<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-Q
(Mark
One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(b)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(b) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
Commission file number 333-04261
AmeriKing, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
2215 Enterprise Drive, Suite 1502
Westchester, Illinois
(Address of principal executive offices)
36-3970707
(I.R.S. employer
identification no.)
60154
(Zip code)
Registrant's telephone number, including area code 708-947-2150
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(b) 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
The number of shares outstanding of each of the registrant's classes of
common stock as of October 28, 1999 was 902,992 of common stock, $.01 par
value per Share (the "Common Stock").
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<C> <S> <C>
PART I
Item 1. Financial Statements........................................ 2
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 10
PART II
Item 6. Exhibits, and Reports on Form 8-K........................... 15
</TABLE>
<PAGE>
PART I
Certain statements in this Form 10-Q may constitute "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 AmeriKing, Inc. ("AmeriKing" or 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: general economic and business
conditions; competition; success of operating initiatives; development and
operating costs; advertising and promotional efforts; brand awareness; adverse
publicity; acceptance of new product offerings; availability, locations, and
terms of sites for store development; changes in business strategy or
development plans; quality of management; availability, terms, and deployment
of capital; business abilities and judgment of personnel; availability of
qualified personnel; food, labor, and employee benefit costs; changes in, or
the failure to comply with, governmental regulations; regional weather
conditions; construction schedules; and other factors referenced in this Form
10-Q.
<PAGE>
Item 1. Financial Statements and Supplementary Data
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AMERIKING, INC. AND
SUBSIDIARY
<TABLE>
<CAPTION>
Page
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<S> <C>
Consolidated Balance Sheets as of September 27, 1999 and December 28,
1998..................................................................... 3
Consolidated Statements of Operations for the quarters ended September 27,
1999 and
September 28, 1998....................................................... 4
Consolidated Statements of Operations for the three quarters ended
September 27, 1999 and
September 28, 1998....................................................... 5
Consolidated Statements of Stockholders' Equity (Deficit) for the three
quarters ended
September 27, 1999 and the fiscal years ended December 28, 1998 and
December 29, 1997........................................................ 6
Consolidated Statements of Cash Flows for the three quarters ended
September 27, 1999 and
September 28, 1998....................................................... 7
Notes to Consolidated Financial Statements................................ 8
</TABLE>
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
September 27, 1999 and December 28, 1998
<TABLE>
<CAPTION>
September
27, 1999 December 28,
ASSETS (unaudited) 1998
------ ------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents......................... $ 13,251,000 $ 10,591,000
Accounts receivable............................... 2,270,000 2,512,000
Inventories....................................... 3,236,000 2,546,000
Prepaid expenses.................................. 820,000 465,000
Current portion of deferred income taxes.......... 123,000 123,000
------------ ------------
Total current assets............................ 19,700,000 16,237,000
Property and equipment.............................. 77,140,000 62,974,000
Goodwill............................................ 172,669,000 145,327,000
Deferred income taxes............................... 1,448,000 1,448,000
Other assets:
Deferred financing costs.......................... 5,712,000 6,597,000
Deferred organization costs....................... -- 2,000
Franchise agreements.............................. 7,545,000 6,134,000
------------ ------------
Total other assets.............................. 13,257,000 12,733,000
------------ ------------
Total............................................... $284,214,000 $238,719,000
============ ============
<CAPTION>
LIABILITIES, SENIOR PREFERRED STOCK
AND STOCKHOLDERS' EQUITY (DEFICIT)
-----------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable and other accrued expenses....... $ 18,330,000 $ 15,931,000
Accrued payroll and related expenses.............. 5,720,000 8,459,000
Accrued taxes payable............................. 5,713,000 3,998,000
Note payable...................................... 500,000 2,657,000
Current portion of long-term debt................. 809,000 753,000
------------ ------------
Total current liabilities....................... 31,072,000 31,798,000
Long-term debt--Less current portion................ 220,465,000 175,836,000
Other long-term liabilities......................... 1,712,000 808,000
------------ ------------
Total liabilities............................... 253,249,000 208,442,000
Commitments and coningencies:
Senior preferred stock.............................. 43,020,000 39,093,000
Stockholders' equity (deficit):
Preferred stock................................... 75 75
Common stock...................................... 9,030 9,030
Accumulated deficit............................... (12,064,105) (8,825,105)
------------ ------------
Total stockholders' equity (deficit)............ (12,055,000) (8,816,000)
------------ ------------
Total............................................... $284,214,000 $238,719,000
============ ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Quarters Ended September 27, 1999 and September 28, 1998
(unaudited)
<TABLE>
<CAPTION>
June 28, June 29,
1999 to 1998 to
September 27, % of September 28, % of
1999 Sales 1998 Sales
------------- ----- ------------- -----
<S> <C> <C> <C> <C>
Sales:
Restaurant food sales.............. $ 99,625,000 96.7% $75,262,000 97.1%
Non-food sales..................... 3,444,000 3.3 2,214,000 2.9
------------ ----- ----------- -----
Total sales...................... 103,069,000 100.0 77,476,000 100.0
Restaurant operating expenses:
Cost of food sales................. 29,469,000 28.6 22,256,000 28.7
Cost of non-food sales............. 3,193,000 3.1 1,713,000 2.2
Restaurant labor and related costs. 26,699,000 25.9 19,875,000 25.7
Occupancy.......................... 10,024,000 9.7 7,885,000 10.2
Depreciation and amortization of
goodwill and Franchise agreements. 4,120,000 4.0 2,889,000 3.7
Advertising........................ 5,855,000 5.7 3,951,000 5.1
Royalties.......................... 3,487,000 3.4 2,634,000 3.4
Other restaurant operating
expenses.......................... 8,977,000 8.7 5,940,000 7.7
------------ ----- ----------- -----
Total restaurant operating
expenses........................ 91,824,000 89.1 67,143,000 86.7
General and administrative expenses.. 4,132,000 4.0 3,180,000 4.1
Other operating expenses:
Depreciation expense--office....... 280,000 0.3 223,000 0.3
Provision for disposal of long
lived assets...................... -- 0.0 1,178,000 1.5
Loss on disposal of fixed assets... 6,000 0.0 309,000 0.4
Management and directors' fees..... 162,000 0.1 163,000 0.2
------------ ----- ----------- -----
Total other operating expenses... 448,000 0.4 1,873,000 2.4
------------ ----- ----------- -----
Operating income..................... 6,665,000 6.5 5,280,000 6.8
Other income (expense):
Interest expense................... (5,213,000) (5.1) (4,085,000) (5.3)
Amortization of deferred costs..... (235,000) (0.2) (283,000) (0.4)
Other income (expense)--net ....... (243,000) (0.2) (165,000) (0.2)
------------ ----- ----------- -----
Total other expense.............. (5,691,000) (5.5) (4,533,000) (5.8)
------------ ----- ----------- -----
Income before income tax expense..... 974,000 1.0 747,000 1.0
Income tax expense................... 390,000 0.4 224,000 0.3
------------ ----- ----------- -----
Net income........................... 584,000 0.6% 523,000 0.7%
Preferred stock dividends
(cumulative, undeclared)............ (147,000) (113,000)
Senior preferred stock dividends..... (1,352,000) (1,193,000)
Amortization of senior preferred
stock issuance costs................ (30,000) (30,000)
------------ -----------
Loss available to common
stockholders........................ $ (945,000) $ (813,000)
------------ -----------
Weighted average number of shares
outstanding--basic and diluted...... 902,992 902,992
------------ -----------
Net income (loss) per common share--
basic and diluted................... $ (1.05) $ (0.90)
============ ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Quarters Ended September 27, 1999 and September 28, 1998
(unaudited)
<TABLE>
<CAPTION>
December 29, December 30,
1998 to 1997 to
September 27, % of September 28, % of
1999 Sales 1998 Sales
------------- ----- ------------- -----
<S> <C> <C> <C> <C>
Sales:
Restaurant food sales.............. $278,846,000 97.1% $220,843,000 97.1%
Non-food sales..................... 8,282,000 2.9 6,529,000 2.9
------------ ----- ------------ -----
Total sales...................... 287,128,000 100.0 227,372,000 100.0
Restaurant operating expenses:
Cost of food sales................. 83,795,000 29.2 65,705,000 28.9
Cost of non-food sales............. 7,090,000 2.5 5,356,000 2.4
Restaurant labor and related costs. 75,326,000 26.2 58,467,000 25.7
Occupancy.......................... 29,196,000 10.2 23,280,000 10.2
Depreciation and amortization of
goodwill and Franchise agreements. 11,426,000 4.0 8,521,000 3.7
Advertising........................ 15,270,000 5.3 11,667,000 5.1
Royalties.......................... 9,760,000 3.4 7,729,000 3.4
Other restaurant operating
expenses.......................... 24,117,000 8.4 18,692,000 8.2
------------ ----- ------------ -----
Total restaurant operating
expenses........................ 255,980,000 89.1 199,417,000 87.7
General and administrative expenses.. 12,032,000 4.2 9,437,000 4.2
Other operating expenses:
Depreciation expense--office....... 802,000 0.3 603,000 0.3
Provision for disposal of long
lived assets...................... -- 0.0 1,178,000 0.5
Loss on disposal of fixed assets... 220,000 0.1 469,000 0.2
Management and directors' fees..... 500,000 0.2 513,000 0.2
------------ ----- ------------ -----
Total other operating expenses... 1,522,000 0.6 2,763,000 1.2
------------ ----- ------------ -----
Operating income..................... 17,594,000 6.1 15,755,000 6.9
Other income (expense):
Interest expense................... (15,187,000) (5.3) (12,116,000) (5.3)
Amortization of deferred costs..... (681,000) (0.2) (688,000) (0.3)
Other income (expense)--net........ (429,000) (0.2) (428,000) (0.2)
------------ ----- ------------ -----
Total other expense.............. (16,297,000) (5.7) (13,232,000) (5.8)
------------ ----- ------------ -----
Income before income tax expense..... 1,297,000 0.4 2,523,000 1.1
Income tax expense................... 519,000 0.2 757,000 0.3
------------ ----- ------------ -----
Net income........................... 778,000 0.2% 1,766,000 0.8%
Preferred stock dividends
(cumulative, undeclared)............ (435,000) (338,000)
Senior preferred stock dividends..... (3,927,000) (3,455,000)
Amortization of senior preferred
stock issuance costs................ (90,000) (90,000)
------------ ------------
Loss available to common
stockholders........................ $ (3,674,000) $ (2,117,000)
------------ ------------
Weighted average number of shares
outstanding--basic and diluted...... 902,992 902,992
------------ ------------
Net loss per common share--basic and
diluted............................. $ (4.07) $ (2.34)
============ ============
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Three Quarters Ended September 27, 1999 and the Fiscal Years Ended
December 28, 1998 and December 29, 1997
<TABLE>
<CAPTION>
Additional Retained
Preferred Common Paid-In Earnings
Stock Stock Capital (Deficit) Total
--------- ------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE--December 30,
1996................... $75 $8,933 $7,277,992 $ (6,854,000) $ 433,000
Dividends on senior
preferred stock...... (4,112,000) (4,112,000)
Amortization of senior
preferred stock
issuance costs....... (129,000) (129,000)
Recapitalization of
common stock......... 97 903 1,000
Net loss.............. (2,034,000) (2,034,000)
--- ------ ---------- ------------ ------------
BALANCE--December 29,
1997................... 75 9,030 3,037,895 (8,888,000) (5,841,000)
Dividends on senior
preferred stock...... (2,927,895) (1,750,105) (4,678,000)
Amortization of senior
preferred stock
issuance costs....... (110,000) (110,000)
Exercise of stock
options..............
