<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 OCTOBER 3, 1999
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
MEXICAN 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 November 8, 1999: 3,597,705 SHARES OF COMMON STOCK, PAR VALUE $.01.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
Item 1Financial Statements
Mexican Restaurants, Inc.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS 10/3/99 1/3/99
------------- --------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 189,069 $ 462,847
Royalties receivable 93,067 70,711
Other receivables 557,402 280,335
Inventory 672,406 459,260
Taxes receivable 6,593 547,272
Prepaid expenses and other current assets 499,130 383,365
------------- --------------
Total current assets 2,017,667 2,203,790
------------- --------------
Property, plant and equipment 23,812,727 18,568,632
Less accumulated depreciation 5,208,818 4,526,005
------------- --------------
Net property, plant and equipment 18,603,909 14,042,627
Deferred tax assets 747,104 795,229
Other assets 9,498,643 6,379,332
------------- --------------
$ 30,867,323 $ 23,420,978
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ - $ -
Accounts payable 1,956,855 1,454,794
Accrued sales and liquor taxes 334,236 293,743
Accrued payroll and taxes 1,096,433 803,256
Accrued expenses 491,123 699,437
------------- --------------
Total current liabilities 3,878,647 3,251,230
------------- --------------
Long-term debt, net of current portion 8,070,000 2,870,000
Other liabilities 358,070 234,864
Deferred gain 3,315,965 3,505,674
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized - -
Capital stock, $0.01 par value, 20,000,000 shares
authorized, 4,732,705 shares issued 47,327 47,327
Additional paid-in capital 20,537,076 20,537,076
Retained earnings 6,010,238 4,324,807
Treasury stock, cost of 1,135,000 shares (11,350,000) (11,350,000)
------------- --------------
Total stockholders' equity 15,244,641 13,559,210
------------- --------------
$ 30,867,323 $ 23,420,978
============= ==============
</TABLE>
2
<PAGE> 3
Mexican Restaurants, Inc.
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
13-Week 13-Week 39-Week 39-Week
Period Ended Period Ended Period Ended Period Ended
10/03/99 09/27/98 10/03/99 09/27/98
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Restaurant sales $ 15,408,110 $ 11,561,378 $ 41,468,895 $ 34,758,437
Franchise fees and royalties 343,592 262,585 965,521 782,576
Other 31,041 12,669 149,652 29,610
-------------- -------------- -------------- -------------
15,782,743 11,836,632 42,584,068 35,570,623
-------------- -------------- -------------- -------------
Costs and expenses:
Cost of sales 4,406,606 3,188,867 11,656,877 9,464,030
Labor 5,174,144 3,787,316 13,986,950 11,568,666
Restaurant operating expenses 3,468,365 2,670,493 9,175,114 7,526,042
General and administrative 1,199,055 1,016,160 3,710,933 3,117,399
Depreciation and amortization 443,538 303,735 1,125,301 987,362
Pre-open costs 107,571 102,401 244,772 231,312
-------------- -------------- -------------- -------------
14,799,279 11,068,972 39,899,947 32,894,812
Infrequently occuring income (expense) items, net - - 295,289 -
-------------- -------------- -------------- -------------
Operating income 983,464 767,660 2,979,410 2,675,811
-------------- -------------- -------------- -------------
Other income (expense):
Interest income 3,121 9,826 14,580 21,593
Interest expense (128,529) 12,172 (334,656) (417,753)
Other, net 7,800 31,878 79,416 83,755
-------------- -------------- -------------- -------------
(117,608) 53,876 (240,660) (312,405)
-------------- -------------- -------------- -------------
Income before income tax expense and extraordinary item 865,856 821,536 2,738,750 2,363,406
Income tax expense 333,355 316,291 1,053,319 918,429
-------------- -------------- -------------- -------------
Income before extraordinary item 532,501 505,245 1,685,431 1,444,977
Extraordinary item - - - 39,975
-------------- -------------- -------------- -------------
Net income $ 532,501 $ 505,245 $ 1,685,431 $ 1,484,952
============== ============== ============== =============
Basic and diluted income per share
(before extraordinary item) $ 0.15 $ 0.14 $ 0.47 $ 0.40
-------------- -------------- -------------- -------------
Basic and diluted income per share (extraordinary item) $ - $ - $ - $ 0.01
-------------- -------------- -------------- -------------
Basic and diluted income per share $ 0.15 $ 0.14 $ 0.47 $ 0.41
-------------- -------------- -------------- -------------
Weighted average number of shares (diluted) 3,609,293 3,604,827 3,602,213 3,604,777
