<PAGE> 1
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended JULY 11, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ______________
Commission file number: 0-28234
CASA OLE RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0493269
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
1135 EDGEBROOK, HOUSTON, TEXAS 77034-1899
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 713/943-7574
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Number of shares outstanding of each of the issuer's classes of common stock,
as of August 21, 1997: 3,597,705 SHARES OF COMMON STOCK, PAR VALUE $.01.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CASA OLE' RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS 12/27/96 7/11/97
------------ ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,419,305 $ 847,123
Marketable securities (approximates fair value) 1,007,255 --
Royalties receivable 110,254 149,980
Receivables from affiliates 14,000 13,000
Other receivables 195,287 314,962
Notes receivable -- 115,000
Inventory 197,475 418,572
Prepaid expenses and other current assets 260,459 770,862
------------ ------------
Total current assets 8,204,035 2,629,499
------------ ------------
Property, plant and equipment 7,326,761 18,318,341
Less accumulated depreciation 3,470,953 3,716,304
------------ ------------
Net property, plant and equipment 3,855,808 14,602,037
Goodwill, net 57,678 6,338,443
Other assets 28,252 58,181
------------ ------------
$ 12,145,773 $ 23,628,160
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 34,469 $ 1,014,784
Accounts payable 532,039 1,103,727
Income taxes payable 352,375 79,001
Accrued sales and liquor taxes 132,407 265,452
Accrued payroll and taxes 266,597 789,893
Accrued expenses 29,420 562,648
------------ ------------
Total current liabilities 1,347,307 3,815,505
------------ ------------
Long-term debt -- 8,122,709
Deferred income taxes 35,577 35,577
Other long-term liabilities 42,500 63,500
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized -- --
Capital stock, $0.01 par value, 20,000,000 shares 47,327 47,327
authorized, 4,732,705 shares issued
Additional paid-in capital 20,685,610 20,685,610
Retained earnings 1,337,452 2,207,932
Treasury stock, cost of 1,135,000 shares (11,350,000) (11,350,000)
------------ ------------
Total stockholders' equity 10,720,389 11,590,869
------------ ------------
$ 12,145,773 $ 23,628,160
============ ============
</TABLE>
2
<PAGE> 3
CASA OLE' RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
28-WEEK PERIODS ENDED 12-WEEK PERIODS ENDED
7/12/96 7/11/97 7/12/96 7/11/97
------------ ------------ ---------- -----------
<S> <C> <C> <C> <C>
Revenues:
Restaurant sales $ 9,090,282 $ 12,580,204 $3,976,742 $ 5,912,011
Franchise fees 472,008 531,769 239,820 198,637
Other 47,257 29,607 27,585 8,899
------------ ------------ ---------- -----------
9,609,547 13,141,580 4,244,147 6,119,547
------------ ------------ ---------- -----------
Costs and expenses:
Cost of sales 2,057,330 2,828,627 924,242 1,366,520
Restaurant operating expenses 5,241,237 7,360,398 2,301,485 3,455,207
General and administrative 1,097,997 1,379,405 375,743 636,231
Depreciation and amortization 93,894 310,364 39,459 177,412
------------ ------------ ---------- -----------
8,490,458 11,878,794 3,640,929 5,635,370
------------ ------------ ---------- -----------
Operating income 1,119,089 1,262,786 603,218 484,177
------------ ------------ ---------- -----------
Other income (expense):
Interest 65,678 128,328 79,506 69,684
Other, net 140,690 (1,140) 39,334 (3,864)
------------ ------------ ---------- -----------
206,368 127,188 118,840 65,820
------------ ------------ ---------- -----------
Income before income tax expense 1,325,457 1,389,974 722,058 549,997
Income tax expense 347,382 519,494 274,717 203,499
------------ ------------ ---------- -----------
Net income $ 978,075 $ 870,480 $ 447,341 $ 346,498
============ ============ ========== ===========
Pro forma income statement data:
Net income as reported $ 978,075 $ 870,480 $ 447,341 $ 346,498
Pro forma adjustments:
Compensation and related party
expense arrangements 161,700 -- -- --
Provision for income taxes (210,422) -- -- --
------------ ------------ ---------- -----------
Pro forma net income $ 929,353 $ 870,480 $ 447,341 $ 346,498
============ ============ ========== ===========
Pro forma net income and
net income per common share $ 0.30 $ 0.24 $ 0.12 $ 0.10
============ ============ ========== ===========
