-----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, V2o+jQfldcg4t8L1/oWHybPT/669iTrwSvjMxTyXcGnez5QXcNgWWLzkH965DVgv /fknUcN/ItfaLq7xusqNEw== 0000914427-96-000069.txt : 19960827 0000914427-96-000069.hdr.sgml : 19960827 ACCESSION NUMBER: 0000914427-96-000069 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960713 FILED AS OF DATE: 19960826 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BERTUCCIS INC CENTRAL INDEX KEY: 0000874971 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 042947209 STATE OF INCORPORATION: MA FISCAL YEAR END: 1228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19315 FILM NUMBER: 96620545 BUSINESS ADDRESS: STREET 1: 14 AUDUBON ROAD CITY: WAKEFIELD STATE: MA ZIP: 01880 BUSINESS PHONE: 6172466700 MAIL ADDRESS: STREET 1: 14 AUDUBON ROAD CITY: WAKEFIELD STATE: MA ZIP: 01880 FORMER COMPANY: FORMER CONFORMED NAME: BERTUCCIS HOLDING CORP DATE OF NAME CHANGE: 19600201 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the Quarterly Period Ended July 13, 1996 Commission File Number 0-19315 Bertucci's, Inc. (Exact name of registrant as specified in its charter) Massachusetts 04-2947209 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 14 Audubon Road, Wakefield, Massachusetts 01880 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (617) 246-6700 Indicate by check mark whether the registrant (1) has filed all reports required to be filled by section 13 or 15(d) of the Securities Exchange Act of the 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 the filing requirements for the past 90 days. Yes [X] No On August 23, 1996, 8,752,928 shares of the registrant's Common Stock were outstanding. BERTUCCI'S, INC. FORM 10-Q TABLE OF CONTENTS
PAGE PART I: FINANCIAL INFORMATION Item 1. Financial Statements: 1) Consolidated Condensed Balance Sheets July 13, 1996, and December 30, 1995 4 2) Consolidated Condensed Statements of Operations For Twelve Weeks and Twenty-Eight Weeks Ended July 13, 1996, and July 15, 1995 5 3) Consolidated Condensed Statements of Shareholders' Equity For The Twenty-Eight-Week Period Ended July 13, 1996 6 4) Consolidated Condensed Statements of Cash Flows - Twenty-Eight Weeks Ended July 13, 1996, and July 15, 1995 7 5) Notes to Consolidated Condensed Financial Statements 8 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9-12 PARTII: OTHER INFORMATION 13
PART I:FINANCIAL INFORMATION BERTUCCI'S, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
July 13, December 30, 1996 1995 (in thousands) ---------------------------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 1,146 $ 1,384 Inventories 995 951 Accounts receivable 148 154 Note receivable 70 70 Prepaid expenses 407 366 Deferred preopening costs 750 818 Prepaid taxes 758 758 ---------------- ---------------- Total current assets 4,274 4,501 ---------------- ---------------- PROPERTY AND EQUIPMENT, at cost: Land 2,902 2,902 Buildings 10,345 10,324 Leasehold improvements 70,845 69,028 Machinery and equipment 34,968 32,274 Construction in progress 1,591 1,216 Equipment under capital lease 164 164 ---------------- ---------------- 120,815 115,908 Less - Accumulated depreciation 28,098 26,048 ---------------- ---------------- Net property and equipment 92,717 89,860 ---------------- ---------------- PREPAID TAXES 2,405 2,405 OTHER ASSETS 2,114 2,172 ---------------- ---------------- $ 101,510 $ 98,938 ================ ================ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable-current $ 25 $ 25 Accounts payable 4,319 4,243 Accrued expenses 765 513 Accrued restaurant closing expense 1,273 1,539 Accrued payroll and employee benefits 2,510 2,419 Accrued taxes 1,875 1,019 ---------------- ---------------- Total current liabilities 10,767 9,758 DEFERRED RENT 5,870 5,575 NOTES PAYABLE 50 75 LONG-TERM DEBT 19,438 19,438 SHAREHOLDERS' EQUITY: Preferred stock, $.01 par value - Authorized - 200,000 shares, none issued - - Common stock, $.005 par value - Authorized - 15,000,000 shares Issued and outstanding - 8,728,442 shares at December 30, 1995 and 8,739,552 shares at July 13, 1996 44 44 Additional paid-in capital 44,679 44,620 Retained earnings 20,662 19,428 ---------------- ---------------- Total shareholders' equity 65,385 64,092 ---------------- ---------------- $ 101,510 $ 98,938 ================ ================
The accompanying notes are an integral part of these consolidated condensed financial statements. BERTUCCI'S, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
