-----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, J2o0i1QRYZ5PT+yPFjF/zcTKerOZusu6z54rd+iPBTDk35fhtSfyDAz9hmYiTZSP 6hpmLpdR7UqhymKdLRbKcw== 0000914427-97-000130.txt : 19971118 0000914427-97-000130.hdr.sgml : 19971118 ACCESSION NUMBER: 0000914427-97-000130 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971004 FILED AS OF DATE: 19971117 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: SEC FILE NUMBER: 000-19315 FILM NUMBER: 97722560 BUSINESS ADDRESS: STREET 1: 14 AUDUBON RD 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 1997 THIRD QUARTER 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the Quarterly Period Ended October 4, 1997 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: (781) 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 November 14, 1997, 8,875,716 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 October 4, 1997, and December 28, 1996 4 2) Consolidated Condensed Statements of Operations For Twelve Weeks And Forty Weeks Ended October 4, 1997, and October 5, 1996 5 3) Consolidated Condensed Statements of Shareholders' Equity For The Forty-Week Period Ended October 4, 1997 6 4) Consolidated Condensed Statements of Cash Flows For Forty Weeks Ended October 4, 1997, and October 5, 1996 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 PART II: OTHER INFORMATION 13
PART I:FINANCIAL INFORMATION BERTUCCI'S, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
October 4, December 28, 1997 1996 -------------------------------------- (in thousands) -------------------------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,161 $ 4,266 Inventories 1,077 1,048 Accounts receivable 157 179 Note receivable 76 76 Prepaid expenses 1,131 475 Deferred preopening costs 324 510 Prepaid taxes 1,027 1,027 --------------------- -------------------- Total current assets 7,953 7,581 --------------------- -------------------- PROPERTY AND EQUIPMENT, at cost: Land 2,902 2,902 Buildings 10,434 10,360 Leasehold improvements 75,019 72,416 Machinery and equipment 38,549 35,674 Construction in progress 227 250 --------------------- -------------------- 127,131 121,602 Less - Accumulated depreciation 36,144 29,705 --------------------- -------------------- Net property and equipment 90,987 91,897 PREPAID TAXES 1,275 1,275 OTHER ASSETS 1,834 1,776 --------------------- -------------------- $ 102,049 $ 102,529 ===================== ==================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable-current $ 25 $ 25 Accounts payable 4,382 4,179 Accrued expenses 2,496 1,078 Accrued payroll and employee benefits 3,271 3,298 Accrued taxes 1,271 1,859 --------------------- -------------------- Total current liabilities 11,445 10,439 DEFERRED RENT 6,569 6,064 NOTES PAYABLE 25 50 LONG-TERM DEBT 13,500 18,438 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 - 8,790,428 shares at December 28, 1996 and 8,873,966 shares at October 4, 1997 44 44 Additional paid-in capital 45,073 44,841 Retained earnings 25,393 22,653 --------------------- -------------------- Total shareholders' equity 70,510 67,538 --------------------- -------------------- $ 102,049 $ 102,529 ===================== ====================
BERTUCCI'S, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
12 Weeks Ended 40 Weeks Ended ------------------------------------------ ---------------------------------------- October 4, October 5, October 4, October 5, 1997 1996 1997 1996 ------------------ ------------------ -- --------------- -- --------------- (in thousands, except per share data) --------------------------------------------------------------------------------------- NET SALES $ 32,663 $ 29,549 $ 104,644 $ 98,043 ------------------ ------------------ -- --------------- -- --------------- COSTS AND EXPENSES: Cost of sales 8,130 7,538 26,077 24,925 Operating expenses 17,253 15,195 55,029 50,920 General and administrative expenses 1,992 1,683 6,324 5,938 Depreciation and amortization 1,935 2,074 6,642 6,829 Taxes other than income 1,630 1,516 5,453 5,184 ------------------ ------------------ -- --------------- -- --------------- Total costs and expenses 30,940 28,006 99,525 93,796 ------------------ ------------------ -- --------------- -- --------------- Operating income 1,723 1,543 5,119 4,247 INTEREST EXPENSE 214 279 835 1,020 INTEREST INCOME 18 3 25 13 ------------------ ------------------ -- --------------- -- --------------- Income before income tax expense 1,527 1,267 4,309 3,240 INCOME TAX EXPENSE 554 475 1,569 1,214 ------------------ ------------------ -- --------------- -- --------------- Net income $ 973 $ 792 $ 2,740 $ 2,026 ================== ================== == =============== == =============== EARNINGS PER SHARE $ 0.11 $ 0.09 $ 0.31 $ 0.23 ================== ================== == =============== == =============== WEIGHTED AVERAGE SHARES OUTSTANDING 8,927,595 8,860,253 8,901,860 8,883,798 ================== ================== == =============== == ===============
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 28, 1996 8,790 $ 44 $ 44,841 $ 22,653 $ 67,538 Issuance of stock 29 - 130 - 130 Exercise of options 55 - 102 - 102 Net income - - - 2,740 2,740 ---------- ------------ -- ---------- ------------- -- ------------ BALANCE, October 4, 1997 8,874 $ 44 $ 45,073 $ 25,393 $ 70,510 ========== ============ == ========== ============= == ============