============== ============== ============== =============
</TABLE>
3
<PAGE> 4
Mexican Restaurants, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
39-Week Periods Ended
10/3/99 9/27/98
-------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,685,431 $ 1,484,952
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,125,301 1,218,675
Deferred gain amortization (189,709) (59,185)
Deferred tax provision - (1,366,507)
Gain on early extinguishment of debt - (39,975)
Gain on sale of fixed assets (519,685) (7,188)
Asset impairments 142,396
Changes in assets and liabilities, net of effects of acquisition:
Royalties receivable (22,356) 35,986
Receivable from affiliates - 13,000
Other receivables (277,067) (236,121)
Income tax receivable/payable 540,679 1,623,772
Inventory (213,146) 1,168
Prepaids and other current assets (125,800) (34,460)
Accounts payable 502,061 83,201
Accrued expenses and other liabilities 248,561 (704,961)
Other assets (137,835) 5,777
-------------- ----------------
Total adjustments 1,073,400 533,182
-------------- ----------------
Net cash provided by operating activities 2,758,831 2,018,134
-------------- ----------------
Cash flows from investing activities:
Payment for purchase of acquisition, net of cash acquired (4,209,846) -
Purchase of property, plant and equipment (5,209,372) (4,448,230)
Proceeds from sale of property, plant and equipment 1,186,609 11,360,632
-------------- ----------------
Net cash used in investing activities (8,232,609) 6,912,402
-------------- ----------------
Cash flows from financing activities:
Net borrowings under line of credit agreement 5,200,000 1,297,153
Payments of notes payable 0 (10,569,024)
-------------- ----------------
Net cash used in financing activities 5,200,000 (9,271,871)
-------------- ----------------
Decrease in cash and cash equivalents (273,778) (341,335)
Cash and cash equivalents at beginning of period 462,847 986,024
-------------- ----------------
Cash and cash equivalents at end of period $ 189,069 $ 644,689
============== ================
Supplemental disclosure of cash flow information:
Cash paid during the period:
Interest $ 345,655 $ 645,777
Income taxes $ 679,463 $ 528,636
Non-cash activities:
Exchange of note for equipment and inventory $ - $ 207,800
</TABLE>
4
<PAGE> 5
MEXICAN RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of Mexican 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 October 3, 1999, and the
consolidated statements of income and cash flows for the 39-week and
13-week periods ended October 3, 1999 and September 27, 1998. The
consolidated statements of income for the 39-week and 13-week
periods ended October 3, 1999 are not necessarily indicative of the
results to be expected for the full year.
2. ACCOUNTING POLICIES
During the interim periods the Company follows the
accounting policies set forth in its consolidated 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.
The Company does not have or participate in transactions
involving derivative, financial and commodity instruments.
3. EXTINGUISHMENT OF DEBT
In fiscal 1997, the Company acquired the assets of one of
its franchise locations for a $750,000 note payable to the prior
franchisee. During the first quarter of 1998, the Company accepted
an offer from the prior franchisee to prepay the remaining $450,000
balance of the note for a discounted sum of $385,000, resulting in a
gain, net of taxes, of $39,975.
4. SALE-LEASEBACK TRANSACTION
On June 25, 1998, the Company completed a sale and
leaseback transaction involving the sale and lease back of the land,
building and improvements of 13 Company-owned restaurants. The
properties were sold for $11.5 million and resulted in a gain of
approximately $3.5 million that will be deferred and amortized over
the terms of the leases, which are 15 years each. The leases are
classified as operating leases.
Future minimum lease payments under the non-cancelable
operating lease are:
1999........................$ 273,125
2000........................$ 1,114,350
2001........................$ 1,136,200
2002........................$ 1,158,924
2003........................$ 1,181,648
Thereafter..................$12,465,557
-----------
$17,329,804
===========
5. ACQUISITION OF LA SENORITA RESTAURANTS
On April 30, 1999, the Company closed on its acquisition
of La Senorita Restaurants. The Company acquired the operations of
five company-owned restaurants, a general partnership interest in a
sixth restaurant, and the rights to the La Senorita franchise
system. The purchase price was approximately $4.0 million in cash
financed with Bank of America (formerly NationsBank).