Pro forma weighted average and weighted
average number of common shares 3,137,284 3,598,269 3,676,722 3,598,718
============ ============ ========== ===========
</TABLE>
3
<PAGE> 4
CASA OLE' RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
28-WEEK PERIODS ENDED
7/12/96 7/11/97
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 978,075 $ 870,480
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 93,894 310,364
Loss on sale of fixed assets 28,003 --
Changes in assets and liabilities, net of acquisition:
Royalties receivable 50,214 (39,726)
Receivable from affiliates 21,258 1,000
Other receivables (77,496) 35,326
Inventory 10,692 (48,504)
Prepaids and other current assets (200,292) (318,272)
Accounts payable 63,062 (1,575)
Accrued expenses and other liabilities 378,844 (154,555)
Other assets (20,929) (3,794)
------------ ------------
Total adjustments 347,250 (219,736)
------------ ------------
Net cash provided by operating activities 1,325,325 650,744
------------ ------------
Cash flows from investing activities:
Payment for purchase of acquisition, net of
cash acquired -- (11,479,940)
Proceeds from collection (issuance) of notes receivable 10,000 (115,000)
Net sale of marketable securities -- 1,007,255
Purchase of property, plant and equipment (293,731) (4,009,265)
Proceeds from sale of property, plant
and equipment 6,100 --
------------ ------------
Net cash used in investing activities (277,631) (14,596,950)
------------ ------------
Cash flows from financing activities:
Payment of distributions (1,313,417) --
Proceeds from issuance of Common Stock 19,792,586 --
Purchase of treasury stock (11,350,000) --
Proceeds from minority partners' contributions -- 21,000
Net borrowings under line of credit agreement -- 2,503,187
Proceeds from issuance of long-term debt -- 6,000,000
Payments of notes payable (42,603) (150,163)
------------ ------------
Net cash used in financing activities 7,086,566 8,374,024
------------ ------------
Increase (decrease) in cash and cash equivalents 8,134,260 (5,572,182)
Cash and cash equivalents at beginning of period 1,003,585 6,419,305
------------ ------------
Cash and cash equivalents at end of period $ 9,137,845 $ 847,123
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period:
Interest $ 17,348 $ 17,590
Income taxes $ -- $ 705,000
Non-cash activities:
Exchange of equipment for note balance $ 53,897 $ --
Note issued for purchase of restaurant $ -- $ 750,000
</TABLE>
4
<PAGE> 5
CASA OLE RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of Casa Ole Restaurants, Inc. (the "Company"),
the accompanying consolidated financial statements contain all
adjustments (consisting only of normal recurring accruals and
adjustments) necessary for a fair presentation of the consolidated
financial position as of July 11, 1997, and the consolidated
statements of income and cash flows for the 28-week and 12-week
periods ended July 11, 1997 and July 12, 1996. The consolidated
statements of income for the 28-week and 12-week periods ended July
11, 1997 are not necessarily indicative of the results to be expected
for the full year.
To conform to the current year presentation, certain of the
prior year balances have been reclassified. Specifically, paper and
supply costs were reclassified from cost of sales to restaurant
operating expenses.
2. ACCOUNTING POLICIES
During the interim periods the Company follows the accounting
policies set forth in its combined financial statements in its Annual
Report and Form 10-K (file number 0-28234). Reference should be made
to such financial statements for information on such accounting
policies and further financial details.
3. PRO FORMA DATA
The 1996 pro forma income statement data reflects adjustments
to compensation and related party expense arrangements, and reflects
an adjustment to the provision for income taxes to reflect a 37%
effective tax rate, as if the Company had been taxed as a C
corporation prior to the effective date of the Company's initial
public offering.
For fiscal 1996 and 1997, both primary and fully diluted net
income per share are based on the weighted average number of shares
outstanding during the year increased by dilutive common equivalent
shares (stock options and warrants) determined using the treasury
stock method. Because of the April 1996 offering date, the shares
outstanding for the first quarter of 1996 were approximately 865,000
shares less than the number outstanding thereafter.
