== ======== Supplemental disclosure of cash flow information: Cash paid for interest (including $2,746 in 2000 and in 1999 classified as payment of indebtedness.) $ 3,006 $ 2,905 ======== ======== Cash paid for income taxes $ - $ - ======== ========
See accompanying notes to condensed consolidated financial statements. 8 FURR'S RESTAURANT GROUP, INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Dollars in Thousands) BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles. These statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 28, 1999. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of interim financial position and results of operations. Interim results of operations may not be indicative of the results that may be expected for a full fiscal year. RECLASSIFICATION Common stock has been decreased and additional paid in capital has been increased $390 thousand from amounts previously reported to reflect the effect of the reverse stock split in 1999. EARNINGS PER SHARE The following table reconciles the denominators of basic and diluted earnings per share for the periods ended September 26, 2000 and September 28, 1999.
Thirteen Weeks Ended Thirty-nine Weeks Ended -------------------------------------- --------------------------------------- September 26, September 28, September 26, September 28, 2000 1999 2000 1999 ----------------- ------------------- ------------------ ------------------- Weighted average common shares outstanding-basic 9,757,918 9,757,909 9,757,918 9,756,871 Options 640 844 3,344 42,146 ----------------- ------------------- ------------------ ------------------- Weighted average common shares outstanding-diluted 9,758,558 9,758,753 9,761,262 9,799,017 ================= =================== ================== ===================
The following table sets forth the options and warrants that were not included in the computation of diluted earnings per share because their exercise price was greater than the average market price of the common shares and therefore, the effect would be anti-dilutive.
Thirteen Weeks Ended Thirty-nine Weeks Ended ---------------------------------------- ----------------------------------------- September 26, September 28, September 26, September 28, 2000 1999 2000 1999 ---- ---- ---- ---- Options 890,415 376,665 840,665 376,665 Warrants 512,246 512,254 512,246 512,254
9 INCOME TAXES The Company has provided income tax expense of $361 thousand and $1.3 million for the thirteen weeks and thirty-nine weeks ended September 28, 2000, respectively. The effective income tax rate is lower than the statutory Federal rate of 35% due to interest expense on restructured debt, which is reported as additional debt rather than interest expense pursuant to Statement of Financial Accounting Standards No. 15, "Troubled Debt Restructurings". Based on the improved operating results and management's expectation of future taxable income, the Company recorded a deferred tax asset of $20.8 million at December 28, 1999 through reduction of the related valuation allowance. Prior to that date, no income tax benefit or expense related to fiscal 1999 results of operations was provided. BUSINESS SEGMENTS Following is a summary of segment information of the Company for the thirteen weeks ended September 26, 2000 and September 28, 1999:
Cafeterias Dynamic Foods Total ---------- ------------- ----- 2000: External revenues $ 49,130 $ 467 $ 49,597 Intersegment revenues - 15,386 15,386 Depreciation and amortization 2,463 271 2,734 Segment profit 1,503 219 1,722 1999: External revenues $ 47,425 $ 363 $ 47,788 Intersegment revenues - 15,115 15,115 Depreciation and amortization 2,196 236 2,432 Segment profit 2,293 46 2,339
Following is a summary of segment information of the Company for the thirty-nine weeks ended September 26, 2000 and September 28, 1999:
Cafeterias Dynamic Foods Total ---------- ------------- ----- 2000: External revenues $144,339 $ 1,210 $ 145,549 Intersegment revenues - 45,523 45,523 Depreciation and amortization 7,261 786 8,047 Segment profit 5,611 635 6,246 1999: External revenues $140,120 $ 867 $ 140,987 Intersegment revenues - 44,794 44,794 Depreciation and amortization 6,591 712 7,303 Segment profit 4,240 636 4,876
10 Following is a reconciliation of reportable segments to the Company's consolidated totals for the periods ended September 26, 2000 and September 28, 1999:
Thirteen Weeks Ended Thirty-nine Weeks Ended --------------------------------------- ---------------------------------------- September 26, September 28, September 26, September 28, 2000 1999 2000 1999 ----------------- ----------------- ----------------- ------------------ Revenues Total revenues of reportable $ 64,983 $ 62,903 $ 191,072 $ 185,781 segments Elimination of inter-segment (15,386) (15,115) (45,523) (44,794) revenue ----------------- ----------------- ----------------- ----------------- Total consolidated revenues $ 49,597 $ 47,788 $ 145,549 $ 140,987 ================= ================= ================= ==================
