<PAGE>
UNITED STATES
SECURITIES AND 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 March 30, 1997
--------------------
[ ] 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 0-21205
NEW YORK BAGEL ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Kansas 73-1369185
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 I.M.A. Plaza
250 North Water Street
Wichita, Kansas 67202-1213
(Address of principal executive offices and zip code)
(316) 267-7373
(Registrant's telephone number, including area code)
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 filings
requirements for the past 90 days. [x] Yes [ ] No
As of May 9, 1997, there were 4,667,500 shares of the Registrant's Common Stock
outstanding.
<PAGE>
NEW YORK BAGEL ENTERPRISES, INC.
INDEX
PAGE NO.
--------
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Unaudited Consolidated Balance Sheets at March 30, 1997
and December 29, 1996 3
Unaudited Consolidated Statement of Operations for the
Thirteen weeks ended March 30, 1997 and
March 31, 1996 4
Unaudited Consolidated Statements of Cash Flows
for the Thirteen weeks ended March 30, 1997
and March 31, 1996 5
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II - OTHER INFORMATION 13
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Report on Form 8-K/A. An amendment to the current report
filed with respect to the acquisition of Lots A' Bagels, Inc.
was filed on February 18, 1997
SIGNATURES 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
NEW YORK BAGEL ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 30, 1997 AND DECEMBER 29, 1996
March 30, December 29,
1997 1996(a)
----------- ------------
ASSETS (Unaudited)
Cash and cash equivalents $ 1,303,939 $ 1,305,130
Investment securities available for sale 2,518,709 4,265,862
Accounts receivable 464,912 315,293
Inventories, raw materials 283,358 272,261
Deferred costs 177,594 239,269
Income tax receivable -- 87,783
Prepaid expenses 130,391 120,145
----------- -----------
Total current assets 4,878,903 6,605,743
Property, plant and equipment, net 9,077,227 7,616,344
Goodwill, net of accumulated amortization of
$38,142 and $26,341 at March 30, 1997 and
December 29, 1996, respectively 1,062,074 806,016
Other assets 197,371 145,118
----------- -----------
$15,215,575 $15,173,221
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current installments of long-term debt $ 28,750 $ 28,750
Accounts payable 316,810 515,206
Accrued payroll and benefits 229,381 220,182
Accrued liabilities 349,243 262,113
Income taxes payable 60,000 --
Deferred income taxes 41,569 56,808
Current portion of deferred franchise fees 41,000 61,000
Distributions payable 17,216 164,194
----------- -----------
Total current liabilities 1,083,969 1,308,253
Long-term debt, less current installments 57,500 57,500
Deferred franchise fees 21,000 34,000
Deferred rents payable 76,467 72,035
Deferred income taxes 42,751 26,600
----------- -----------
Total liabilities 1,281,687 1,498,388
----------- -----------
Stockholders' equity:
Class A common stock, $.01 par value.
Authorized 30,000,000 shares; issued
and outstanding 4,667,500 shares. 46,675 46,675
Additional paid in capital 13,390,769 13,390,769
Retained earnings 496,444 237,389
----------- -----------
Total stockholders' equity 13,933,888 13,674,833
----------- -----------
$15,215,575 $15,173,221
----------- -----------
----------- -----------
(a) The balance sheet at December 29, 1996 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to unaudited consolidated financial statements.