BERTUCCI'S, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Forty Weeks Ended ---------------------------------------------- October 4, October 5, 1997 1996 ---------------------------------------------- (in thousands) ---------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 2,740 $ 2,026 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 6,905 7,041 Increase in inventories (29) (46) (Increase) decrease in prepaid expenses and accounts receivable, notes receivable and other assets (581) 231 Increase (decrease) in accounts payable 202 (1,311) Increase in accrued expenses and deferred rent 1,897 227 Increase (decrease) in accrued, deferred and prepaid taxes (588) 1,102 ---------------------------------------------- Net cash provided by operations 10,546 9,270 ---------------------------------------------- CASH FLOWS USED FROM INVESTING ACTIVITIES: Additions to preopening costs (279) (982) Additions to property and equipment (5,530) (8,075) Purchases of liquor licenses (112) - ---------------------------------------------- Net cash used by investing activities (5,921) (9,057) ---------------------------------------------- ---------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock 232 122 Paydown of debt (4,937) - Decrease in notes payable (25) (25) ---------------------------------------------- Net cash provided by financing activities (4,730) 97 ---------------------------------------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (105) 310 CASH AND CASH EQUIVALENTS, beginning of period 4,266 1,384 ---------------------------------------------- CASH AND CASH EQUIVALENTS, end of period $ 4,161 $ 1,694 ============================================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for --- Interest, net of amount capitalized $ 900 $ 1,019 ============================================== Income taxes $ 2,490 $ 80 ==============================================
BERTUCCI'S, INC. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS October 4, 1997 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 forty-week periods ended October 4, 1997, 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 to Consolidated Financial Statements in the Company's 1996 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 1996 Annual Report and Form 10-K. 2. Earnings Per Share In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128). This Statement establishes standards for computing and presenting earnings per share and applies to entities both publicly traded common stock or potential common stock. SFAS 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997, and early adoption is not permitted. When adopted, the Statement will require restatement of prior years' earnings per share. The Company will adopt this Statement for its annual report on Form 10-K for the year ended December 27, 1997. Assuming that SFAS 128 had been implemented, basic earnings per share would have been $0.11 versus $0.09 for the twelve-week period, and $0.31 versus $0.23 for the forty- week period, ended October 4, 1997, and October 5, 1996, respectively, and $0.36 for the year ended December 28, 1996. Under this Statement, diluted earnings per share would not have differed from the earnings per share disclosed on the consolidated condensed statement of operations. 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 40 Weeks Ended ---------------------------------- --------------------------------- October 4, October 5, October 4, October 5, 1997 1996 1997 1996 ---------------- --------------- --------------- --------------- NET SALES 100.0% 100.0% 100.0% 100.0% ---------------- --------------- --------------- --------------- COSTS AND EXPENSES: Cost of sales 24.9 25.5 24.9 25.4 Operating expenses 52.8 51.5 52.6 51.9 General and administrative expenses 6.1 5.7 6.0 6.1 Depreciation and amortization 5.9 7.0 6.4 7.0 Taxes other than income 5.0 5.1 5.2 5.3 ---------------- --------------- --------------- --------------- Total costs and expenses 94.7 94.8 95.1 95.7 ---------------- --------------- --------------- --------------- Operating income 5.3 5.2 4.9 4.3 INTEREST EXPENSE 0.6 0.9 0.8 1.0 INTEREST INCOME 0.0 0.0 0.0 0.0 ---------------- --------------- --------------- --------------- Income before income tax expense 4.7 4.3 4.1 3.3 INCOME TAX EXPENSE 1.7 1.6 1.5 1.2 ---------------- --------------- --------------- --------------- Net income 3.0% 2.7% 2.6% 2.1% ================ =============== =============== =============== NUMBER OF RESTAURANTS: Restaurants open at beginning of period 81 77 80 76 Restaurants opened during period 2 2 3 6 Restaurants closed during period 0 0 0 (3) ---------------- --------------- --------------- --------------- Restaurants open at end of period 83 79 83 79
Twelve Weeks Ended October 4, 1997, Compared To Twelve Weeks Ended October 5, 1996 Net sales increased $3.1 million, or 10.5%, to $32.7 million in the third quarter of fiscal year 1997, from $29.5 million in the third quarter of fiscal year 1996. Comparable restaurant sales for the twelve-week period increased 7.4%. The Company opened two new restaurants in the twelve-week period ended October 4, 1997. Cost of sales, primarily food and beverages, increased from $7.5 million in the twelve weeks ended October 5, 1996, to $8.1 million in the corresponding 1997 period. As a percentage of net sales, these costs were 25.5% in the 1996 fiscal period, and 24.9% in the corresponding 1997 fiscal period. The percentage decrease was the result of lower prices for flour and cheese, and more efficient operations. Restaurant operating expenses