Net Income............ 1,813,000 1,813,000
--- ------ ---------- ------------ ------------
BALANCE--December 28,
1998................... 75 9,030 -- (8,825,105) (8,816,000)
Dividends on senior
preferred stock...... (3,927,000) (3,927,000)
Amortization of senior
preferred stock
issuance costs ...... (90,000) (90,000)
Net Income............ 778,000 778,000
--- ------ ---------- ------------ ------------
BALANCE--September 27,
1999................... $75 $9,030 $ -- $(12,064,105) $(12,055,000)
=== ====== ========== ============ ============
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Quarters Ended September 27, 1999 and September 28, 1998
(unaudited)
<TABLE>
<CAPTION>
December December
29, 30,
1998 to 1997 to
September September
27, 28,
1999 1998
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net Income........................................... $ 778,000 $ 1,766,000
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation and amortization...................... 12,909,000 9,812,000
Loss on disposal of fixed assets................... 220,000 469,000
Provision for disposition of fixed assets.......... -- 1,178,000
Changes in:
Accounts receivable.............................. 242,000 850,000
Inventories...................................... (690,000) 323,000
Prepaid expenses................................. (355,000) 1,137,000
Accounts payable, accrued and other long-term
liabilities..................................... 2,279,000 3,842,000
----------- -----------
Net cash flows from operating activities....... 15,383,000 19,377,000
Cash flows from investing activities:
Purchase of restaurant franchise agreements,
equipment and goodwill............................ (46,220,000) (5,952,000)
Cash paid for franchise agreements................. (561,000) (240,000)
Cash paid for property and equipment............... (8,470,000) (6,115,000)
----------- -----------
Net cash flows used for investing activities... (55,251,000) (12,307,000)
Cash flows from financing activities:
Advances under line of credit...................... 45,280,000 1,500,000
Cash paid for financing costs...................... -- (127,000)
Payment on line of credit.......................... -- (3,000,000)
Payments on short-term debt........................ (2,157,000) --
Payments on long-term debt and capital leases...... (595,000) (501,000)
----------- -----------
Net cash flows from financing activities....... 42,528,000 (2,128,000)
----------- -----------
Net change in cash and cash equivalents.............. 2,660,000 4,942,000
Cash and cash equivalents--Beginning of year......... 10,591,000 7,532,000
----------- -----------
Cash and cash equivalents--End of quarter............ $13,251,000 $12,474,000
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the three quarters for interest... $11,520,000 $ 9,397,000
=========== ===========
Cash paid during the three quarters for income
taxes............................................. $ 85,000 $ 81,000
=========== ===========
Supplemental disclosure of noncash investing and
financing activities:
Senior preferred stock dividends................... $ 3,927,000 $ 3,455,000
Amortization of senior preferred stock issuance
costs............................................. 90,000 90,000
----------- -----------
Total.......................................... $ 4,017,000 $ 3,545,000
=========== ===========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
AMERIKING, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation and Summary of Significant Accounting Policies
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all of the adjustments necessary (consisting of
normal and recurring accruals) to present fairly the Company's financial
position as of September 27, 1999 and December 28, 1998, the results of
operations for the three quarters ended September 27, 1999 and September 28,
1998 and cash flows for the three quarters ended September 27, 1999 and
September 28, 1998. These financial statements should be read in conjunction
with the Company's annual report on Form 10-K for the fiscal year ended
December 28, 1998 filed on March 24, 1999.
The results of operations for the quarter and three quarters ended September
27, 1999 and September 28, 1998 are not necessarily indicative of the results
to be expected for the full fiscal year.
Inventories--Inventories consist primarily of restaurant food and supplies
and are stated at the lower of cost or market. Cost is determined using the
first-in, first-out (FIFO) method.
Net Income (Loss) Per Common Share--In calculating net income (loss) per
share, income available to common stockholders is the same for both the basic
and diluted calculations. For the quarter and three quarters ended September
27, 1999 and September 28, 1998 diluted earnings per share was the same as
basic earnings per share due to the antidilutive effect of the stock options
and warrants in the respective quarters.
Start Up Costs--Effective at the beginning of fiscal 1998, the Company
adopted AICPA Statement of Position No. 98-5 "Start-up Activities" (SOP 98-5).
SOP 98-5 requires companies to expense, as incurred, costs associated with
start-up activities. Previously, the Company amortized such costs over a
twelve month period when a restaurant was brought into service. The effect of
such adoption was to charge to expense $299,000 of such costs in the first
quarter of fiscal 1998.
Reclassifications--Certain information in the consolidated financial
statements for the quarter and three quarters ended September 28, 1998 have
been reclassified to conform to the current reporting format.
New Accounting Standards--In June 1998, the FASB issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. The Statement will require the Company to recognize all
derivatives as either assets or liabilities in the balance sheet and measure
those derivative instruments at fair value. This Statement will be effective
for the Company in the first quarter of 2001. At September 27, 1999, the
Company has no derivative instruments or hedging activities.
Computer Software--Effective at the beginning of fiscal 1999, the Company
adopted AICPA Statement of Position No. 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use" (SOP 98-1). SOP 98-1
provides guidance on accounting for the costs of computer software developed
or obtained for internal use. The guidance provided by SOP 98-1 is similar to
the accounting practices of the Company prior to its adoption and is not
expected to result in materially different capitalized amounts.
8
<PAGE>
2. Acquisitions
On June 9, 1999, the Company purchased one restaurant in Georgia for
approximately $.6 million including transaction fees and acquisition related
expenditures.
On April 30, 1999, the Company purchased nine restaurants in Illinois for
approximately $6.0 million including transaction fees and acquisition related
expenditures.
On April 13, 1999, the Company purchased one restaurant in Virginia for
approximately $.5 million including transaction fees and acquisition related
expenditures.
On April 7, 1999, the Company purchased three restaurants in North Carolina
for a nominal amount including transaction fees.
On February 16, 1999, the Company purchased thirty restaurants in Wisconsin
and the Upper Peninsula of Michigan for approximately $24.3 million including
transaction fees and acquisition related expenditures.
On February 1, 1999, the Company purchased two restaurants in Illinois for
approximately $1.0 million including transaction fees and acquisition related
expenditures.
On December 31, 1998, the Company purchased thirteen restaurants in Ohio for
approximately $11.1 million including transaction fees and acquisition related
expenditures.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Restaurant sales include food sales and merchandise sales. Merchandise sales
include convenience store sales at the Company's dual-use facilities (of which
the Company currently has ten), as well as sales of promotional products at
the Company's restaurants. Historically, merchandise sales have contributed
approximately 3.0% to restaurant sales. Promotional products, which account
for the majority of merchandise sales, are generally sold at or near the
Company's cost.