3
<PAGE>
NEW YORK BAGEL ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THIRTEEN WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996
(Unaudited)
<TABLE>
Thirteen Weeks
Ended
March 30, March 31,
1997 1996
---------- -----------
<S> <C> <C>
Revenues:
Sales from Company-owned restaurants $4,289,602 $2,219,415
Franchise revenues 185,047 169,310
---------- ----------
Total revenues 4,474,649 2,388,725
---------- ----------
Costs and expenses:
Costs of sales 1,363,774 813,230
Restaurant operating expenses 2,101,073 959,684
General and administrative expenses 369,759 207,325
Depreciation and amortization 279,949 70,963
---------- ----------
Total costs and expenses 4,114,555 2,051,202
---------- ----------
Operating income 360,094 337,523
Interest income (expense), net 60,642 (77,125)
---------- ----------
Earnings before income taxes 420,736 260,398
Income tax expense (Note 3) 161,681 ---
---------- ----------
Net earnings $ 259,055 $ 260,398
---------- ----------
---------- ----------
Earnings per share (Note 4) $ 0.06 $ 0.05
Weighted average number of shares outstanding (Note 4) 4,667,500 3,018,538
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
NEW YORK BAGEL ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THIRTEEN WEEKS ENDED MARCH 30, 1997 AND MARCH 31, 1996
(Unaudited)
<TABLE>
Thirteen Weeks
Ended
March 30, March 31,
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 259,055 $ 260,398
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 279,949 70,963
Increase (decrease) in cash resulting from changes in
listed items, net of effects from acquisitions:
Deferred income taxes 912 --
Inventory (3,057) 38,655
Income taxes receivable 87,783 --
Prepaid expenses (10,246) (63,185)
Accounts receivable (149,619) (55,079)
Deferred costs (26,978) (97,757)
Other assets (45,179) (2,016)
Accounts payable (198,396) 101,887
Accrued liabilities, accrued payroll and benefits,
and deferred rents payable 100,761 218,434
Income taxes payable 60,000 --
Deferred franchise fees (33,000) (63,000)
---------- ----------
Net cash provided by operating activities 321,985 409,300
---------- ----------
Cash flows from investing activities:
Additions to property, plant and equipment (1,452,525) (466,171)
Acquisitions, net of cash acquired (470,826) --
Purchase of investment securities available for sale (4,095,964) --
Proceeds from sales and maturities of investment
securities available for sale 5,843,117 --
---------- ----------
Net cash used in investing activities (176,198) (466,171)
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt -- 349,000
Principal payments on long-term debt -- (110,120)
Decrease in distributions payable (146,978) --
Deferred offering costs -- (94,695)
---------- ----------
Net cash (used in) provided by
financing activities (146,978) 144,185
---------- ----------
Net increase (decrease) in cash (1,191) 87,314
Cash at beginning of period 1,305,130 133,425
---------- ----------
Cash at end of period $1,303,939 $ 220,739
---------- -----------
---------- -----------
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
5
<PAGE>
NEW YORK BAGEL ENTERPRISES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) OPERATIONS
The Company owns and franchises New York Bagel and Lots A' Bagels
restaurants that provide a wide variety of bagels that are made from scratch,
boiled and baked in the traditional "New York style." Breakfast menu items
include a wide variety of bagels and custom-blended cream cheeses, gourmet
coffees, muffins and croissants. Lunch and dinner items include an
assortment of bagel delicatessen sandwiches, prepared salads, cookies and
soft drinks. As of March 30, 1997, the Company has 36 Company-owned
restaurants primarily located in Oklahoma, Kansas, Colorado and Tennessee and
32 franchised restaurants located throughout the United States.
Effective January 1, 1996, the Company elected to change its fiscal year
from a calendar year end to a 52/53 week fiscal year, ending on the last
Sunday of the year, which consists of four 13-week periods. Effective August
27, 1996 the Company completed an initial public offering in which it sold
1,867,500 shares of its Class A common stock and realized net proceeds of
$14,679,032.
(2) BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements are for
interim periods and consequently, do not include all disclosures required by
generally accepted accounting principles for annual financial statements. It
is suggested that the accompanying consolidated financial statements be read
in conjunction with the annual financial statements included in the Company's
1996 Form 10-K for the period ended December 29, 1996. In the opinion of
management of the Company, the financial statements reflect all adjustments
(all of which were of a normal recurring nature) necessary to present fairly
the financial position of the Company and the results of operations and cash
flows for the interim periods.
6
<PAGE>
NEW YORK BAGEL ENTERPRISES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(3) INCOME TAXES
Prior to the Company's initial public offering, the Company operated as
an S corporation, and accordingly income tax expense or benefit was not
recorded in the accompanying financial statements for the thirteen-week
period ended March 31, 1996 as the Company's results of operations were
reported to the Company's stockholders for inclusion in their individual
income tax returns. Effective August 26, 1996 (Termination Date) and in
connection with the initial public offering, the Company terminated it's S
corporation status. Income tax expense has been provided for all periods
subsequent to August 26, 1996.
(4) EARNINGS PER SHARE
Earnings per share for the thirteen weeks ended March 31, 1996 is
calculated based on net earnings less pro forma income tax expense. Pro
forma income tax expense ($104,159 for the thirteen-week period ended March
31, 1996) reflects what income tax expense would have been if the Company had
not operated as an S corporation during such period.