5
<PAGE> 6
The table below presents pro forma income statement
information as if the Company had purchased La Senorita at the
beginning of the fiscal year. Pro forma adjustments are to remove
compensation that is non-continuing, amortize the resulting goodwill
over 20 years, reflect net interest expense on the debt resulting
from the acquisition and record additional income tax at an
effective rate of 38.5% on the combined income of the Company and La
Senorita. This acquisition was accounted for as a purchase.
39-WEEKS 39-WEEKS
ENDED ENDED
10/03/99 9/27/98
Revenues............................$44,947,471 $41,702,507
Net Income..........................$ 1,750,982 $ 1,774,581
Diluted income per share............$ 0.49 $ 0.49
The pro forma information does not purport to be
indicative of results of operations which would have occurred had
the acquisition been consummated on the date indicated or future
results of operations.
Allocation of purchase price for La Senorita is as
follows:
Working Capital.....................................$ 149,902
Furniture, Fixtures & Equipment.....................$ 1,209,214
Goodwill............................................$ 2,640,328
Other...............................................$ 210,402
------------
$ 4,209,846
6 INFREQUENT ITEMS
The 39week period ended October 3, 1999 includes
infrequently occurring income and expenses consisting of three items
that increase operating income in the aggregate by $295,289. First,
the Company sold one restaurant to the State of Texas (by eminent
domain) for $1,150,000, resulting in a gain of $519,685. Second, the
Company recorded an impairment provision in the amount of $142,396
relating to the impairment of assets at closed restaurants. Third,
as part of the Company's decision to consolidate with a single
outsourcing firm its accounting process, the Company settled one of
its old outsourcing accounting contract for $82,000.
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
January 3, 1999, that attempt to advise interested parties of the
risks and factors that may affect the Company's business.
6
<PAGE> 7
RESULTS OF OPERATIONS
Revenues. The Company's revenues for the third quarter of
fiscal 1999 were up $3.9 million or 33.3% to $15.8 million compared
with the same quarter a year ago. Restaurant sales for the third
quarter of 1999 were up $3.8 million compared with the same quarter
a year ago, to $15.4 million. La Senorita, which was acquired on
April 30, 1999, contributed $2.2 million in restaurant sales in the
third quarter of fiscal 1999. Six new restaurants were opened, one
restaurant was acquired from a franchisee and two restaurants were
closed (leases expired) since the end of the third quarter of fiscal
1998. Total system sales at restaurants operating in both fiscal
quarters (same-stores) decreased 1.2% over last year's same quarter.
Company-owned same-store sales for the quarter decreased 2.5%.
Franchise-owned same-stores sales for the quarter increased 0.4%.
Due to the Company's focus on its development of higher volume
Tortuga Coastal Cantina and La Senorita restaurants, company-owned
average weekly unit sales increased 9.3%.
On a year-to-date basis, the Company's revenues were up
$7.0 million or 19.7% to $42.6 million compared with the same
quarter a year ago. Year-to-date restaurant sales were up $6.7
million compared with the same period a year ago, to $41.5 million.
Year-to-date total system same-store sales decreased 0.4%.
Company-owned same-store sales for the year-to-date period decreased
2.7%. Franchise-owned same-store sales for the year-to-date period
increased 2.2%.
Year-to-date company-owned average weekly unit sales increased 5.5%.
Costs and Expenses. Cost of sales, consisting primarily of
food and beverage costs, but also includes paper and supplies,
increased as a percentage of restaurant sales in the third quarter
of 1999 to 28.6% as compared with 27.6% in the same quarter in 1998.
The increase was primarily due to higher costs of sales associated
with new store development, the acquisition of La Senorita and the
non core stores located in Idaho (3) and Tennessee (1). Moreover,
cheese and produce costs were higher in the third quarter of 1999
compared with the same quarter in 1998.
On a year-to-date basis, cost of sales increased to 28.1%
of restaurant sales compared with 27.2% in the same period a year
ago. The increase was primarily due to the same factors discussed
above.
Labor and other related expenses increased as a percentage
of restaurant sales by 80 basis points to 33.6% in the third quarter
of 1999 as compared with 32.8% in the same quarter in 1998. Again,
the increase was primarily due to higher labor associated with new
store development, the acquisition of La Senorita and the non core
stores located in Idaho (3) and Tennessee (1).
On a year-to-date basis, labor and other related expenses
increased 40 basis points to 33.7% as compared with 33.3% in the
same period a year ago. The increase was primarily due to the same
factors discussed above.
Restaurant operating expenses, which primarily includes
rent, property taxes, utilities, repair and maintenance and
advertising, decreased as a percentage of restaurant sales by 60 basis
points to 22.5% in the third quarter of 1999 as compared with 23.1% in
the same quarter in 1998. The decrease was primarily due to
advertising, couponing and utilities, offset by higher property taxes.