4. PURCHASE OF MONTEREY'S ACQUISITION CORP.
The Company purchased 100% of the outstanding stock of
Monterey's Acquisition Corp. ("MAC") on July 2, 1997. The Company
purchased the shares of common stock for $4.0 million, paid off
outstanding debt and accrued interest totaling $7.1 million and funded
various other agreed upon items approximating $500,000. The
transaction was funded using cash on hand of approximately $3.0
million and funds available to the Company under its amended credit
facility. At the time of acquisition, MAC owned and operated 26
restaurants in Texas and Oklahoma under the names "Monterey's Tex-Mex
Cafe," "Monterey's Little Mexico" and "Tortuga Cantina."
The table below presents pro forma income statement
information as if the Company had purchased MAC at the beginning of
the fiscal year. Pro forma adjustments are to remove consulting fees
that are non-continuing, amortize the resulting goodwill over 40 years
and remove the pre-acquisition goodwill amortization, reflect net
interest expense on the debt resulting from the acquisition and record
additional income tax at an effective rate of 37% on the combined
5
<PAGE> 6
income of the Company and MAC. Pro forma information for fiscal 1996
was reported on Form 8-K, which was filed with the Securities and
Exchange Commission on July 16, 1997.
<TABLE>
<CAPTION>
COMPANY MAC
28-WEEKS 12/30/96
ENDED THROUGH PRO FORMA PRO FORMA
7/11/97 7/1/97 ADJUSTMENTS COMBINED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Restaurant sales $ 12,580,204 $ 10,481,361 $ -- $ 23,061,565
Franchise fees 531,769 -- -- 531,769
Other 29,607 -- -- 29,607
------------ ------------ ------------ ------------
13,141,580 10,481,361 -- 23,622,941
------------ ------------ ------------ ------------
Costs and expenses:
Cost of sales 2,828,627 2,798,983 -- 5,627,610
Restaurant operating expenses 7,360,398 5,608,565 -- 12,968,963
General and administrative 1,379,405 835,229 (99,998) 2,114,636
Depreciation and amortization 310,364 646,222 (105,584) 851,002
------------ ------------ ------------ ------------
11,878,794 9,888,999 (205,582) 21,562,211
------------ ------------ ------------ ------------
Operating income 1,262,786 592,362 205,582 2,060,730
------------ ------------ ------------ ------------
Other income (expense):
Interest 128,328 (400,161) (6,546) (278,379)
Other, net (1,140) 7,186 -- 6,046
------------ ------------ ------------ ------------
127,188 (392,975) (6,546) (272,333)
------------ ------------ ------------ ------------
Income before income tax expense 1,389,974 199,387 199,036 1,788,397
Income tax expense 519,494 -- 147,417 666,911
------------ ------------ ------------ ------------
Net income $ 870,480 $ 199,387 $ 51,619 $ 1,121,486
============ ============ ============ ============
Net income per common share $ .24 $ .31
======= =======
</TABLE>
5. NEW FINANCIAL ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board
issued SFAS No. 128, Earnings Per Share. SFAS No. 128 replaces primary
earnings per share and fully diluted earnings per share with basic
earnings per share (net income divided by the weighted average common
shares outstanding without the dilutive effects of common stock
equivalents) and diluted earnings per share, respectively. SFAS No.
128 is effective for financial statements for both interim and annual
periods ending after December 15, 1997, with earlier application not
permitted. Effective December 1997, the Company will be required to
adopt SFAS No. 128.
6. INITIAL PUBLIC OFFERING
The Company announced its initial public offering of
2,000,000 shares of Common Stock at a price of $11.00 per share on
April 25, 1996. On May 1, 1996, the Company redeemed 1,135,000 shares
of Common Stock for $10.00 per share from a principal of the Company.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: accelerating growth strategy; dependence on
executive officers; geographic concentration increasing susceptibility to
adverse conditions in the region; changes in consumer tastes and eating habits;
national, regional or local economic and real estate conditions; demographic
trends; inclement weather; traffic patterns; the type, number and location of
competing restaurants; inflation; increased food, labor and benefit costs; the
availability of experienced management and hourly employees; seasonality and
the timing of new restaurant openings; changes in governmental regulations;
dram shop exposure; and other factors not yet experienced by the Company. The
use of words such as "believes", "anticipates", "expects", "intends" and
similar expressions are intended to identify forward-looking statements, but
are not the exclusive means of identifying such statements. Readers are urged
to carefully review and consider the various disclosures made by the Company in
this report and in the Company's Annual Report and Form 10-K for the fiscal
year ended December 27, 1996, that attempt to advise interested parties of the
risks and factors that may affect the Company's business.