Weighted average common shares outstanding have been determined as
follows:
Thirteen Weeks
Ended
March 30, March 31,
1997 1996
--------- ---------
Weighted average common shares outstanding 4,667,500 2,785,692
Shares issued during 12-month period prior to initial
filing of the registration statement at price per share
below initial public offering price -- 14,308
Pro forma number of shares which proceeds would be
sufficient (based upon the net initial public offering
price) to replace the excess of distributions to
stockholders over net earnings for the year ended
December 31 1995 -- 218,538
--------- ---------
4,667,500 3,018,538
--------- ---------
--------- ---------
7
<PAGE>
(5) ACQUISITIONS
Effective December 6, 1996, the Company purchased substantially all of
the operating assets and business operations and assumed certain liabilities
of Lots A' Bagels, Inc. for an initial cash payment of $2,100,000. In
addition, certain contingent consideration, potentially comprised of
promissory notes, additional cash and issuance of a warrant to purchase the
Company's common stock, may be paid as additional purchase price based on
Lots A' Bagels, Inc.'s earnings (as defined in the purchase agreement) for
the period July 1, 1996 through March 30, 1997. The acquisition was
accounted for by the purchase method of accounting in December 1996. The
additional purchase price to be paid as a result of the aforementioned
earn-out is anticipated to be determined in May 1997 and recorded as
additional goodwill at that time. Accordingly, the contingent purchase price
is not reflected in the accompanying March 30, 1997 consolidated financial
statements.
Effective February 28, 1997, the Company purchased substantially all of
the operating assets and business operations of Bagel Buds, Inc. for
$415,000. The acquisition has been accounted for by the purchase method of
accounting and, accordingly, the operations of Bagel Buds, Inc. have been
included in the accompanying statements of operations subsequent to February
28, 1997. The initial purchase price has been allocated to the assets
acquired based on their estimated fair values at date of acquisition.
Goodwill as of March 30, 1997 arising from the acquisition amounted to
$220,000. The effect on revenues, net earnings and earnings per share for
the thirteen weeks ended March 30, 1997 is not material. Pro forma
disclosures have been omitted due to immateriality.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS REPORT ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY,
INCLUDING, WITHOUT LIMITATION, RISKS ASSOCIATED WITH THE COMPANY'S ABILITY TO
SUCCESSFULLY AND TIMELY INTEGRATE THE LOTS A' BAGELS RESTAURANTS AND BAGEL
COMMISSARY AND CERTAIN ACQUIRED FRANCHISED RESTAURANTS, THE COMPANY'S ABILITY
TO DEVELOP, CONSTRUCT, ACQUIRE OR FRANCHISE ADDITIONAL RESTAURANTS IN
ACCORDANCE WITH THE COMPANY'S DEVELOPMENT SCHEDULE, MANAGEMENT OF QUARTER TO
QUARTER EARNINGS AND INCREASES IN OPERATING COSTS. THESE RISKS ARE SET FORTH
IN THE "RISK FACTORS" SECTION OF THE COMPANY'S FORM 10-K REPORT FOR THE YEAR
ENDED DECEMBER 29, 1996. UPDATED INFORMATION WILL BE PERIODICALLY PROVIDED BY
THE COMPANY AS REQUIRED BY THE SECURITIES EXCHANGE ACT OF 1934.
OVERVIEW
The Company opened its first restaurant in 1986, and has developed, as
of March 30, 1997, 24 of its 36 Company-owned restaurants in Oklahoma,
Kansas, Tennessee, Texas and Missouri. In addition to developing new
restaurants, the Company has acquired one bagel restaurant in Tennessee,
seven Lots A' Bagels restaurants in Colorado and four franchised New York
Bagel restaurants in Kansas, New Mexico and Texas The Company commenced
franchising the New York Bagel concept in 1993 and at March 30, 1997 has 19
franchisees operating 32 restaurants.
The Company's revenues are derived from sales from Company-owned
restaurants and franchise revenues, which consist of royalties from
franchised restaurant sales as well as franchise and development fees.
Cost of sales include food, paper and beverage costs associated with
Company-owned restaurants. Restaurant operating expenses consist primarily of
labor costs, rent, advertising, utilities, maintenance and insurance
associated with Company-owned restaurants. General and administrative
expenses include corporate and administrative salaries, accounting, legal and
direct costs associated with franchise operations.
9
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of certain
operating statement data to total revenues, except as otherwise indicated:
Thirteen Weeks
Ended
March 30, March 31,
1997 1996
--------- ---------
Revenues:
Sales from Company-owned restaurants 95.9% 92.9%
Franchise revenues 4.1 7.1
------ ------
Total revenues 100.0% 100.0%
Costs and expenses:
Costs of sales (1) 31.8% 36.6%
Restaurant operating expenses (1) 49.0 43.2
General and administrative expenses 8.3 8.7
Depreciation and amortization 6.3 3.0
Operating income 8.0 14.1
Interest income (expense), net 1.4 (3.2)
Income tax expense 3.6 4.4 (2)
Net earnings 5.8 6.5 (2)
- --------------------
(1) As a percentage of sales from Company-owned restaurants.