EBITDA represents operating income plus interest, taxes, depreciation and
amortization and other expenses. While EBITDA should not be construed as a
substitute for operating income or a better indicator of liquidity than cash
flow from operating activities, which are determined in accordance with
generally accepted accounting principles. EBITDA is included to provide
additional information with respect to the ability of the Company to meet its
future debt service, capital expenditure and working capital requirements. In
addition, management believes that certain investors find EBITDA to be a
useful tool for measuring the ability of the Company to service its debt.
EBITDA is not necessarily a measure of the Company's ability to fund its cash
needs. See the Consolidated Statements of Cash Flows of the Company and the
related notes to the Consolidated Financial Statements included herein.
The Company includes in the comparable restaurant sales analysis discussed
below only those restaurants that have been in operation for a minimum of
thirteen months. For a restaurant not operating for the entire prior annual
period, the sales for the interim period in the prior year are compared to
that for the comparable interim period in the indicated year.
Quarter ended September 27, 1999 Compared to Quarter ended September 28, 1998
Restaurant Sales. Total sales increased $25.6 million or 33.0% during the
quarter ended September 27, 1999, to $103.1 from $77.5 million during the
quarter ended September 28, 1998, due primarily to the inclusion of the 59 and
22 restaurants purchased in 1999 and 1998, respectively. In addition, the
Company developed 9 and 13 restaurants in 1999 and 1998, respectively. Newly
acquired restaurants accounted for $22.9 million of the total increase in
restaurant sales, while new restaurant development accounted for $4.6 million
of the increase in sales. Sales at the comparable restaurants, including only
those restaurants owned by the Company at September 27, 1999, decreased 2.8%
for the quarter ended September 27, 1999.
Restaurant Operating Expenses. Total restaurant operating expenses increased
$24.7 million, or 36.8% during the quarter ended September 27, 1999, to $91.8
million from $67.1 million in the quarter ended September 28, 1998. As a
percentage of sales, restaurant operating expenses increased 2.4%, to 89.1%
during the quarter ended September 27, 1999 from 86.7% in September 28, 1998.
Cost of food sales increased $7.2 million but decreased 0.1% as a percentage
of sales to 28.6% from 28.7% during the quarter ended September 27, 1999. The
increase in cost of food sales is the result of an increase in the number of
stores that have been acquired and developed since the same quarter last year.
The percentage of sales has remained relatively constant due to the stability
of commodity pricing.
Cost of non-food sales increased $1.5 million during the quarter ended
September 27, 1999, and increased 0.9% as a percentage of sales to 3.1% during
the quarter ended September 27, 1999 from 2.2% in the quarter ended September
28, 1998. The increase in cost of non-food sales is the result of an increase
in the number of stores that have been acquired and developed since the same
quarter last year. In addition, the percentage increase reflects the
popularity and increased volumes of promotional items purchased versus the
same quarter last year.
Restaurant labor and related expenses increased $6.8 million during the
quarter ended September 27, 1999, and increased 0.2% as a percentage of
restaurant sales to 25.9% during the quarter ended September 27, 1999
10
<PAGE>
from 25.7% in the quarter ended September 28, 1998. The increase in restaurant
labor and related costs was primarily due to the increased number of stores
and the additional labor associated with them. In addition, the percentage
increase is due to the effect of lower average store sales volumes on the
fixed component of salaries.
Depreciation and amortization increased $1.2 million during the quarter
ended September 27, 1999, to $4.1 million from $2.9 million in the quarter
ended September 28, 1998. As a percentage of sales, depreciation and
amortization expense increased 0.3% to 4.0% in the quarter ended September 27,
1999 from 3.7% in the quarter ended September 28, 1998. The increase was due
primarily to the increase in goodwill amortization resulting from the Company
applying the purchase method of accounting for the newly acquired restaurants.
Occupancy and other restaurant operating expenses including advertising and
royalties increased $7.9 million during the quarter ended September 27, 1999
and increased 1.2% as a percentage of sales to 27.5% in the quarter ended
September 27, 1999 from 26.3% in the quarter ended September 28, 1998. This
increase is primarily due to the inclusion of newly acquired and developed
restaurants. The prior year amount included a litigation recovery of
approximately .8%. In addition, the percentage increase is due to higher
repair and maintenance costs as well as an increase in the local marketing
contribution percentage in certain markets.
General and Administrative Expenses. General and administrative expenses
increased $0.9 million during the quarter ended September 27, 1999 and
decreased 0.1% as a percent of sales to 4.0% from 4.1% during the quarters
ended September 27, 1999 and September 28, 1998 respectively. The increase in
general and administrative expenses is due to staff increases and related
costs associated with the newly acquired and developed restaurants.
Operating Income. Operating income increased $1.4 million or 27% to $6.7
million during the quarter ended September 27, 1999 from $5.3 million for the
quarter ended September 28, 1998. As a percentage of sales, operating income
decreased .3%, to 6.5% from 6.8% for the quarters ended September 27, 1999 and
September 28, 1998, respectively. The change is primarily a result of the
factors discussed above.
EBITDA. As defined in Item 2, EBITDA increased $1.2 million or 12.0% to
$11.2 million for the quarter ended September 27, 1999 from $10.0 million for
the quarter ended September 28, 1998. As a percentage of restaurant sales,
EBITDA decreased 2.0%, to 10.9% for the quarter ended September 27, 1999 from
12.9% for the quarter ended September 28, 1998.
Three Quarters ended September 27, 1999 Compared to Three Quarters ended
September 28, 1998
Restaurant Sales. Total sales increased $58.0 million or 26.2% during the
three quarters ended September 27, 1999, to $278.8 million, from $220.8
million during the three quarters ended September 28, 1998, due primarily to
the inclusion of the 59 and 22 restaurants purchased in 1999 and 1998,
respectively. In addition, the Company closed 3 restaurants in 1998, and
developed 9 and 13 restaurants in 1999 and 1998, respectively. Newly acquired
restaurants accounted for $57.2 million of the total increase in restaurant
sales, while new restaurant development accounted for $11.4 million of the
increase in sales. Sales at the comparable restaurants, including only those
restaurants owned by the Company at September 27, 1999, decreased 5.5% for the
three quarters ended September 27, 1999.
Restaurant Operating Expenses. Total restaurant operating expenses increased
$56.6 million, or 28.4% during the three quarters ended September 27, 1999, to
$256.0 million from $199.4 million in the three quarters ended September 28,
1998. As a percentage of sales, restaurant operating expenses increased 1.4%,
to 89.1% from 87.7% during the three quarters ended September 27, 1999 and
September 28, 1998, respectively.
Cost of food sales increased $18.1 million, an increase of 0.3% as a
percentage of sales to 29.2% from 28.9% during the three quarters ended
September 27, 1999. The increase in total cost of food sales is the result of
an increase in the number of stores that have been acquired and developed
since the same quarter last year.
11
<PAGE>
The percentage increase in cost of food sales is related to the higher
discounting of food due to increased promotional activity.
Cost of non-food sales increased $1.7 million during the three quarters
ended September 27, 1999, and increased 0.1% as a percentage of sales to 2.5%
during the three quarters ended September 27, 1999 from 2.4% in the three
quarters ended September 28, 1998. The increase in cost of non-food sales is
the result of an increase in the number of stores that have been acquired and
developed since the same quarter last year.
Restaurant labor and related expenses increased $16.9 million during the
three quarters ended September 27, 1999, and increased 0.5% as a percentage of
restaurant sales to 26.2% during the three quarters ended September 27, 1999
from 25.7% in the three quarters ended September 28, 1998. The increase in
restaurant labor and related costs was primarily due to the increased number
of stores and the additional labor associated with them. In addition, the
percentage increase is due to the effect of lower average store sales volumes
on the fixed component of salaries.
Depreciation and amortization increased $2.9 million during the three
quarters ended September 27, 1999, to $11.4 million from $8.5 million in the
three quarters ended September 28, 1998. As a percentage of sales,
depreciation and amortization expense increased 0.3% to 4.0% in the three
quarters ended September 27, 1999 from 3.7% in the three quarters ended
September 28, 1998. The increase was due primarily to the increase in goodwill
amortization resulting from the Company applying the purchase method of
accounting for the newly acquired restaurants.
Occupancy and other restaurant operating expenses including advertising and
royalties increased $17.0 million to $78.3 million during the three quarters
ended September 27, 1999 and increased 0.3% as a percentage of sales to 27.3%
during the three quarters ended September 27, 1999 from 27.0% during the three
quarters ended September 28, 1998. This increase is primarily due to the
inclusion of newly acquired and developed restaurants. The percentage increase
is due to an increase in the local marketing contribution percentage in
certain markets.
General and Administrative Expenses. General and administrative expenses
increased $2.6 million during the three quarters ended September 27, 1999 and
remained constant at 4.2% as a percent of sales during the three quarters
ended September 27, 1999 and September 28, 1998 respectively. The increase in
general and administrative expenses is due to staff increases and related
costs associated with the newly acquired and developed restaurants.
Operating Income. Operating income increased $1.8 million or 11.6% to $17.6
million during the three quarters ended September 27, 1999 from $15.8 million
for the three quarters ended September 28, 1998. As a percentage of sales,
operating income decreased 0.8% to 6.1% from 6.9% for the three quarters ended
September 27, 1999 and September 28, 1998 respectively. The change is
primarily a result of the factors discussed above.