12 Weeks Ended 28 Weeks Ended ------------------------------------------ ------------------------------------------- July 13, July 15, July 13, July 15, 1996 1995 1996 1995 ------------------ ------------------ ----------------- ----------------- (in thousands, except per share data) NET SALES $ 30,235 $ 28,521 $ 68,494 $ 63,967 ------------------ ------------------ ----------------- ----------------- COSTS AND EXPENSES: Cost of sales 7,589 7,278 17,387 16,329 Operating expenses 15,844 14,380 35,725 31,706 General and administrative expenses 1,777 2,030 4,255 4,671 Depreciation and amortization 2,043 2,212 4,755 4,974 Taxes other than income 1,568 1,516 3,668 3,448 ------------------ ------------------ ----------------- ----------------- Total costs and expenses 28,821 27,416 65,790 61,128 ------------------ ------------------ -- --------------- -- --------------- Operating income 1,414 1,105 2,704 2,839 INTEREST EXPENSE, net 323 292 741 615 INTEREST INCOME 4 5 10 13 ----------------- ------------------ -- --------------- -- --------------- Income before income tax expense 1,095 818 1,973 2,237 INCOME TAX EXPENSE 410 293 739 810 ------------------ ------------------ -- --------------- -- --------------- Net income $ 685 $ 525 $ 1,234 $ 1,427 ================== ================== == =============== == =============== WEIGHTED AVERAGE SHARES OUTSTANDING 8,890,004 8,857,734 8,878,140 8,878,124 ================== ================== == =============== == =============== EARNINGS PER SHARE $ 0.08 $ 0.06 $ 0.14 $ 0.16 ================== ================== == =============== == ===============
The accompanying notes are an integral part of these consolidated condensed financial statements. BERTUCCI'S, INC. CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Common Stock Additional --------------------------- Paid-In Retained Shareholders' Shares Par Capital Earnings Equity ---------- ------------ ---------- ---------- --------------- (in thousands) BALANCE, December 30, 1995 8,728 $ 44 $ 44,620 $ 19,428 $ 64,092 Issuance of stock 12 - 59 - 59 Net income - - - 1,234 1,234 ---------- ------------ ------------ ------------- ------------ BALANCE, July 13, 1996 8,740 $ 44 $ 44,679 $ 20,662 $ 65,385 ========== ============ ============ ============= ============
The accompanying notes are an integral part of these consolidated condensed financial statements. BERTUCCI'S, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Twenty-Eight Weeks Ended --------------------------------------------- July 13, July 15, 1996 1995 ----------------- -------------------- (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,234 $ 1,427 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 4,893 5,097 Increase in inventories (44) (149) Increase in prepaid expenses, accounts receivable, notes receivable and other assets (23) (70) Increase (decrease) in accounts payable 76 (2,229) Increase in accrued expenses and deferred rent 372 692 Increase (decrease) in accrued, deferred and prepaid taxes 856 (877) ----------------- ------------- Net cash provided by operations 7,364 3,891 ----------------- ------------ CASH FLOWS USED FROM INVESTING ACTIVITIES: Additions to preopening costs (684) (878) Additions to property and equipment (6,952) (9,183) ----------------- ------------- Net cash used by investing activities (7,636) (10,061) ----------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 59 122 Proceeds from debt - 5,438 Decrease in notes payable (25) (25) ----------------- ------------- Net cash provided by financing activities 34 5,535 ----------------- ------------- NET DECREASE IN CASH AND CASH EQUIVALENTS (238) (635) CASH AND CASH EQUIVALENTS, beginning of period 1,384 750 ----------------- ------------- CASH AND CASH EQUIVALENTS, end of period 1,146 $ 115 ================= ============= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for --- Interest, net of amount capitalized $ 692 $ 542 ================= ============== Income taxes $ 80 $ 859
The accompanying notes are an integral part of these consolidated condensed financial statements. BERTUCCI'S, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS July 13, 1996 1. Basis of Presentation In the opinion of management, the accompanying consolidated condensed financial statements contain all normal recurring adjustments necessary for a fair presentation. The results of operations for the twelve-week and twenty-eight-week periods ended July 13, 1996 are not necessarily indicative of the results to be expected for the full year. The significant accounting policies followed by the Company are set forth in the notes toConsolidated Financial Statements in the Company's 1995 Annual Report and Form 10-K filed with the Securities and Exchange Commission. These financial statements should be read in conjunction with the financial statements included in the 1995 Annual Report and Form 10-K. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following table sets forth the percentage relationship to net sales of certain items included in the company's income statements for the periods indicated.