(2) Includes pro forma income tax expense.
THIRTEEN WEEKS ENDED MARCH 30, 1997
COMPARED TO THIRTEEN WEEKS ENDED MARCH 31, 1996
Total revenues increased by $2.1 million, or 87.3%, to $4.5 million for
the period ended March 30, 1997 compared to $2.4 million for the period ended
March 31, 1996, primarily due to an increase in the number of Company-owned
restaurants open.
Sales from Company-owned restaurants increased $2.1 million, or 93.3%,
to $4.3 million for the period ended March 30, 1997 compared to $2.2 million
for the period ended March 31, 1996. This increase is largely the result of
opening nine additional Company-owned restaurants and the acquisition of ten
bagel restaurants during the period subsequent to March 31, 1996. At March
30, 1997, the Company had 36 Company-owned restaurants compared to 17
restaurants at March 31, 1996.
10
<PAGE>
Franchise revenues increased by $16,000, or 9.3%, to $185,000 for the
period ended March 30, 1997 compared to $169,000 for the period ended March
31, 1996. The increase in franchise revenues is due to the recognition of a
$45,000 fee related to an area licensing agreement offset, to a certain extent,
by a decrease in initial franchise fees and royalty revenues of $24,000 and
$5,000, respectively. The decrease in initial franchise fees is due to the
opening of only two franchise restaurants during the period ended March 30,
1997 compared to the recognition of initial fees related to six franchise
restaurants for the period ended March 31, 1996. The decrease in royalty
revenues is due to the discontinuance of royalty revenue recognition on
certain franchise restaurants due to collectibility concerns. At March 30,
1997, there were 32 franchised restaurants compared to 27 restaurants at
March 31, 1996.
Costs of sales increased by $551,000, or 67.7%, to $1.4 million for the
period ended March 30, 1997 compared to $813,000 for the period ended March
31, 1996, primarily due to the increase in Company-owned restaurant sales
discussed above. As a percentage of Company-owned restaurant sales, costs of
sales decreased to 31.8% for the period ended March 30, 1997 from 36.6% for
the period ended March 31, 1996, primarily as a result of purchasing and
operating efficiencies experienced in 1997, and, to a lesser extent, modest
price increases taken during late 1996. Prices of the Company's commodities
(meat and cheese, flour and other bakery ingredients) have generally remained
fairly stable during the comparable periods.
Restaurant operating expenses increased by $1.1 million, or 118.9%, to
$2.1 million for the period ended March 30, 1997 compared to $960,000 for the
period ended March 31, 1996, primarily due to the increase in Company-owned
restaurant sales discussed above. As a percentage of Company-owned
restaurant sales, restaurant operating expenses increased to 49.0% for the
period ended March 30, 1997 from 43.2% for the period ended March 31, 1996.
Such increase is primarily due to: (i) the acquisition of Lots A' Bagels,
Inc.; (ii) increased occupancy costs; and (iii) national advertising
contribution. The seven Lots A' Bagels restaurants in Colorado Springs,
Colorado experience greater restaurant operating expenses than Company-owned
New York Bagel restaurants primarily due to higher labor and occupancy costs,
and increased direct advertising costs. As Lots A' Bagels, Inc. was acquired
in December 1996, such traditionally higher restaurant operating expenses are
not reflected in the period ended March 31, 1996. Occupancy costs, as a
percent of sales from Company-owned restaurants, have increased due to the
leasing of new restaurant sites in new markets in which sales volumes have
not yet matured. The New York Bagel National Advertising Fund was created in
April 1996 at which time the Company began contributing 0.5% of sales from
Company-owned restaurants as advertising expense.
General and administrative expenses increased by $163,000, or 78.3%, to
$370,000 for the period ended March 30, 1997 compared to $207,000 for the
period ended March 31, 1996. This increase is primarily attributable to the
growth in Company-owned restaurants. As a percentage of total revenues,
general and administrative expenses decreased to 8.3% for the period ended
March 30, 1997 from 8.7% for the period ended March 31, 1996. The decrease
as a percentage of total revenues was primarily due to increased economies of
scale resulting from Company infrastructure implemented in 1996.
11
<PAGE>
Depreciation and amortization increased by $209,000 or 294.5%, to
$280,000 for the period ended March 30, 1997 compared to $71,000 for the
period ended March 31, 1996. As a percentage of total revenues, depreciation
and amortization increased to 6.3% for the period ended March 30, 1997 from
3.0% for the period ended March 31, 1996. This increase is primarily the
result of higher depreciation and amortization associated with the
significant addition of capital expenditures to develop and acquire
additional Company-owned restaurants for the period subsequent to March 31,
1996. Included in depreciation and amortization is $89,000 and $4,000 for
the thirteen weeks ended March 30, 1997 and March 31, 1996, respectively,
related to amortization of pre-opening costs.