EBITDA. As defined in Item 2, EBITDA increased $3.5 million or 13.0% to
$30.5 million for the three quarters ended September 27, 1999 from $27.0
million for the three quarters ended September 28, 1998. As a percentage of
restaurant sales, EBITDA decreased 1.2%, to 10.6% for the three quarters ended
September 27, 1999 from 11.8% for the three quarters ended September 28, 1998.
Liquidity and Capital Resources
Net cash flows from operating activities decreased $4.0 million during the
three quarters ended September 27, 1999, to $15.4 million, from $19.4 million
during the three quarters ended September 28, 1998. The decrease is primarily
due to a decrease in net income, coupled with fluctuations in working capital,
exclusive of short term borrowings.
Capital spending for the three quarters ended September 27, 1999 was $55.3
million of which $46.2 million included transaction fees and related
expenditures for the acquisition of 30 restaurants in Wisconsin and
12
<PAGE>
Michigan, 13 restaurants in Ohio, 11 restaurants in Illinois, 1 restaurant in
Georgia, 3 restaurants in North Carolina, and 1 restaurant in Virginia. In
addition, the Company developed 9 new restaurants during the three quarters
ended September 27, 1999.
During the three quarters ended September 27, 1999, borrowings of $45.3
million were incurred of which included $41.1 million for the acquisition of
59 restaurants in Illinois, Ohio, Wisconsin, Michigan, Georgia, Virginia and
North Carolina. The remainder of the borrowings related to new restaurant
development, existing restaurants and corporate infrastructure additions.
The Company has budgeted approximately $400,000 for the development of each
of its new restaurants. The Company anticipates it will spend approximately an
additional $3.0 to $6.0 million annually for other capital expenditures. The
Company has committed to BKC that for the foreseeable future (i) it will make
capital expenditures on its existing restaurants equal to 1% of its gross
sales and (ii) it will spend an amount equal to 1% of its gross sales on local
advertising. The actual amount of the Company's cash requirements for capital
expenditures depends on, among other things, the number of new restaurants
opened or acquired and the costs associated with such restaurants and the
number of franchises subject to renewal and the costs associated with bringing
the related restaurants up to BKC's then current design specifications in
connection with these franchise renewals.
The Company is structured as a holding company with no independent
operations, as the Company's operations are conducted exclusively through its
wholly owned subsidiaries. The Company's only significant assets are the
capital stock of its subsidiaries. As a holding company, the Company's cash
flow, its ability to meet its debt service requirements and its ability to pay
cash dividends on the Senior Preferred Stock are dependent upon the earnings
of its subsidiaries and their ability to declare dividends or make other
intercompany transfers to the Company. Under the terms of the indenture
pursuant to which the Senior Notes were offered (the "Indenture"), the
Company's subsidiaries may incur certain indebtedness pursuant to agreements
that may restrict the ability of such subsidiaries to make such dividends or
other intercompany transfers necessary to service the Company's obligations,
including its obligations under the Senior Notes, the Senior Preferred Stock
and any 13% Subordinated Exchange Debentures due 2008 (the "Exchange
Debentures") the Company may exchange pursuant to the Indenture. The Indenture
restricts, among other things, the Company's and its Restricted Subsidiaries'
(as defined in the Indenture) ability to pay dividends or make certain other
restricted payments, including the payment of cash dividends on or the
redemption of the Senior Preferred Stock, to incur additional indebtedness, to
encumber or sell assets, to enter into transactions with affiliates, to enter
into certain guarantees of indebtedness, to make restricted investments, to
merge or consolidate with any other entity and to transfer or lease all or
substantially all of their assets. In addition, (i) the Company's Amended and
Restated Credit Agreement (as defined) with the BankBoston, N.A. and other
lenders thereto contains other and more restrictive covenants and prohibits
the Company's subsidiaries from declaring dividends or making other
intercompany transfers to the Company in certain circumstances and (ii)
agreements reached with BKC contain restrictions with respect to dividend
payments and intercompany loans.
The Company believes that available cash on hand together with its available
credit of $12.1 million under its Amended and Restated Credit Agreement, will
be sufficient to cover its working capital, capital expenditures, planned
development and debt service requirements for the remainder of fiscal 1999.
Year 2000
The Year 2000 ("Y2K") problem is the result of computer programs being
written using two digits rather than four to define the applicable year. Any
of the Company's programs that have time-sensitive software may recognize a
date using "00" as the year 1900, rather than the year 2000. This could result
in a major system failure or miscalculations.
As part of the first phase of the Company's Y2K compliance program, the
Company conducted an internal review of its computer systems to identify the
systems that could be affected by the Y2K problem, including
13
<PAGE>
both "information technology" systems (such as software that processes daily
sales and other information) and non-informational technology. The Company is
in the process of completing the second and final phase of its Y2K compliance
program, which involves: (1) the implementation of its existing remediation
plan to resolve the Company's internal Y2K issues, (2) the identification of
any potential Y2K issues with the Company's significant vendors and suppliers
and (3) the evaluation of a contingency plan in the event that the Company or
its significant vendors and suppliers are unable to adequately address Y2K
issues on time. The Company's implementation efforts are substantially
complete, with the remainder to be completed by year end.
Based on assessment efforts to date, the Company presently does not believe
that the Y2K issue will have a material adverse effect on its financial
condition or results of operations. The Company has received assurances from
its major suppliers (including vendors and partners) that they are addressing
the Y2K issue, and that products purchased by the Company from such suppliers
will function properly in year 2000 and thereafter. However, it is impossible
to assess the potential consequences in the event of service interruptions
from suppliers, or in the event that there are disruptions in such
infrastructure areas as utilities, communications, transportation, banking or
government. In the unlikely event that the Company would lose vital utilities
such as electricity, gas, water or communications, the business or operations
could be adversely affected. However, if the point of sale terminals were to
fail, the Company could place a manual check out procedure into place until
the terminals could be brought back on-line with minimal disruption to its
customers. Or, if vital suppliers could not deliver the necessary goods (such
as meat and produce) the Company has enough resources available to obtain
goods from other suitable suppliers. The Company operates a large number of
geographically dispersed stores and has a large supplier base, which should
mitigate any adverse impact.
The Company estimates it will incur less than $1.0 million in expenses to
ensure that all systems will function properly with respect to dates in the
year 2000. These expenses include the replacement of the Company's I.B.M.
point-of-sale terminals as well as minor modifications to the point of sale
system. These expenses are not expected to have a material impact on the
financial position, results of operations or liquidity of the Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is subject to market risk associated with fluctuations in
interest rates. Interest rate risk is primarily limited to the Company's
variable rate debt obligations, which totaled $115.9 million at September 27,
1999. Of this balance, the BankBoston revolver comprised $112.9 million
bearing an interest rate calculated at the lesser of BankBoston's base rate or
the Eurodollar rate plus 2.5%, and the 1995 Franchise Acceptance Corporation
("FAC") Note comprised $1.4 million bearing an interest rate of 2.75% above
FAC's program rate, and the 1998 FAC Note comprised $1.7 million bearing an
interest rate of 2.5% above FAC's program rate. Assuming a 20% increase in
interest rates, the Company would experience an increase in interest expense
of approximately $0.5 million. The Company does not hold any market risk
sensitive financial instruments for trading purposes.
14
<PAGE>
PART II
Item 6. Exhibits, Financial Statement Schedules
Exhibits
The following exhibits are filed as part of this report.
11Statement Re: Computation of Earnings Per Share
12Statement Re: Computation of Ratios
27Financial Data Schedule
A list of exhibits included as part of this Form 10-Q or incorporated by
reference is set forth in the Index to Exhibits. Included in the Index to
Exhibits are the following exhibits which constitute management contracts or
compensatory plans or arrangements.
1.TJC Consulting Agreement
2.Jaro Employment Agreement
3.Osborn Employment Agreement
4.Hubert Employment Agreement
5.Aaseby Employment Agreement
6.Vasatka Employment Agreement
7.New Osborn Employment Agreement
8.Hothorn Employment Agreement
Reports on Form 8-K
On March 03, 1999, the Company filed a Current Report on Form 8-K,
announcing under Item 2 the consummation of the purchase of 30 restaurants in
Wisconsin and the Upper Peninsula of Michigan.
15
<PAGE>
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, in the City of Westchester, State of
Illinois.
Ameriking, Inc.
Date ________________________________ /s/ Lawrence E. Jaro
-------------------------------------
Lawrence E. Jaro
Managing Owner, Chairman and Chief
Executive Officer
Date ________________________________ /s/ Joel Aaseby
-------------------------------------
Joel Aaseby
Chief Financial Officer and
Corporate Secretary (Principal
Financial and Accounting Officer)
16
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
1.1 FORM OF UNDERWRITING AGREEMENT FOR NOTES OFFERING.... *
1.2 FORM OF UNDERWRITING AGREEMENT FOR UNITS OFFERING.... *
2.1++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN BURGER KING CORPORATION ("BKC") AND NATIONAL
RESTAURANT ENTERPRISES, INC. ("ENTERPRISES") (Filed
as exhibit 2.1 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
2.2++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN JARO ENTERPRISES, INC. AND AMERIKING, INC.