On a year-to-date basis, restaurant operating expenses
increased 40 basis points to 22.1% as compared with 21.7% in the same
period a year ago. The increase was primarily due to last year's $11.5
million sale and leaseback transaction (closed on June 30, 1998) which
increased rent expense. Improvements in other restaurant operating
expenses, however, mitigated the increase in rent expense. The
increase in rent expense was partially offset by a reduction in
interest and depreciation expense.
General and administrative expenses decreased as a
percentage of total revenues by 100 basis points to 7.6% in the
third quarter of 1999 as compared with 8.6% in the same quarter in
1998. The decrease was primarily due to an adjustment to bonuses
accrued in the earlier quarters. The prior year's third quarter
included a $60,000 one time recovery of previously taken special
charges. Without the
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<PAGE> 8
bonus and special charges adjustments, general and administrative
expenses as a percentage of total revenue would have been 8.5% for
the third quarter 1999 and 9.1% for the third quarter 1998.
On a year-to-date basis, general and administrative
expenses decreased as a percentage of total revenues by 10 basis
points to 8.7% compared with 8.8% in the same period a year ago.
Depreciation and amortization expense increased as a
percentage of total revenues by 30 basis points to 2.8% in the third
quarter of 1999 as compared with 2.5% in the same quarter in 1998.
On a year-to-date basis, depreciation and amortization
decreased as a percentage of total revenue by 20 basis points to
2.6% compared with 2.8% in the same period a year ago. This decrease
results primarily from the sale and leaseback transaction involving
the sale and lease back of land, building and improvements of 13
Company-owned restaurants. The leases are classified as operating
leases.
Pre-open costs decreased as a percentage of total revenue
by 20 basis points to 0.7% in the third quarter of 1999 compared
with 0.9% in the same quarter in 1998.
On a year-to-date basis, pre-open costs remained constant
at 0.6% compared with the same period a year ago.
On a year-to-date basis, infrequently occurring (income)
and expense consist of three items that increase operating income in
the aggregate by $295,289. The Company sold one restaurant to the
State of Texas (by eminent domain) for $1,150,000, resulting in a
gain of $519,685. The Company recorded an impairment provision in
the amount of $142,396 relating to the impairment of assets at
closed restaurants. As part of the Company's decision to consolidate
with a single outsourcing firm its accounting process, the Company
settled its old outsourcing accounting contract for $82,000.
Other Income (Expense). Net other income (expense)
decreased from income to an expense on a comparable basis with the
third quarter a year ago. The change from income to expense was
primarily due to last year's $11.5 million sale and leaseback
transaction, the proceeds of which were used to pay off long-term
debt, thus reducing interest expense. Since the third quarter of
1998, new interest expense has been incurred due to new restaurant
development and the acquisition of La Senorita.
On a year-to-date basis, net other expense decreased as a
percentage of total revenues by 30 basis points to 0.6% in the third
quarter of 1999 compared with 0.9% in the same quarter a year ago.
The decrease was primarily due to the same factors discussed above.
Income Tax Expense. The Company's effective tax rate for
the third quarter 1999 was 38.5%, comparable with the same quarter
a year ago.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $2.8 million
for the 39 week period ended October 3, 1999, compared to $2.0
million for the same period last year. As of October 3, 1999, the
Company had a working capital deficit of $1.9 million, which is
common in the restaurant industry, since restaurant companies do not
typically require a significant investment in either accounts
receivable or inventory.
During the first 39 weeks of 1999, capital expenditures on
property, plant and equipment were approximately $5.2 million as
compared to $4.5 million for the same period in 1998. Capital
expenditures included the remodeling of seven restaurants. No
additional remodels are planned for the remainder of the fiscal
year. One previously closed restaurant was reopened after a concept
conversion (from a Casa Ole to a Monterey's Little Mexico) and
another concept conversion is under construction and will reopen in
the first quarter of fiscal year 2000. Four new restaurants opened
during the 39 week period of 1999. Just after the third quarter
ended, a fifth new restaurant was opened. No new
8
<PAGE> 9
restaurants are currently under construction, but the Company has
secured the sites for two new restaurants and is currently under
negotiations on another site. Additionally, the Company had cash
outlays for necessary replacement of equipment and leasehold
improvements in various older units. The Company estimates its
capital expenditures for the remainder of the fiscal year will be
approximately $1.5 million.