for the twelve-week period increased from $15.2 million in fiscal year 1996, to $17.3 million for the corresponding period in fiscal year 1997. As a percentage of net sales, operating expenses increased from 51.5% during the twelve weeks ended October 5, 1996, to 52.8% during the corresponding period in 1997. The increase was the result of higher advertising costs. General and administrative expenses increased, as a percentage of net sales, from 5.7% during the twelve weeks ended October 5, 1996, to 6.1% during the corresponding period of fiscal year 1997. The increase was the result of higher training and in-house marketing costs. Depreciation and amortization expense decreased, as a percentage of net sales, from 7.0% in the 1996 twelve-week period, to 5.9% in the 1997 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 October 5, 1996, to $1.6 million for the corresponding period in 1997, and decreased, as a percentage of net sales, from 5.1% in 1996, to 5.0% in 1997. Interest expense decreased from $279,000 to $214,000 for the corresponding twelve weeks of 1996 and 1997, respectively. The decrease was attributable to the lower amount of bank borrowings during the 1997 period. The effective income tax rate decreased from 37.5% for the twelve weeks ended October 5, 1996, to 36.3% for the corresponding period ending October 4, 1997. Forty Weeks Ended October 4, 1997, Compared To Forty Weeks Ended October 5, 1996 Net sales increased $6.6 million, or 6.7%, to $104.6 million for the forty-week period in 1997, compared to $98.0 million in the same period last year. New restaurants that were opened in 1996 and 1997 contributed to the increase. Comparative restaurant sales during the forty-week period were positive by 2.7%. Menu price-increases for the period under comparison were approximately 1.2% Cost of sales, primarily food and beverages, increased from $24.9 million for the 1996 forty- week period, to $26.1 million for the 1997 forty-week period, and decreased, as a percentage of net sales, from 25.4% to 24.9% for the forty-week periods ended in 1996 and 1997, respectively. The percentage decrease came from better buying opportunities and improved efficiency at the operations level. Restaurant operating expenses for the forty-week period increased from $50.9 million in fiscal year 1996, to $55.0 million in fiscal year 1997. As a percentage of net sales, operating expenses increased from 51.9% during the forty weeks ended October 5, 1996, to 52.6% during the corresponding period in 1997. The increase was the result of higher payroll and advertising costs. General and administrative expenses increased from $5.9 million for the forty-week period in 1996, to $6.3 million in the same period of 1997, and decreased, as a percentage of net sales, from 6.1% to 6.0% for the forty-week periods ended in 1996 and 1997, respectively. Depreciation and amortization expense, as a percentage of net sales, decreased from 7.0% in the 1996 forty-week period, to 6.4% in the 1997 forty-week period. This decrease was attributable to the amortization expense on fewer new restaurants. Taxes, other than income taxes, increased from $5.2 million during the forty weeks ended October 5, 1996, to $5.5 million for the corresponding period in 1996, and decreased, as a percentage of net sales, from 5.3% in 1996, to 5.2% in 1997. Interest expense decreased from $1.0 million to $835,000 for the corresponding forty-week periods of 1996 and 1997, respectively. The decrease was attributable to the lower amounts of bank borrowings during the 1997 period. The effective income tax rate decreased from 37.5% for the forty weeks ended October 5, 1996, to 36.4% for the corresponding period ending October 4, 1997. 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. At October 5, 1996, and October 4, 1997, the amounts outstanding under this bank line-of-credit were $19.4 million and $13.5 million, respectively. During the forty weeks ended October 5, 1996, and October 4, 1997, the Company's investment in property and equipment was $8.1 million and $5.5 million, respectively. The investments were funded with cash provided by operations and with the proceeds of financing activities. Cash provided by operations amounted to $9.3 million and $10.5 million for the forty weeks ended October 5, 1996, and October 4, 1997, respectively. The Company opened three new restaurants in the first forty weeks of 1997, and expects to open two more new restaurants by the end of fiscal year 1997, with an additional 8 to 10 restaurants planned for fiscal year 1998. The Company expects to expend approximately $8.5 million in fiscal year 1997, and approximately $11.0 million in fiscal year 1998, to finance expansion. The Company believes that it will have sufficient working capital and bank borrowings to finance its expansion plans throught the end of fiscal year 1998. 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: November 14, 1997 By: /s/ Joseph Crugnale Joseph Crugnale President and Chief Executive Officer Date: November 14, 1997 By: /s/ Norman S. Mallett Norman S. Mallett Vice President - Finance Chief Financial Officer and Treasurer EX-27 2 ARTICLE 5 FDS FOR THIRD QUARTER 10-Q
5 0000874971 Bertucci's Inc. 1000 9-MOS DEC-27-1997 OCT-04-1997 4,161 0 233 0 1,077 7,953 127,131 31,144 102,049 11,445 0 0 0 44 70,466 102,049 104,644 104,644 26,077 26,077 67,124 0 810 4,309 1,569 2,740 0 0 0 2,740 0.31 0.31
-----END PRIVACY-ENHANCED MESSAGE-----