(FORMERLY KNOWN AS NRE HOLDINGS, INC.) ("AMERIKING")
(Filed as exhibit 2.2 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
2.3++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN JARO RESTAURANTS, INC. AND AMERIKING (Filed
as exhibit 2.3 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
2.4++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN TABOR RESTAURANTS ASSOCIATES, INC. AND
AMERIKING (Filed as exhibit 2.4 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
2.5++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER, 1,
1994, BETWEEN JB RESTAURANTS, INC. AND AMERIKING
(Filed as exhibit 2.5 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
2.6++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN CASTLEKING, INC. AND AMERIKING (Filed as
exhibit 2.6 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
2.7++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN OSBURGER, INC. AND AMERIKING (Filed as
exhibit 2.7 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
2.8++ PURCHASE AND SALE AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN WHITE-OSBORN RESTAURANTS, INC. AND AMERIKING
(Filed as exhibit 2.8 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
2.9++ PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30, 1994,
BY AND AMONG SHELDON T. FRIEDMAN, BNB LAND VENTURE,
INC. AND ENTERPRISES (Filed as exhibit 2.9 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
2.10++ ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
AMONG DMW, INC., DANIEL L. WHITE AND AMERIKING
COLORADO CORPORATION I (Filed as exhibit 2.10 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
2.11++ ASSET PURCHASE AGREEMENT, DATED JULY 5, 1995, BY AND
AMONG WSG, INC., DANIEL L. WHITE, SUSAN J. WAKEMAN,
GEORGE ALAIZ, JR. AND AMERIKING COLORADO CORPORATION
I (Filed as exhibit 2.11 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
2.12++ PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
AMONG QSC, INC., THE SHAREHOLDERS OF QSC, INC. AND
AMERIKING TENNESSEE CORPORATION I (Filed as exhibit
2.12 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
2.13++ PURCHASE AGREEMENT, DATED NOVEMBER 21, 1995, BY AND
AMONG RO-LANK, INC., THE SHAREHOLDERS OF RO-LANK,
INC. AND AMERIKING TENNESSEE CORPORATION I (Filed as
exhibit 2.13 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
2.14++ PURCHASE AND SALE AGREEMENT, DATED NOVEMBER 30, 1995,
BY AND AMONG C&N DINING, INC. AND AFFILIATES AND
AMERIKING VIRGINIA CORPORATION I (Filed as exhibit
2.14 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
2.15++ AMENDMENT NO. 1 TO PURCHASE AND SALE AGREEMENT, DATED
FEBRUARY 7, 1996, BY AND AMONG C&N DINING, INC. AND
AFFILIATES AND AMERIKING VIRGINIA CORPORATION I
(Filed as exhibit 2.15 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
2.16++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN THIRTY-FORTY, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.16 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
2.17++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN HOUSTON, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.17 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
2.18++ ASSET PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN FIFTH & RACE, INC. AND AMERIKING CINCINNATI
CORPORATION I (Filed as exhibit 2.18 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
2.19 ASSET PURCHASE AGREEMENT among F&P ENTERPRISES, INC.,
THE SHAREHOLDERS OF F&P ENTERPRISES, INC. and
NATIONAL RESTAURANT ENTERPRISES, INC. (Filed as
exhibit 2.19 to AmeriKing's Form 10-Q for the quarter
ended March 30, 1998 and incorporated herein by
reference)........................................... *
2.20 AMENDMENT NO. 1 TO THE ASSET PURCHASE AGREEMENT among
F&P ENTERPRISES, INC., THE SHAREHOLDERS OF F&P
ENTERPRISES, INC. and NATIONAL RESTAURANT
ENTERPRISES, INC. (Filed as exhibit 2.20 to
AmeriKing's Form 10-Q for the quarter ended March 30,
1998 and incorporated herein by reference)........... *
2.21 ASSET PURCHASE AGREEMENT among NORTH FOODS, INC., THE
SHAREHOLDERS OF NORTH FOODS, INC. and NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.21
to AmeriKing's Form 10-Q for the quarter ended March
30, 1998 and incorporated herein by reference)....... *
2.22 ASSET PURCHASE AGREEMENT among NORTH FOODS, INC., THE
SHAREHOLDERS OF NORTH FOODS, INC. and NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.22
to AmeriKing's Form 10-Q for the quarter ended March
30, 1998 and incorporated herein by reference)....... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
2.23 AMENDMENT NO. 2 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 Among F&P ENTERPRISES, INC., THE
SHAREHOLDERS OF F&P ENTERPRISES, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.23
to AmeriKing's Current Report on Form 8-K filed on
July 14, 1997 and incorporated herein by reference).. *
2.24 AMENDMENT NO. 3 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among F&P ENTERPRISES, INC., THE
SHAREHOLDERS OF F&P ENTERPRISES, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.24
to AmeriKing's Current Report on Form 8-K filed on
July 14, 1997 and incorporated herein by reference).. *
2.25 AMENDMENT NO. 2 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among NORTH FOODS, INC., THE
SHAREHOLDERS OF NORTH FOODS, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.25
to AmeriKing's Current Report on Form 8-K filed on
July 14, 1997 and incorporated herein by reference).. *
2.26 AMENDMENT NO. 3 TO THE ASSET PURCHASE AGREEMENT dated
June 16, 1997 among NORTH FOODS, INC., THE
SHAREHOLDERS OF NORTH FOODS, INC. AND NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 2.26
to AmeriKing's Current Report on Form 8-K filed on
July 14, 1997 and incorporated herein by reference).. *
2.27 REAL ESTATE PURCHASE AGREEMENT dated March 7, 1997
among T&B LEASING, THOMAS FICKLING AND WILLIAM
PRENTICE (the "PARTNERS"), AND CASTLE PROPERTIES,
LLC. (Filed as exhibit 2.27 to AmeriKing's Current
Report on Form 8-K filed on July 14, 1997 and
incorporated herein by reference).................... *
2.28 AMENDMENT NO. 1 TO THE REAL ESTATE PURCHASE AGREEMENT
dated April 8, 1997 among T&B LEASING, THOMAS
FICKLING AND WILLIAM PRENTICE (the "PARTNERS") AND
CASTLE PROPERTIES, LLC. (Filed as exhibit 2.28 to
AmeriKing's Current Report on Form 8-K filed on July
14, 1997 and incorporated herein by reference)....... *
2.29 AMENDMENT NO. 2 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among T&B LEASING, THOMAS
FICKLING AND WILLIAM PRENTICE (the "PARTNERS"),
CASTLE PROPERTIES, LLC AND NATIONAL RESTAURANT
ENTERPRISES, INC. (Filed as exhibit 2.29 to
AmeriKing's Current Report on Form 8-K filed on July
14, 1997 and incorporated herein by reference)....... *
2.30 AMENDMENT NO. 3 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among T&B LEASING, THOMAS
FICKLING AND WILLIAM PRENTICE, INVESTORS TITLE
EXCHANGE CORPORATION, AND NATIONAL RESTAURANT
ENTERPRISES, INC. (Filed as exhibit 2.30 to
AmeriKing's Current Report on Form 8-K filed on July
14, 1997 and incorporated herein by reference)....... *
2.31 REAL ESTATE PURCHASE AGREEMENT dated March 7, 1997
among W&W INVESTMENTS LIMITED PARTNERSHIP, THOMAS
FICKLING AND WILLIAM PRENTICE (the "GENERAL
PARTNERS"), AND CASTLE PROPERTIES, LLC. (Filed as
exhibit 2.31 to AmeriKing's Current Report on Form 8-
K filed on July 14, 1997 and incorporated herein by
reference)........................................... *
2.32 AMENDMENT NO. 1 TO THE REAL ESTATE PURCHASE AGREEMENT
dated April 8, 1997 among W&W INVESTMENTS LIMITED
PARTNERSHIP, THOMAS FICKLING AND WILLIAM PRENTICE
(the "PARTNERS") AND CASTLE PROPERTIES, LLC. (Filed
as exhibit 2.32 to AmeriKing's Current Report on Form
8-K filed on July 14, 1997 and incorporated herein by
reference)........................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
2.33 AMENDMENT NO. 2 TO THE REAL ESTATE PURCHASE AGREEMENT
dated June 16, 1997 among W&W INVESTMENT LIMITED
PARTNERSHIP, THOMAS FICKLING AND WILLIAM PRENTICE
(the "GENERAL PARTNERS"), CASTLE PROPERTIES, LLC AND
NATIONAL RESTAURANT ENTERPRISES, INC. (Filed as
exhibit 2.33 to AmeriKing's Current Report on Form 8-
K filed on July 14, 1997 and incorporated herein by
reference)........................................... *
2.34 STOCK PURCHASE AGREEMENT DATED JULY 22, 1997 among
THE SHAREHOLDERS OF B&J RESTAURANTS, INC., and
NATIONAL RESTAURANT ENTERPRISES, INC. (Filed as
exhibit 2.34 to AmeriKing's Form 10-Q for the quarter
ended June 30, 1997)................................. *
3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
AMERIKING (Filed as exhibit 3.1 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
3.2 AMENDED AND RESTATED BYLAWS OF AMERIKING (Filed as
exhibit 3.2 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.1 STOCKHOLDERS AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG AMERIKING AND THE STOCKHOLDERS APPEARING ON
THE SIGNATURE PAGES THERETO (Filed as exhibit 4.1 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.2 CONSENT AND AMENDMENT NO. 1 TO STOCKHOLDERS
AGREEMENT, DATED NOVEMBER 30, 1994, BY AND AMONG
AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
SIGNATURE PAGES THERETO (Filed as exhibit 4.2 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.3 CONSENT AND AMENDMENT NO. 2 TO STOCKHOLDERS