Net interest income increased by $138,000 to $61,000 for the period
ended March 30, 1997 compared to net interest expense of $77,000 for the
period ended March 31, 1996. This increase in net interest income is the
result of interest income earned during 1997 from the remaining net proceeds
of the Company's initial public offering. In addition, virtually all
existing debt was retired with these proceeds.
NEW ACCOUNTING STANDARD
The Financial Accounting Standards Board has issued SFAS No. 128,
EARNINGS PER SHARE ("Statement 128") which replaces the current accounting
standard regarding computation of earnings per share. Statement 128
requires a dual presentation of basic earnings per share (based on the
weighted average number of common shares outstanding) and diluted earnings
per share which reflects the potential dilution that could occur if contracts
to issue securities (such as stock options) were exercised. Statement 128 is
effective for financial statements issued for periods ending after December
15, 1997. The Company believes that adoption of Statement 128 will not have
a material effect on the earnings per share amounts for the periods ended
March 30, 1997 and March 31, 1996 as presented in the accompanying unaudited
consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital primarily for the development of new
restaurants, possible acquisitions and the remodeling of existing
Company-owned restaurants. Capital expenditures totaled $1.9 million and
$466,000 for the periods ended March 30, 1997 and March 31, 1996,
respectively. The Company funds its capital expenditures with proceeds from
its initial public offering and cash flows from operating activities. Cash
flows from operating activities were $322,000 and $409,000 for the periods
ended March 30, 1997 and March 31, 1996, respectively.
Effective August 27, 1996 the Company completed the initial public
offering of its common stock in which it sold 1,867,500 shares of its Class A
common stock and received net proceeds of $14.7 million. Approximately $4.5
million of the net proceeds were used to retire all outstanding bank
indebtedness. In addition, the Company distributed $156,000 on March 4, 1997
to the stockholders existing prior to its initial public offering in
connection with their estimated federal and state income tax obligations
attributable to the Company's 1996 earnings prior to the Termination Date.
Based on its contemplated expansion plans, the Company estimates that
its remaining capital expenditures will be approximately $3.0 million in
1997. This estimate includes the estimated costs of developing and acquiring
new Company-owned restaurants. The Company expects that the net proceeds of
the initial public offering and cash provided by operating activities will
provide sufficient funds to finance its capital expenditures through 1997.
FINANCIAL CONDITION
As of March 30, 1997, total assets are consistent with total assets as
of December 29, 1996. Investment securities available for sale have
decreased $1.7 million and property, plant and equipment and goodwill
combined have increased $1.7 million as the Company continues to utilize
proceeds from its initial public offering to develop and acquire
Company-owned restaurants.
12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule.
(b) Report on Form 8-K/A. An amendment to the current report filed
with respect to the acquisition of Lots A' Bagels, Inc. was filed
on February 18, 1997.
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, this 14th day of May, 1997.
NEW YORK BAGEL ENTERPRISES, INC.
By: /s/ ROBERT J. GERESI
--------------------------------------
Robert J. Geresi
Chief Executive Officer
and President
By: /s/ JON H. CRAMER
--------------------------------------
Jon H. Cramer
Chief Financial Officer,
Secretary and Treasurer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET AND STATEMENT OF OPERATIONS AS OF AND FOR THE THIRTEEN-
WEEK PERIOD ENDED MARCH 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1997
<PERIOD-START> DEC-30-1996
<PERIOD-END> MAR-30-1997
<CASH> 1,303,939
<SECURITIES> 2,518,709
<RECEIVABLES> 497,612
<ALLOWANCES> (32,700)
<INVENTORY> 283,358
<CURRENT-ASSETS> 4,878,903
<PP&E> 10,145,917
<DEPRECIATION> (1,068,690)
<TOTAL-ASSETS> 15,215,575
<CURRENT-LIABILITIES> 1,083,969
<BONDS> 57,500
0
0
<COMMON> 46,675
<OTHER-SE> 13,887,213
<TOTAL-LIABILITY-AND-EQUITY> 15,215,575
<SALES> 4,289,602
<TOTAL-REVENUES> 4,474,649
<CGS> 1,363,774
<TOTAL-COSTS> 4,114,555
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,500
<INTEREST-EXPENSE> (60,642)
<INCOME-PRETAX> 420,736
<INCOME-TAX> 161,681
<INCOME-CONTINUING> 259,055
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 259,055
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