RECENT ACCOUNTING MATTERS The Company has assessed the reporting and disclosure requirements of SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. This statement establishes accounting and reporting standards for derivative instruments and hedging activities and will require the Company to recognize all derivatives on its balance sheet at fair value. If the derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivatives will either be offset against the change in fair value of the hedged item through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The Company will adopt SFAS No. 133, as amended, in the first quarter of fiscal 2001, is not currently party to any derivative contracts, and does not anticipate that the adoption will have a material effect on the Company's results of operations or financial position. CONTINGENCIES In July 1998, the Company filed a declaratory judgement lawsuit in State District Court in Lubbock, Texas, in which the Court was asked to find that the Company is not obligated to make severance payments that have been demanded by Theodore Papit, the former President and Chief Executive Officer of Furr's. This litigation was settled by agreement with Mr. Papit in June 2000. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS THIRTEEN WEEKS ENDED SEPTEMBER 26, 2000 COMPARED TO THIRTEEN WEEKS ENDED SEPTEMBER 28, 1999: Sales for the third fiscal quarter of 2000 were $49.6 million, an increase of $1.8 million from the same quarter of 1999. Operating income for the third quarter of 2000 was $2.2 million compared to $2.4 million in the comparable period in the prior year. Net income for the third quarter of 2000 was $1.7 million compared to $2.3 million in the third quarter 1999. SALES. Restaurant sales in comparable units increased $32 thousand, or 0.1% in the third quarter of 2000 over the same quarter of 1999. Third quarter sales for the new units opened since second quarter 1999 was $2.1 million, an increase of $1.7 million over the aggregate sales of the units that were closed after third quarter 1999. Sales by Dynamic Foods to third parties were $104 thousand higher in the third quarter 2000 than that of third quarter 1999. 11 COST OF SALES. Excluding depreciation, cost of sales were 29.5% of sales for the third quarter of 2000 as compared to 30.5% for the same quarter of 1999. The decrease in the percentage of sales was the result of lower product costs. SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative ("SG&A") expense was higher in the aggregate by $1.7 million in the third quarter of 2000 as compared to 1999. Third quarter 2000 included a loss of $32 thousand from the sale of assets. The change in SG&A expense included an increase of $129 thousand in supplies expense, $186 thousand in repair and maintenance, $186 thousand in utilities, and $1.1 million in labor and related benefits. We had decreases of $200 thousand in marketing expense, $116 thousand in professional services and $166 thousand in rent. The increase in labor and related benefits in the current year is principally due to a prior year reduction in accrued workers compensation liability of $1 million. DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense was $302 thousand higher in the third quarter of 2000 than that of third quarter of 1999 due to depreciation of prior year's re-imaging capital expenditures. INCOME TAXES. Income tax expense of $.4 million was provided in the third quarter of 2000. Our effective tax rate is lower than the statutory Federal rate of 35% due to interest expense on restructured debt, which is reported as additional debt rather than interest expense pursuant to Statement of Financial Accounting Standard No. 15, "Troubled Debt Restructurings." Based on sustained improvement in operating results in 1999, we reduced the valuation allowance recorded against its deferred tax assets and recorded a deferred tax asset of $20.8 million in the fourth quarter of 1999. Prior to that time, we provided no annual income tax expense or benefit related to results of operations. Management now expects to provide for income taxes for interim periods at our estimated effective tax rate. THIRTY-NINE WEEKS ENDED SEPTEMBER 26, 2000 COMPARED TO THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1999: Sales for the first thirty-nine weeks of 2000 were $145.5 million, an increase of $4.5 million from the period of 1999. Operating income for the first thirty-nine weeks of 2000 was $7.8 million compared to $5.1 million in the comparable period in the prior year. The operating results of the first thirty-nine weeks of 1999 included a special charge of $566 thousand for the costs associated with the move of our support center from Lubbock, Texas to Richardson, Texas. Net income for the first thirty-nine weeks of 2000 was $6.2 million compared to $4.9 million in the same period of 1999. SALES. Restaurant sales in comparable units increased $3.3 million, or 2.4% in the first thirty-nine weeks of 2000 over the same period of 1999, reflecting the effects of our re-imaging program. Year to date sales for the new units opened since third quarter 1999 was $2.5 million, an increase of $.9 million over the aggregate sales of the units that were closed after third quarter 1999. Sales by Dynamic Foods to third parties were $343 thousand higher in the first thirty-nine weeks of 2000 than that of the comparable period of 1999. COST OF SALES. Excluding depreciation, cost of sales were 29.5% of sales for the first thirty-nine weeks of 2000 as compared to 29.9% for the same period of 1999. The decrease in the percentage of sales was the result