AGREEMENT, DATED FEBRUARY 7, 1996, BY AND AMONG
AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
SIGNATURE PAGES THERETO (Filed as exhibit 4.3 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.4 AMENDED AND RESTATED STOCKHOLDERS AGREEMENT BY AND
AMONG AMERIKING AND THE STOCKHOLDERS APPEARING ON THE
SIGNATURE PAGES THERETO (Filed as exhibit 4.4 to
AmeriKing's Form 10-K for the year ended December 30,
1996 and incorporated herein by reference)........... *
4.5 MANAGEMENT SUBSCRIPTION AGREEMENT, DATED SEPTEMBER 1,
1994, BY AND AMONG AMERIKING, TABOR RESTAURANT
ASSOCIATES, INC., JARO ENTERPRISES, INC., JARO
RESTAURANTS, INC., JB RESTAURANTS, INC., CASTLEKING,
INC., WHITE-OSBORN RESTAURANTS, INC., OSBURGER, INC.,
LAWRENCE JARO, WILLIAM OSBORN, GARY HUBERT, JOEL
AASEBY, DONALD STAHURSKI AND SCOTT VASATKA (Filed as
exhibit 4.5 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.6 STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN AMERIKING AND SCOTT VASATKA (Filed as exhibit
4.6 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
4.7 STOCK OPTION AGREEMENT, DATED SEPTEMBER 1, 1994,
BETWEEN AMERIKING AND DONALD STAHURSKI (Filed as
exhibit 4.7 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.8 WARRANT AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
AMERIKING AND THE FIRST NATIONAL BANK OF BOSTON
(Filed as exhibit 4.8 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
4.9 COMMON STOCK PURCHASE WARRANT, DATED SEPTEMBER 1,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS
INC. (Filed as exhibit 4.9 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.10 FIRST AMENDMENT TO COMMON STOCK PURCHASE WARRANT,
DATED NOVEMBER 30, 1994 (Filed as exhibit 4.10 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.11 SECOND AMENDMENT TO COMMON STOCK PURCHASE WARRANT,
DATED FEBRUARY 7, 1996 (Filed as exhibit 4.11 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.12 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO MCIT PLC IN THE AGGREGATE PRINCIPAL
AMOUNT OF $11,000,000 (Filed as exhibit 4.12 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.13 AMENDED AND RESTATED DEFERRED LIMITED INTEREST
GUARANTY, DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO
MCIT PLC (Filed as exhibit 4.13 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.14 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JARO ENTERPRISES, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $1,224,000 (Filed as
exhibit 4.14 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.15 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JARO RESTAURANTS, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $112,000 (Filed as
exhibit 4.15 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.16 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO JB RESTAURANTS, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $2,019,000 (Filed as
exhibit 4.16 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.17 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO CASTLEKING, INC. IN THE AGGREGATE
PRINCIPAL AMOUNT OF $385,769 (Filed as exhibit 4.17
to AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.18 AMENDED AND RESTATED NOTE, DATED FEBRUARY 7, 1996,
FROM AMERIKING TO WHITE-OSBORN RESTAURANTS, INC. IN
THE AGGREGATE PRINCIPAL AMOUNT OF $659,231 (Filed as
exhibit 4.18 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
4.19 SECURITIES PURCHASE AGREEMENT, DATED NOVEMBER 30,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
INC. (Filed as exhibit 4.19 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.20 COMMON STOCK PURCHASE WARRANT, DATED NOVEMBER 30,
1994, BETWEEN AMERIKING AND BANCBOSTON INVESTMENTS,
INC. (Filed as exhibit 4.20 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.21 JUNIOR SUBORDINATED NOTE, DATED NOVEMBER 30, 1994,
FROM AMERIKING TO BANCBOSTON INVESTMENTS, INC. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $600,000 (Filed as
exhibit 4.21 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.22 SECURED PROMISSORY NOTE, DATED NOVEMBER 21, 1995,
FROM AMERIKING TENNESSEE CORPORATION I TO BKC IN THE
AGGREGATE PRINCIPAL AMOUNT OF $6,920,700 (Filed as
exhibit 4.22 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.23 AMENDMENT TO SECURED PROMISSORY NOTE, DATED MAY 21,
1996, FROM AMERIKING TENNESSEE CORPORATION I TO BKC
IN THE AGGREGATE PRINCIPAL AMOUNT OF $6,093,067
(Filed as exhibit 4.23 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
4.24 GUARANTY, DATED NOVEMBER 21, 1995, FROM LAWRENCE JARO
AND WILLIAM OSBORN TO BKC (Filed as exhibit 4.24 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.25 RATIFICATION OF GUARANTY, MAY 21, 1996, FROM LAWRENCE
JARO AND WILLIAM OSBORN TO BKC (Filed as exhibit 4.25
to AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.26 PROMISSORY NOTE, DATED NOVEMBER 29, 1995, FROM
AMERIKING COLORADO CORPORATION I TO FRANCHISE
ACCEPTANCE CORPORATION LIMITED IN THE AGGREGATE
PRINCIPAL AMOUNT OF $1,865,000 (Filed as exhibit 4.26
to AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
4.27 AMENDMENT TO PROMISSORY NOTE, DATED DECEMBER 14,
1995, FROM AMERIKING COLORADO CORPORATION I TO
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 4.27 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.28 COMMON STOCK PURCHASE WARRANT, DATED FEBRUARY 7,
1996, FROM AMERIKING TO PMI MEZZANINE FUND, L.P.
(Filed as exhibit 4.28 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
4.29 SENIOR SUBORDINATED NOTE, DATED FEBRUARY 7, 1996,
FROM ENTERPRISES TO PMI MEZZANINE FUND, L.P. IN THE
AGGREGATE PRINCIPAL AMOUNT OF $15,000,000. (Filed as
exhibit 4.29 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
4.30 SUBORDINATED GUARANTY, DATED FEBRUARY 7, 1996, FROM
AMERIKING VIRGINIA CORPORATION I AND AMERIKING
CINCINNATI CORPORATION I TO PMI MEZZANINE FUND, L.P.
(Filed as exhibit 4.30 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
4.31 SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE,
DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 4.31 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by reference). *
4.32 SECOND AMENDED AND RESTATED TERM LOAN A NOTE, DATED
FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS AGENT (Filed as
exhibit 4.32 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by reference). *
4.33 SECOND AMENDED AND RESTATED TERM LOAN B NOTE, DATED
FEBRUARY 7, 1996, FROM ENTERPRISES TO THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON, AS (Filed as exhibit
4.33 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference).......... *
4.34 LIMITED GUARANTY, DATED SEPTEMBER 1, 1994, FROM
AMERIKING TO THE FIRST NATIONAL BANK OF BOSTON, THE
OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
AGENT (Filed as exhibit 4.34 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
4.35 GUARANTY, DATED FEBRUARY 7, 1996, FROM AMERIKING
VIRGINIA CORPORATION I AND AMERIKING CINCINNATI
CORPORATION I TO THE FIRST NATIONAL BANK OF BOSTON,
THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1
THERETO, AND THE FIRST NATIONAL BANK OF BOSTON, AS
AGENT (Filed as exhibit 4.35 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
4.36 UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE,
DATED FEBRUARY 7, 1996, FROM ENTERPRISES TO FFCA
ACQUISITION CORPORATION (Filed as exhibit 4.36 to
AmeriKing's Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
4.37 FORM OF AMENDMENT NO. 1 TO COMMON STOCK PURCHASE
WARRANT FROM AMERIKING TO PMI MEZZANINE FUND, L.P..... *
4.38 INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
TO SENIOR NOTES (Filed as exhibit 4.38 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
4.39 FORM OF SENIOR NOTES (ATTACHED TO EXHIBIT 4.38)....... *
4.40 INDENTURE BETWEEN AMERIKING AND TRUSTEE WITH RESPECT
TO EXCHANGE DEBENTURES (Filed as exhibit 4.40 to
AmeriKing's Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
4.41 INTENTIONALLY OMITTED................................. *
4.42 FORM OF EXCHANGE DEBENTURES (ATTACHED TO EXHIBIT
4.40)................................................. *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
4.43 PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
OF $6,100,000 (Filed as exhibit 4.43 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.44 CERTIFICATE OF DESIGNATION RELATING TO THE SENIOR
PREFERRED STOCK (Filed as exhibit 4.44 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.45 PROMISSORY NOTE, DATED JULY 18, 1996, FROM AMERIKING
TENNESSEE CORPORATION I TO FRANCHISE ACCEPTANCE
CORPORATION LIMITED IN THE AGGREGATE PRINCIPAL AMOUNT
OF $900,000 (Filed as exhibit 4.45 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
4.46 AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT BY AND
AMONG AMERIKING, SCOTT VASATKA AND DONALD STAHURSKI
(Filed as exhibit 4.46 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................. *
4.47 AMENDMENT NO. 1 TO MANAGEMENT SUBSCRIPTION AGREEMENT
(Filed as exhibit 4.47 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................. *
9.1 JARO PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY AND
AMONG LAWRENCE JARO, TABOR RESTAURANT ASSOCIATES,
INC., JARO ENTERPRISES, INC., JARO RESTAURANTS, INC.