RESULTS OF OPERATIONS
The Company closed on its purchase of 100% of the outstanding stock of
Monterey's Acquisition Corp. ("MAC") on July 2, 1997. Accordingly, the results
of operations presented below include the operations of the 26 MAC units from
the date of closing through the end of the Company's second quarter on July 11,
1997. Pro forma information as if the Company had owned MAC for the
twenty-eight weeks ended July 11, 1997 is presented in note 4 of the notes to
consolidated financial statements included herein.
Revenues. The Company's revenues for the second quarter of fiscal 1997
were up 44.2% to $6.1 million over revenues of $4.2 million for the same
quarter a year ago. Restaurant sales for the second quarter of 1997 were up
$1.9 million over the same quarter a year ago, to $5.9 million. Sales at
restaurants operating in both fiscal quarters ("same-stores") were up 1.5% over
last year's same quarter, accounting for $60,000 of the increase. Additionally,
the 26 MAC units contributed $678,000. The remaining increase was due to the
additional sales contributed by the Company's new stores.
For the 28 weeks ended July 11, 1997, revenues increased $3.5 million,
or 36.8 %, to $13.1 million. Year to date same-store sales were up 3.1% over
the prior year, contributing almost $250,000 to the increase. The remaining
increase was due to the Company's new stores and the acquisition of MAC.
Costs and Expenses. Cost of sales as a percentage of restaurant sales
during the current quarter was 23.1% as compared to 23.2 in the same quarter
last year. Excluding the impact of MAC, cost of sales was 22.5%. This slight
decrease was the result of the modest menu price increases implemented in the
fall of 1996.
On a year-to-date basis, cost of sales as a percentage of restaurant
sales was 22.5%, only slightly down from the prior year-to-date percentage of
22.6%.
Restaurant operating expenses increased $1.15 million, or 50.1%, in
the second quarter of 1997, as compared with the second quarter of 1996. As a
percentage of restaurant sales, restaurant operating expenses increased to
58.4% in the current quarter, as compared to 57.9% in the same quarter last
year.
7
<PAGE> 8
This .5% increase as a percent of restaurant sales in the current quarter
was a result of higher labor and training costs in the Company's new Casa Ole
restaurants, offset by lower operating costs in the MAC units.
Restaurant operating expenses as a percentage of restaurant sales for
the 28 weeks just ended were 58.5%, up from 57.7% in the prior year. The
increase was a result of the higher labor and training costs experienced in the
Company's new Casa Ole units.
General and administrative expenses (G&A) increased $260,000, or
69.3%, in the second quarter as compared with the prior year's same quarter. As
a percentage of total revenues, G&A increased to 10.4% in the second quarter of
1997, from 8.9% in the second quarter of 1996. This increase was due to
training costs that were incurred for new stores that were not considered
preopening costs, pay rate increases for certain employees effective at the
beginning of fiscal 1997, the addition of corporate personnel and higher legal
expenses.
Year-to-date G&A was 10.5% of total revenues, as compared to 11.4% for
the same period last year. The prior year G&A included approximately $162,000
of related party expense that was not a component of the current year expenses.
Giving effect to this, G&A as a percentage of total revenues would have been
9.7% for the 28 weeks ended July 12, 1996. The increase from 9.7% to 10.5% was
attributed to the same items as discussed for the current quarter.
Depreciation and amortization expense (D&A) as a percentage of total
revenues increased for the quarter and year-to-date to 2.9% from 0.9%, and to
2.4% from 1.0%, respectively. These increases were a direct result of the
addition of depreciable assets related to Company's four new store openings
since the second quarter of 1996, along with added depreciation and
amortization related to two stores acquired from prior franchisees. As the
Company opens new restaurants, D&A as a percentage of total revenues is
expected to continue to increase.