12 Weeks Ended 28 Weeks Ended ---------------------------------- --------------------------------- July 13, July 15, July 13, July 15, 1996 1995 1996 1995 ---------------- --------------- --------------- --------------- NET SALES 100.0% 100.0% 100.0% 100.0% ---------------- --------------- --------------- --------------- COSTS AND EXPENSES: Costs of sales 25.1 25.5 25.4 25.5 Operating expenses 52.4 50.4 52.2 49.6 General and administrative expenses 5.9 7.1 6.2 7.3 Depreciation and amortization 6.7 7.8 6.9 7.8 Taxes other than income 5.2 5.3 5.4 5.4 ---------------- --------------- --------------- --------------- Total costs and expenses 95.3 96.1 96.1 95.6 ---------------- --------------- --------------- --------------- Operating income 4.7 3.9 3.9 4.4 INTEREST EXPENSE, net 1.1 1.0 1.0 1.0 INTEREST INCOME - - - - ---------------- --------------- --------------- --------------- Income before income tax expense 3.6 2.9 2.9 3.4 INCOME TAX EXPENSE 1.3 1.0 1.1 1.2 ---------------- --------------- --------------- --------------- Net income 2.3% 1.9% 1.8% 2.2% ================ =============== =============== =============== NUMBER OF RESTAURANTS: Restaurants open at beginning of period 76 70 76 67 Restaurants opened during period 1 3 4 6 Restaurants closed during period - - (3) - ---------------- --------------- --------------- --------------- Restaurants open at end of period 77 73 77 73
Twelve Weeks Ended July 13, 1996, Compared To Twelve Weeks Ended July 15, 1995 Net sales increased $1.7 million, or 6.0%, to $30.2 million in the second quarter of fiscal year 1996, from $28.5 million in the second quarter of fiscal year 1995. Comparable restaurant sales for the twelve-week period increased 1.7%. The Company opened one additional new restaurant in the twelve- week period ended July 13, 1996. Cost of sales, primarily food and beverages, increased from $7.3 million in the twelve weeks ended July 15, 1995, to $7.6 million in the corresponding 1996 period. As a percentage of net sales, these costs were 25.5% in the 1995 fiscal period, and 25.1% in the corresponding 1996 fiscal period. The percentage decrease was the result of more efficient operations. The price of flour and cheese remained high throughout the period. Restaurant operating expenses for the twelve-week period increased from $14.4 million in fiscal year 1995, to $15.8 million for the corresponding period in fiscal year 1996. As a percentage of net sales, operating expenses increased from 50.4% during the twelve weeks ended July 15, 1995, to 52.4% during the corresponding period in 1996. The increase was the result of higher maintenance costs and advertising costs. General and administrative expenses decreased, as a percentage of net sales, from 7.1% during the twelve weeks ended July 15, 1995, to 5.9% during the corresponding period of fiscal year 1996. The decrease has come from attrition at the corporate level, reduction in training costs associated with new restaurant openings, and a reduction of in-house marketing costs. Depreciation and amortization expense decreased, as a percentage of net sales, from 7.8% in the 1995 twelve-week period, to 6.7% in the 1996 twelve-week period. This decrease was attributable to the amortization expense on fewer new restaurants. Taxes, other than income taxes, increased from $1.5 million during the twelve weeks ended July 15, 1995, to $1.6 million in the corresponding 1996 period, and decreased, as a percentage of net sales, from 5.3% for 1995 to 5.2% for 1996. The percentage decrease was due to lower state unemployment tax rates on payroll. Interest expense increased from $292,000 to $323,000 for the corresponding twelve weeks of 1995 and 1996, respectively. The increase was attributable to the higher amounts of bank borrowings, as well as higher interest rates during the 1996 period. The effective income tax rate increased from 35.8% for the twelve weeks ended July 15, 1995, to 37.4% for the corresponding period ended July 13, 1996. The increase in tax rate is attributable to the expiration of the Targeted Sales Tax Credit program, and reduction of start-up costs associated with fewer new store openings. Twenty-Eight Weeks Ended July 13, 1996, Compared To Twenty-Eight Weeks Ended July 15, 1995 Net sales increased $4.5 million, or 7.1%, to $68.5 million for the twenty-eight-week period in 1996, compared to $64.0 million in the same period last year. New restaurants that were opened in 1995 and 1996 contributed to the increase. Comparative restaurant sales during the twenty-eight-week period were negative by 0.8%, which was attributable to the severe winter weather early in the year. Menu price-increases for the period under comparison were less than 2.0%. Cost of sales, primarily food and beverages, increased from $16.3 million for the 1995 twenty- eight-week period, to $17.4 million for the 1996 twenty-eight-week period, and decreased slightly, as a percentage of net sales, from 25.5% to 25.4% for the twenty-eight-week periods ended in 1995 and 1996, respectively. While the costs of flour, cheese, and produce increased during the