AND JB RESTAURANTS, INC. (Filed as exhibit 9.1 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
9.2 OSBORN PROXY AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG WILLIAM OSBORN, CASTLEKING, INC., OSBURGER,
INC. AND WHITE-OSBORN, INC. (Filed as exhibit 9.2 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.1 SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT, DATED FEBRUARY 7, 1996, BY AND AMONG
AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.1 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.2 SECURITY AGREEMENT, DATED SEPTEMBER 1, 1994, BY AND
AMONG ENTERPRISES AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.2 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.3 AMENDMENT TO SECURITY AGREEMENT, DATED FEBRUARY 7,
1996, BY AND AMONG ENTERPRISES AND THE FIRST NATIONAL
BANK OF BOSTON, THE OTHER LENDING INSTITUTIONS LISTED
ON SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.3 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.4 STOCK PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG AMERIKING AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.4 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.5 AMENDMENT TO STOCK PLEDGE AGREEMENT, DATED FEBRUARY
7, 1996, BY AND AMONG AMERIKING AND THE FIRST
NATIONAL BANK OF BOSTON, THE OTHER LENDING
INSTITUTIONS LISTED ON SCHEDULE 1 THERETO, AND THE
FIRST NATIONAL BANK OF BOSTON AS AGENT (Filed as
exhibit 10.5 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.6 SECURITY AGREEMENT, DATED FEBRUARY 7, 1996, BY AND
AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
CINCINNATI CORPORATION I AND THE FIRST NATIONAL BANK
OF BOSTON (Filed as exhibit 10.6 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.7 STOCK PLEDGE AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG ENTERPRISES, AMERIKING VIRGINIA CORPORATION
I, AMERIKING CINCINNATI CORPORATION I AND THE FIRST
NATIONAL BANK OF BOSTON (Filed as exhibit 10.7 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.8 AMENDED AND RESTATED PURCHASE AGREEMENT, DATED
FEBRUARY 7, 1996, BETWEEN AMERIKING AND MCIT PLC
(Filed as exhibit 10.8 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.9 PLEDGE AGREEMENT, DATED SEPTEMBER 1, 1994, BETWEEN
AMERIKING AND MCIT PLC (Filed as exhibit 10.9 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.10 SUBORDINATION AGREEMENT, DATED SEPTEMBER 1, 1994, BY
AND AMONG BKC, MCIT PLC AND AMERIKING (Filed as
exhibit 10.10 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.11 AMENDMENT AND CONSENT NO. 1 TO SECURITIES PURCHASE
AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN AMERIKING
AND BANCBOSTON INVESTMENTS, INC. (Filed as exhibit
10.11 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
10.12 INTERCREDITOR AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG BKC, AMERIKING VIRGINIA CORPORATION I,
AMERIKING CINCINNATI CORPORATION I, LAWRENCE JARO,
WILLIAM OSBORN, GARY HUBERT, ENTERPRISES, AMERIKING
AND THE FIRST NATIONAL BANK OF BOSTON (Filed as
exhibit 10.12 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.13 STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
BETWEEN ENTERPRISES AND BKC (Filed as exhibit 10.13
to AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.14 RATIFICATION OF STOCK PLEDGE AGREEMENT, DATED MAY 21,
1996, BETWEEN ENTERPRISES AND BKC (Filed as exhibit
10.14 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.15 STOCK PLEDGE AGREEMENT, DATED NOVEMBER 21, 1995,
BETWEEN ENTERPRISES AND THE FIRST NATIONAL BANK OF
BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE 1 THERETO, AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.15 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.16 NOTE PURCHASE AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING, ENTERPRISES AND PMI MEZZANINE
FUND, L.P. (Filed as exhibit 10.16 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.17 FORM OF AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT,
BY AND AMONG AMERIKING, ENTERPRISES AND PMI MEZZANINE
FUND, L.P............................................ *
10.18 SUBORDINATION AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING, ENTERPRISES, AMERIKING VIRGINIA
CORPORATION I, AMERIKING CINCINNATI CORPORATION I,
AMERIKING TENNESSEE CORPORATION I, AMERIKING COLORADO
CORPORATION I, LAWRENCE JARO, WILLIAM OSBORN, GARY
HUBERT AND BKC (Filed as exhibit 10.18 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.19 SALE-LEASEBACK AGREEMENT, DATED FEBRUARY 7, 1996, BY
AND AMONG AMERIKING VIRGINIA CORPORATION I, AMERIKING
TENNESSEE CORPORATION I AND FFCA ACQUISITION
CORPORATION (Filed as exhibit 10.19 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.20 LEASE, DATED FEBRUARY 7, 1996, BY AND AMONG AMERIKING
VIRGINIA CORPORATION I, AMERIKING TENNESSEE
CORPORATION I AND FFCA ACQUISITION CORPORATION (Filed
as exhibit 10.20 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.21 FORM OF FRANCHISE AGREEMENT BETWEEN BKC AND
FRANCHISEE (Filed as exhibit 10.21 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.22 SCHEDULE OF AMERIKING FRANCHISE AGREEMENTS (Filed as
exhibit 10.22 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.23 FORM OF LEASE AGREEMENT BETWEEN BKC AND LESSEE (Filed
as exhibit 10.23 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)........................................... *
10.24 SCHEDULE OF AMERIKING LEASE AGREEMENTS (Filed as
exhibit 10.24 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.25 FORM OF GUARANTEE, INDEMNIFICATION AND
ACKNOWLEDGEMENT OF BKC FRANCHISE AGREEMENT (Filed as
exhibit 10.25 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.26 FORM OF GUARANTEE, INDEMNIFICATION AND ACKNOWLEDGMENT
OF BKC LEASE AGREEMENT (Filed as exhibit 10.26 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.27 CAPITAL EXPENDITURE AGREEMENT, DATED SEPTEMBER 1,
1994, BY AND AMONG AMERIKING, ENTERPRISES AND BKC
(Filed as exhibit 10.27 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)............................................ *
10.28 CAPITAL EXPENDITURE AGREEMENT, DATED NOVEMBER 21,
1995, BY AND AMONG ENTERPRISES, AMERIKING TENNESSEE
CORPORATION I AND BKC (Filed as exhibit 10.28 to
AmeriKing's Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.29 LETTER AGREEMENT, DATED FEBRUARY 7, 1996, BETWEEN
ENTERPRISES AND BKC (Filed as exhibit 10.29 to
AmeriKing's Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.30 NAPARLO DEVELOPMENT AGREEMENT, DATED FEBRUARY 7, 1996,
BETWEEN AMERIKING VIRGINIA CORPORATION I AND JOSEPH J.
NAPARLO (Filed as exhibit 10.30 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.31 MANAGEMENT CONSULTING AGREEMENT, DATED SEPTEMBER 1,
1994, BY AND AMONG TJC MANAGEMENT CORPORATION,
AMERIKING AND ENTERPRISES (Filed as exhibit 10.31 to
AmeriKing's Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.32 INTENTIONALLY OMITTED................................. *
10.33 INTERCOMPANY MANAGEMENT CONSULTING AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN ENTERPRISES AND AMERIKING
(Filed as exhibit 10.33 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)............................................ *
10.34 AMENDED AND RESTATED TAX SHARING AGREEMENT, DATED
FEBRUARY 7, 1996, BETWEEN ENTERPRISES AND AMERIKING
(Filed as exhibit 10.34 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)............................................ *
10.35 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN LAWRENCE JARO AND
ENTERPRISES (Filed as exhibit 10.35 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.36 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN WILLIAM OSBORN AND
ENTERPRISES (Filed as exhibit 10.36 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference)..................... *
10.37 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN GARY HUBERT AND ENTERPRISES
(Filed as exhibit 10.37 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)............................................ *
10.38 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN JOEL AASEBY AND ENTERPRISES
(Filed as exhibit 10.38 to AmeriKing's Registration
Statement (No. 333-04261) and incorporated herein by
reference)............................................ *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.39 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED
SEPTEMBER 1, 1994, BETWEEN SCOTT VASATKA AND
ENTERPRISES (Filed as exhibit 10.39 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.40 EMPLOYMENT AND NON-INTERFERENCE AGREEMENT, DATED MAY
1, 1997, BETWEEN AUGUSTUS F. HOTHORN AND NATIONAL
RESTAURANT ENTERPRISES, INC. (Filed as exhibit 10.40
to AmeriKing's Form 10-Q for the three quarters ended
September 29, 1997 and incorporated herein by
reference)........................................... *
10.41 FORM OF INDEMNIFICATION AGREEMENT BY AND AMONG
AMERIKING AND EACH OF THE SIGNATORIES TO THIS
REGISTRATION STATEMENT (Filed as exhibit 10.41 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