Other Income (Expense). Net other income as a percentage of total
revenues decreased to 1.1% for the second quarter and 1.0% for the year, from
2.8% and 2.1% for the prior year same periods, respectively. The net decrease
in both the quarter and year-to-date amount was due to the constant reduction
in interest income as the proceeds from the 1996 initial public offering were
used for construction projects and the acquisition of MAC. Additionally, during
the second quarter of fiscal 1996, the Company received and recorded a $60,000
rent refund that related to years prior to fiscal 1996.
Income Tax Expense. Prior to the Company's initial public offering in
April 1996, substantially all of the predecessor corporations elected to be
taxed as S corporations under the provisions of Subchapter S of the Internal
Revenue Code. As a result of such election, federal income taxes on the net
income of these corporations were payable personally by the shareholders. The
provision for income taxes reflected in the first quarter of fiscal 1996 is for
state franchise taxes on all restaurants and for federal income taxes on the
predecessor corporations that were taxable as C corporations. The effective tax
rates on those corporations were less than the expected rates due to applicable
graduated tax rates. The provision for income taxes reflected in quarters
subsequent to the initial public offering reflects an estimated 37% effective
tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $651,000 for the 28
weeks ended July 11, 1997, compared to $1,325,000 for the same period last
year. This decrease was attributed to lower net income coupled with a reduction
in accrued liabilities for the payment of federal income taxes and with other
changes in various components of working capital. At July 11, 1997, the Company
had a working capital deficit of $1.2 million, which is common in the
restaurant industry, since restaurant companies do not typically require a
significant investment in either accounts receivable or inventory.
8
<PAGE> 9
During the first 28 weeks of 1997, capital expenditures on property,
plant and equipment were approximately $4.0 million as compared to
approximately $294,000 for the same period of 1996. Capital expenditures during
the year-to-date period included the acquisition of real estate for its
restaurant in Pocatello, Idaho, which opened just after the end of the second
quarter; construction costs for the Company's prototype restaurant which opened
in Plainview, Texas on March 18; and construction costs on sites in Bryan and
Lubbock, Texas, which opened during the second quarter. Additionally, the
Company had cash outlays for necessary replacement equipment in various older
units. In addition to capital outlays, the Company acquired the assets of one
of its franchise locations during the first quarter for a $750,000 note payable
to the prior franchisee, of which $575,000 was allocated to goodwill and the
remainder was allocated primarily to fixed assets.
During the second quarter, the Company closed on its acquisition of
the stock of MAC. The Company purchased the shares of common stock for $4.0
million, paid off outstanding debt and accrued interest totaling $7.1 million
and funded various other agreed upon items approximating $500,000. The
transaction was funded using cash on hand of approximately $3.0 million and
funds available to the Company under its amended credit facility.
To facilitate the acquisition of MAC, the Company negotiated an
amendment to its existing $10 million credit facility with NationsBank. Terms,
including applicable interest rates, of the amended facility are similar to
those in the original facility, however, the facility was expanded to $13
million, with $6 million designated as a term note payable over six years, and
the remaining $7 million designated as a revolving credit line. At July 11,
1997, the Company had $6 million outstanding under the term facility and
approximately $2.5 million outstanding under the revolver. The revolving line
may be used for certain acquisitions, construction of new units and other
working capital needs. The line no longer restricts the Company's use solely
for the acquisition of one of the Company's franchisees.
Capital expenditures over the next 12 months are anticipated to
approximate $10 million, which includes constructing or converting six to eight
new units through a combination of Company-owned and market partner
arrangements and remodeling various units across all concepts. Additionally,
the Company plans to experiment with converting at least one Monterey's Tex-Mex
Cafe to a Casa Ole and at least one Monterey's Tex-Mex Cafe to a Monterey's
Little Mexico. Immediately after the end of the second quarter, the Company
opened a Casa Ole in Pocatello, Idaho and a Tortuga Cantina in Baytown, Texas.