On April 30, 1999, the Company closed on its acquisition
of La Senorita Restaurants. The Company paid approximately $4.2
million, including closing costs. The Company acquired the
operations of five company-owned restaurants, a general partnership
interest in a sixth restaurant, and the rights to the La Senorita
franchise system.
The Company increased its revolving credit facility with
Bank of America (formerly NationsBank) from $9.0 million to $10.0
million. The interest rate is either the prime rate or LIBOR plus a
stipulated percentage. Accordingly, the Company is impacted by
changes in the prime rate and LIBOR. The Company is subject to a
non-use fee of 0.35% on the unused portion of the revolver from the
date of the credit agreement. Within the terms of the credit
agreement, the Company must meet certain financial covenants.
Approximately $4.0 million of the revolver was used on April 30,
1999 for the acquisition of La Senorita Restaurants. The Company
currently has $1.9 million available under the revolver.
The Company also has a $14.5 million forward commitment
agreement with Franchise Finance Corporation of America ("FFCA"). At
October 3, 1999, the Company had approximately $12.2 million
available under the FFCA forward commitments.
The Company's management believes that the sale-leaseback
forward commitments with FFCA, along with operating cash flow and
the Company's revolving line of credit with Bank of America, will be
sufficient to meet its operating requirements and to finance its
expansion plans (exclusive of any acquisitions other than La
Senorita) through the end of the 2000 fiscal year.
Year 2000. In 1998, the Company reached a decision to
continue outsourcing its accounting processes. The new outsourcing
group has set up an accounting department on the premises of the
Company and has installed new computer hardware and software that is
Year 2000 adapted. Further, the Company is in the process of
updating its information and other systems to insure they are Year
2000 compliant. The Company also has initiated discussions with its
significant suppliers and financial institutions to ensure that
those parties have appropriate plans to remediate Year 2000 issues
where their systems interface with the Company's systems or
otherwise impact its operations. The Company is assessing the extent
to which its operations are vulnerable should those organizations
fail to remediate their computer systems properly. Although
management believes that the Company's systems will be compliant on
or before December 31, 1999, the most likely "worst case" scenario
would be that the Company may not be able to process credit card
transactions and/or experience delays in food and supply orders. In
the interim, there are other manual procedures the Company could
utilize in the event of a "worst case" scenario. All maintenance and
modification costs are expensed as incurred, while the cost of new
computer hardware and software, if material, is being capitalized
and depreciated over its expected useful life. The cost of the Year
2000 compliance program is not anticipated to be greater than
$50,000 or to have a material adverse effect on its financial
position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not have or participate in transactions
involving derivative, financial and commodity instruments. The
Company's long-term debt bears interest at floating market rates.
Based on amount outstanding at October 3, 1999, a 1% change in
interest rates would change interest expense by $40,150.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit
Number Document Description
------ --------------------
27.1 Financial Data Schedule
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.
MEXICAN RESTAURANTS, INC.
Dated: November 15, 1999 By: /s/ LOUIS P. NEEB
Louis P. Neeb -------------------------
Chairman of the Board
& Chief Executive Officer
(Principal Executive Officer)
Dated: November 15, 1999 By: /s/ ANDREW J. DENNARD
Andrew J. Dennard -------------------------
Vice President, Chief Financial Officer & Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
11
<PAGE> 12
EXHIBIT INDEX
Exhibit
Number Document Description
------ --------------------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-02-2000
<PERIOD-START> JUL-05-1999
<PERIOD-END> OCT-03-1999
<CASH> 189,069
<SECURITIES> 0
<RECEIVABLES> 680,469
<ALLOWANCES> (30,000)
<INVENTORY> 672,406
<CURRENT-ASSETS> 2,017,667
<PP&E> 23,812,727
<DEPRECIATION> 5,208,818
<TOTAL-ASSETS> 30,867,323
<CURRENT-LIABILITIES> 3,878,647
<BONDS> 0
0
0
<COMMON> 47,327
<OTHER-SE> 15,197,314
<TOTAL-LIABILITY-AND-EQUITY> 30,867,323
<SALES> 15,408,110
<TOTAL-REVENUES> 15,782,743
<CGS> 4,406,606
<TOTAL-COSTS> 10,392,673
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 128,529
<INCOME-PRETAX> 865,856
<INCOME-TAX> 333,355
<INCOME-CONTINUING> 532,501
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 532,501
<EPS-BASIC> .15
<EPS-DILUTED> .15
</TABLE>