10.42 INTENTIONALLY OMITTED................................
10.43 INTENTIONALLY OMITTED................................
10.44 LEASE AGREEMENT FOR WESTCHESTER, ILLINOIS
HEADQUARTERS (Filed as exhibit 10.44 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.45 LOAN AND SECURITY AGREEMENT, DATED NOVEMBER 29, 1995,
BETWEEN AMERIKING COLORADO CORPORATION I AND
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 10.45 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.46 LOAN AND SECURITY AGREEMENT, DATED JULY 21, 1996,
BETWEEN AMERIKING TENNESSEE CORPORATION I AND
FRANCHISE ACCEPTANCE CORPORATION LIMITED (Filed as
exhibit 10.46 to AmeriKing's Registration Statement
(No. 333-04261) and incorporated herein by
reference)........................................... *
10.47 FORM OF INTERCREDITOR AGREEMENT BY AND AMONG BKC,
AMERIKING, AND THE TRUSTEE AS REPRESENTATIVE OF THE
HOLDERS OF SENIOR NOTES UNDER THE INDENTURE (ATTACHED
TO EXHIBIT 4.38)..................................... *
10.48 RESTATED EMPLOYMENT AND NON-INTERFERENCE AGREEMENT
BETWEEN WILLIAM OSBORN AND ENTERPRISES (Filed as
exhibit 10.48 to AmeriKing's Form 10-K for the year
ended December 30, 1996 and incorporated herein by
reference)........................................... *
10.49 RECAPITALIZATION AGREEMENT AMONG AMERIKING AND THE
STOCKHOLDERS APPEARING ON THE SIGNATURE PAGES THERETO
(Filed as exhibit 10.49 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................. *
10.50 MEMORANDUM OF UNDERSTANDING BETWEEN BKC AND THE
COMPANY (Filed as exhibit 10.50 to AmeriKing's
Registration Statement (No. 333-04261) and
incorporated herein by reference).................... *
10.51 AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT AND LOAN AGREEMENT, DATED MAY 14, 1996, BY AND
AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK
OF BOSTON, THE OTHER LENDING INSTITUTIONS LISTED ON
SCHEDULE I THERETO AND THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT (Filed as exhibit 10.51 to
AmeriKing's Form 10-K for the year ended December 30,
1996 and incorporated herein by reference)........... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
------- ----------- ------------
<C> <S> <C>
10.52 ASSIGNMENT AND ACCEPTANCE DATED MAY 14, 1996, BY AND
AMONG AMERIKING, ENTERPRISES, THE FIRST NATIONAL BANK
OF BOSTON AND THE OTHER LENDING INSTITUTIONS, LISTED
THERETO AND THE FIRST NATIONAL BANK OF BOSTON, AS
AGENT (Filed as exhibit 10.52 to AmeriKing's Form 10-
K for the year ended December 30, 1996 and
incorporated herein by reference).................... *
10.53 FORM OF OPERATING AGREEMENT BY AND AMONG BKC,
AMERIKING ENTERPRISES, AMERIKING COLORADO CORPORATION
I, AMERIKING ILLINOIS CORPORATION I, AMERIKING
TENNESSEE CORPORATION I, AMERIKING VIRGINIA
CORPORATION I AND AMERIKING CINCINNATI CORPORATION I
(Filed as exhibit 10.53 to AmeriKing's Form 10-K for
the year ended December 30, 1996 and incorporated
herein by reference)................................. *
10.54 THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of June 17, 1997 among NATIONAL RESTAURANT
ENTERPRISES, INC., AMERIKING INC. and BANKBOSTON,
N.A.................................................. *
11++++ STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE......
12++++ STATEMENTS RE: COMPUTATION OF RATIOS.................
21 SUBSIDIARIES OF AMERIKING (Filed as exhibit 10.21 to
AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
23.1 CONSENT OF MAYER, BROWN & PLATT (Filed as exhibit
23.1 to AmeriKing's Registration Statement (No. 333-
04261) and incorporated herein by reference)......... *
23.2 CONSENT OF DELOITTE & TOUCHE (Filed as exhibit 23.2
to AmeriKing's Registration Statement (No. 333-04261)
and incorporated herein by reference)................ *
24 POWER OF ATTORNEY.................................... *
25 T-1 FOR EXCHANGE DEBENTURE INDENTURE................. *
26 T-1 FOR SENIOR NOTE INDENTURE........................ *
27++++ FINANCIAL DATA SCHEDULE..............................
</TABLE>
- --------
* Previously filed.
++The schedules and exhibits to these agreements have not been filed
pursuant to Item 601(b)(2) of Regulation S-K. Such schedules and exhibits
will be filed supplementally upon the request of the Securities and
Exchange Commission.
++++Superseding exhibit.
<PAGE>
AMERIKING, INC.
CALCULATION OF EPS
<TABLE>
<CAPTION>
Dec. 29, 1998 to Dec. 30, 1997 to
Sep. 27, 1999 Sep. 28, 1998
---------------- ----------------
<S> <C> <C>
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM...... 778,000 1,766,000
Earnings available to stockholders...........
Dividends....................................
Preferred Stock............................ (435,000) (338,000)
Senior Preferred Stock..................... (3,927,000) (3,455,000)
Amortization of issuance costs............... (90,000) (90,000)
---------- ----------
Income (loss) before extraordinary item
available to common stockholders............ (3,674,000) (2,117,000)
Extraordinary item--loss from early
extinguishment of debt (net of taxes)....... -- --
---------- ----------
Income (loss) available to common
stockholders................................ (3,674,000) (2,117,000)
Weighted average number of common shares..... 902,992 902,992
Dilutive effect of options and warrants...... -- --
---------- ----------
Weighted average number of common shares
outstanding--basic.......................... 902,992 902,992
Net income (loss) per common share before
extraordinary item--basic................... (4.07) (2.34)
Extraordinary item--basic.................... -- --
---------- ----------
Net income (loss) per common share--basic.... (4.07) (2.34)
Net income (loss) per common share before
extraordinary item--diluted................. (4.07) (2.34)
Extraordinary item--diluted.................. -- --
---------- ----------
Net income (loss) per common share--diluted.. (4.07) (2.34)
Weighted average number of common shares
basic:
Original shares............................ 863,290 863,290
Option shares.............................. 9,702 9,702
Warrant shares............................. -- --
Common stock units......................... 30,000 30,000
---------- ----------
Total.................................... 902,992 902,992
Weighted average number of common shares--
diluted
Original shares............................ 863,290 863,290
Option shares.............................. 9,702 9,702
Warrant shares............................. -- --
Common stock units......................... 30,000 30,000
---------- ----------
Total.................................... 902,992 902,992
</TABLE>
<PAGE>
AMERIKING, INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Dec. 29, 1998 to Dec. 30, 1997 to
Sep. 27, 1999 Sep. 28, 1998
--------------------- ---------------------
W/O PIK With PIK W/O PIK With PIK
Dividends Dividends Dividends Dividends
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
EARNINGS
Income (loss) before income taxes
benefit......................... 1,297,000 1,297,000 2,523,000 2,523,000
Interest expense................. 15,187,000 15,187,000 12,116,000 12,116,000
Amortization of deffered
financing costs................. 642,000 642,000 640,000 640,000
Portion of rents representative
of interest..................... 6,807,000 6,807,000 5,206,000 5,206,000
Preferred stock PIK dividends.... -- 435,000 -- 338,000
---------- ---------- ---------- ----------
Total earnings................. 23,933,000 24,368,000 20,485,000 20,823,000
---------- ---------- ---------- ----------
FIXED CHARGES
Interest expense................. 15,187,000 15,187,000 12,116,000 12,116,000
Amortization of deffered
financing costs................. 642,000 642,000 640,000 640,000
Portion of rents representative
of interest..................... 6,807,000 6,807,000 5,206,000 5,206,000
Preferred stock PIK dividends.... -- 435,000 -- 338,000
---------- ---------- ---------- ----------
Total Fixed Charges............ 22,636,000 23,071,000 17,962,000 18,300,000
========== ========== ========== ==========
RATIO OF EARNINGS TO FIXED CHARGES. 1.06 1.06 1.14 1.14
========== ========== ========== ==========
INSUFFICIENT EARNINGS TO COVER
FIXED CHARGES..................... N/A N/A N/A N/A
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
fiscal 1999 Consolidated Financial Statements of Ameriking, Inc. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-27-1999
<PERIOD-START> DEC-29-1998
<PERIOD-END> SEP-27-1999
<CASH> 13,251
<SECURITIES> 0
<RECEIVABLES> 2,270
<ALLOWANCES> 0
<INVENTORY> 3,236
<CURRENT-ASSETS> 19,700
<PP&E> 105,158
<DEPRECIATION> 28,018
<TOTAL-ASSETS> 284,214
<CURRENT-LIABILITIES> 31,072
<BONDS> 100,000
43,020
0
<COMMON> 9
<OTHER-SE> (12,064)
<TOTAL-LIABILITY-AND-EQUITY> 284,214
<SALES> 287,128
<TOTAL-REVENUES> 287,128
<CGS> 90,885
<TOTAL-COSTS> 255,980
<OTHER-EXPENSES> 14,444
<LOSS-PROVISION> 220
<INTEREST-EXPENSE> 15,187
<INCOME-PRETAX> 1,297
<INCOME-TAX> 519
<INCOME-CONTINUING> 778
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 778
<EPS-BASIC> (4.07)
<EPS-DILUTED> (4.07)
</TABLE>