Management of the Company anticipates that cash flow from operations,
combined with the remaining availability under the $13 million credit facility,
will be sufficient to fund these planned capital expenditures. Planned capital
expenditures as presented do not include the potential acquisition of any of
the Company's franchised units or any other Mexican restaurant concept.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit
Number Document Description
------ --------------------
2.1 Stock Purchase Agreement by and among Casa
Ole Restaurants, Inc., Monterey's
Acquisition Corp. and the shareholders
listed on Annex "A" thereto (incorporated by
reference to Exhibit 2 to the Company's
Current Report on Form 8-K filed July 16,
1997)
10.1 Credit Agreement dated as of July 10, 1996
between Casa Ole Restaurants, Inc. and
NationsBank of Texas, N.A., as amended by
that certain Amendment No. 1 dated as of
January 13, 1997 and by that certain
Amendment No. 2 dated as of June 30, 1997
(incorporated by reference to Exhibit 10 to
the company's Current Report on Form 8-K
filed July 16, 1997)
11.1 Statement re Computation of Net Income Per
Share
20.1 Press release dated July 3, 1997
(incorporated by reference to Exhibit 20 to
the Company's Current Report on Form 8-K
filed July 16, 1997)
27.1 Financial Data Schedule
(b) REPORTS ON FORM 8-K
The Company filed a Form 8-K Current Report with the Securities
and Exchange Commission on July 16, 1997 regarding the Company's
acquisition of Monterey's Acquisition Corp.
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASA OLE RESTAURANTS, INC.
Dated: August 21, 1997 By: /s/ Louis P. Neeb
-----------------------
Louis P. Neeb
Chairman and Chief Executive Officer
(Principal Executive Officer)
Dated: May 21, 1997 By: /s/ Stacy M. Riffe
-----------------------
Stacy M. Riffe
Vice President, Chief Financial Officer,
Secretary & Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
------ --------------------
<S> <C>
2.1 Stock Purchase Agreement by and among Casa
Ole Restaurants, Inc., Monterey's
Acquisition Corp. and the shareholders
listed on Annex "A" thereto (incorporated by
reference to Exhibit 2 to the Company's
Current Report on Form 8-K filed July 16,
1997)
10.1 Credit Agreement dated as of July 10, 1996
between Casa Ole Restaurants, Inc. and
NationsBank of Texas, N.A., as amended by
that certain Amendment No. 1 dated as of
January 13, 1997 and by that certain
Amendment No. 2 dated as of June 30, 1997
(incorporated by reference to Exhibit 10 to
the company's Current Report on Form 8-K
filed July 16, 1997)
11.1 Statement re Computation of Net Income Per
Share
20.1 Press release dated July 3, 1997
(incorporated by reference to Exhibit 20 to
the Company's Current Report on Form 8-K
filed July 16, 1997)
27.1 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 11.1
CASA OLE' RESTAURANTS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
28-WEEK PERIODS ENDED 12-WEEK PERIODS ENDED
7/12/96 7/11/97 7/12/96 7/11/97
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income (or pro forma net income)
applicable to common stock $ 929,353 $ 870,480 $ 447,341 $ 346,498
=========== =========== =========== ===========
Computation of weighted average common shares:
Shares issued pursuant to
contribution agreement 2,732,705 2,732,705 2,732,705 2,732,705
Shares issued in initial public offering 2,000,000 2,000,000 2,000,000 2,000,000
Shares redeemed (1,135,000) (1,135,000) (1,135,000) (1,135,000)
Effect of days outstanding on
weighted average calculation (516,352) -- (51,488) --
Assumed net common share
equivalents of options and warrants
using the treasury stock method 55,931 564 130,505 1,013
----------- ----------- ----------- -----------
3,137,284 3,598,269 3,676,722 3,598,718
=========== =========== =========== ===========
Net income per share $ 0.30 $ 0.24 $ 0.12 $ 0.10
=========== =========== =========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUL-31-1997
<CASH> 847,123
<SECURITIES> 0
<RECEIVABLES> 592,942
<ALLOWANCES> 0
<INVENTORY> 418,572
<CURRENT-ASSETS> 2,629,499
<PP&E> 18,318,341
<DEPRECIATION> 3,716,304
<TOTAL-ASSETS> 23,628,160
<CURRENT-LIABILITIES> 3,815,505
<BONDS> 0
0
0
<COMMON> 47,327
<OTHER-SE> 11,543,542
<TOTAL-LIABILITY-AND-EQUITY> 23,628,160
<SALES> 12,580,204
<TOTAL-REVENUES> 13,141,580
<CGS> 2,828,627
<TOTAL-COSTS> 10,189,025
<OTHER-EXPENSES> 1,689,769
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (127,188)
<INCOME-PRETAX> 1,389,974
<INCOME-TAX> 519,494
<INCOME-CONTINUING> 870,480
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 870,480
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
</TABLE>