of lower product costs. SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and administrative ("SG&A") expense was higher in the aggregate by $956 thousand in the first thirty-nine weeks of 2000 as compared to 1999. The thirty-nine weeks of 2000 included an increased gain of $217 thousand from the sale of assets over the same period of 1999. The change in SG&A expense included an 12 increase of $367 thousand in supplies expense, $326 thousand in repairs and maintenance expense, $210 thousand in utilities and $1.5 million in labor and related benefits. We had decreases of $650 thousand in marketing expense, $276 thousand in other store expenses, $688 thousand in professional services and $427 thousand in rent. The increase in labor and related benefits in the current year is principally due to a prior year reduction in accrued workers compensation liability of $1.4 million. DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense was higher by $744 thousand in the first thirty-nine weeks of 2000 due to depreciation of prior year's re-imaging capital expenditures. INCOME TAXES. Income tax expense of $1.3 million was provided in the first thirty-nine weeks of 2000. Our effective tax rate is lower than the statutory Federal rate of 35% due to interest expense on restructured debt, which is reported as additional debt rather than interest expense pursuant to Statement of Financial Accounting Standard No. 15, "Troubled Debt Restructurings." Based on sustained improvement in operating results in 1999, we reduced the valuation allowance recorded against its deferred tax assets and recorded a deferred tax asset of $20.8 million in the fourth quarter of 1999. Prior to that time, we provided no annual income tax expense or benefit related to results of operations. Management now expects to provide for income taxes for interim periods at our estimated effective tax rate. LIQUIDITY AND CAPITAL RESOURCES During the thirty-nine weeks ended September 26, 2000, cash provided by operating activities was $10.7 million compared to $10.3 million in the same period of 1999. We made capital expenditures of $11.6 million during the first thirty-nine weeks of 2000 compared to $15.5 million during the same period of 1999. Capital expenditures for the remainder of fiscal year 2000 are expected to be $.7 million. Expenditures for reimaging and new units were front loaded in the current year to maximize the impact on net income that these expenditures would generate. Cash and temporary investments were $2.2 million at September 26, 2000 compared to $6.4 million at September 28, 1999 and $5.2 million at December 28, 1999. Our current ratio was .46:1 at September 26, 2000 compared to .57:1 at September 28, 1999 and .47:1 at December 28, 1999. Total assets at September 26, 2000 aggregated $88.9 million, compared to $69.9 million at September 28, 1999 and $89.5 million at December 28, 1999. Our restaurants are a cash business. Funds available from cash sales are not needed to finance receivables and are not generally needed immediately to pay for food, supplies and certain other expenses of the restaurants. Therefore, the business and operations of the Company have not historically required proportionately large amounts of working capital, which is generally common among similar restaurant companies. Item 3. Quantitative and Qualitative Disclosure About Market Risk We are exposed to market risk from changes in commodity prices. We purchase certain commodities used in food preparation. These commodities are generally purchased based upon market prices established with vendors. These purchase arrangements may contain contractual features that limit the price paid by establishing certain price floors or caps. We do not use financial instruments to hedge commodity prices because these purchase arrangements help control the ultimate cost paid and any commodity price aberrations are generally short term in nature. 13 Our long-term debt does not expose us to market risk as all interest accrues at fixed rates. We do not use derivative financial instruments to manage overall borrowing costs. This market risk discussion contains forward-looking statements. Actual results may differ materially from this discussion based upon general market conditions and changes in domestic and global financial markets. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Items 2, 3, 4 and 5 are not applicable and have been intentionally omitted. Item 6. Exhibits and Reports on Form 8-K None. 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. DATE: November 8, 2000 FURR'S RESTAURANT GROUP, INC. ------------------------------ /s/ Phillip Ratner ------------------------------------- Phillip Ratner President and Chief Executive Officer /s/ Paul G. Hargett ------------------------------------- Paul G. Hargett Chief Financial Officer 14 EX-27 2 a2030201zex-27.txt EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FURR'S RESTAURANT GROUP, INC. FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED SEPTEMBER 26, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JAN-02-2001 DEC-29-1999 SEP-26-2000 2,248 0 1,292 53 6,712 11,434 120,883 63,525 88,926 24,835 52,473 0 0 98 (3,014) 88,926 145,549 145,549 42,869 42,869 94,849 0 259 7,572 1,326 6,246 0 0 0 6,246 .64 .64
-----END PRIVACY-ENHANCED MESSAGE-----