comparable period, the Company was able to offset the increase through more efficient operations. Restaurant operating expenses for the twenty-eight-week period increased from $31.7 million in fiscal year 1995, to $35.7 million in fiscal year 1996. As a percentage of net sales, operating expenses increased from 49.6% during the twenty-eight weeks ended July 15, 1995, to 52.2% during the corresponding period in 1996. The increase was the result of advertising costs of 2.3%, as a percentage of net sales, that were over and above the amount expensed in the first twenty-eight weeks of 1995. In addition, costs for maintenance and labor also increased during the 1996 fiscal year period. General and administrative expenses, as a percentage of net sales for the twenty-eight-week period, decreased from 7.3% in 1995, to 6.2% in 1996. This decrease was the result of attrition at the corporate level, reduction in training costs associated with new restaurant openings, and a reduction of in-house marketing costs. Depreciation and amortization expense, as a percentage of net sales, decreased from 7.8% in the 1995 twenty-eight-week period, to 6.9% in the 1996 twenty-eight-week period. This decrease was attributable to the amortization expense on fewer new restaurants. Taxes, other than income taxes, increased from $3.4 million during the twenty-eight weeks ended July 15, 1995, to $3.7 million for the corresponding period in 1996, and remained, as a percentage of net sales, at 5.4% for both the 1995 and 1996 periods. Interest expense increased from $615,000 to $741,000 for the corresponding twenty-eight-week periods of 1995 and 1996, respectively. The increase was attributable to higher interest rates and the higher amounts of bank borrowings during the 1996 period. The effective income tax rate increased from 36.2% for the twenty-eight weeks ended July 15, 1995, to 37.5% for the corresponding period ended July 13, 1996. The increase in tax rate is attributable to the expiration of the Targeted Sales Tax Credit program, and reduction of start-up costs associated with fewer new store openings. Liquidity and Sources of Capital To date, the Company has financed its expansion from operations, bank borrowing, and private placements and public offerings of equity securities. The Company does not have significant receivables or inventory, and receives trade credit based upon negotiated terms in purchasing food and supplies. The Company has a bank line-of-credit in effect until November 30, 1997, under which it may borrow up to $30.0 million. On November 30, 1997, the Company will be able to convert the balance, if any, to a term loan maturing on November 30, 2000. The Company pays a fee of 1/4 of 1% on the unused balance, and interest is calculated using LIBOR plus 1.25%. There are no compensating balance arrangements or legal restrictions as to the withdrawal of these funds. The amounts outstanding under this bank line-of-credit for both July 15, 1995, and July 13, 1996, was $19.4 million. During the twenty-eight weeks ended July 15, 1995, and July 13, 1996, the Company's investment in property and equipment was $9.2 million and $7.0 million, respectively. The investments were funded with cash provided by operations and with the proceeds of financing activities. Cash provided by operations amounted to $3.9 million and $7.4 million for the twenty-eight weeks ended July 15, 1995, and July 13, 1996, respectively. Cash from financing activities amounted to $5.5 million for the twenty-eight-week period in 1995. The Company opened four new restaurants in the first twenty-eight weeks of 1996, and expects to open a total of seven to eight new restaurants by the end of fiscal year 1996, with an additional five to six restaurants planned for fiscal year 1997. The Company expects to expend approximately $12.0 million in fiscal year 1996, and approximately $10.0 million in fiscal year 1997, to finance expansion. The Company believes that it will have sufficient working capital and bank borrowings to finance its expansion plans through the end of fiscal year 1997. PART II: OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS UPON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None Item 5. OTHER INFORMATION None Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 27: Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed during the period covered by this report. 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. BERTUCCI'S, INC. (Registrant) Date: August 23, 1996 By: /s/ Joseph Crugnale ------------------- Joseph Crugnale President and Chief Executive Officer Date: August 23, 1996 By: /s/ Norman S. Mallett --------------------- Norman S. Mallett Vice President - Finance Chief Financial Officer and Treasurer EX-27 2 ARTICLE 5 FDS FOR SECOND QUARTER 10-Q
5 (Replace this text with the legend) 0000874971 Bertucci's Inc. 1000 6-MOS DEC-28-1996 JUL-13-1996 1,146 0 218 0 995 4,274 120,815 28,098 101,510 10,767 0 0 0 44 65,341 101,510 68,494 68,494 17,387 17,387 44,148 0 731 1,973 739 1,234 0 0 0 1,234 0.14 0.14
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