<PAGE> 1
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U.S. 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 Thirteen Weeks Ended October 25, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-28930
ROADHOUSE GRILL, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 65-0367604
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6600 NORTH ANDREWS AVENUE, SUITE 160, FT. LAUDERDALE, FLORIDA 33309
(Address of principal executive offices and zip code)
Registrant's telephone number (954) 489-9699
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
The number of shares of the registrant's common stock outstanding as of
December 3, 1998 was 9,708,741.
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ROADHOUSE GRILL, INC.
FORM 10-Q
THIRTEEN WEEKS ENDED OCTOBER 25, 1998
INDEX
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
ITEM 1. CONDENSED FINANCIAL STATEMENTS:
Condensed Balance Sheets as of October 25, 1998 (unaudited)
and April 26, 1998............................................................... 2
Condensed Statements of Operations for the Thirteen Weeks and
Twenty-Six Weeks Ended October 25, 1998 and October 26, 1997
(unaudited)....................................................................... 3
Condensed Statement of Changes in Shareholders' Equity
for the Twenty-Six Weeks Ended October 25, 1998 (unaudited) ..................... 4
Condensed Statements of Cash Flows for the Twenty-Six Weeks Ended
October 25, 1998 and October 26, 1997 (unaudited) ................................ 5
Notes to Condensed Financial Statements............................................... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS......................................................... 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS..................................................................... 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................................................... 15
SIGNATURES ...................................................................................... 16
EXHIBIT INDEX ...................................................................................... 17
</TABLE>
1
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PART I
ITEM 1. FINANCIAL STATEMENTS
ROADHOUSE GRILL, INC.
CONDENSED BALANCE SHEETS
October 25, 1998 and April 26, 1998
($ in thousands, except per share data)
<TABLE>
<CAPTION>
October 25, April 26,
1998 1998
-------------------- ------------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents........................................... $ 4,038 $ 3,555
Accounts receivable................................................. 352 242
Inventory........................................................... 1,016 939
Due from related party.............................................. -- 1,000
Current portion of note receivable.................................. 55 183
Pre-opening costs, net.............................................. 618 967
Deferred tax assets, net............................................ 421 421
Prepaid expenses.................................................... 1,685 542
-------------------- ------------------
Total current assets............................................. 8,185 7,849
Note receivable....................................................... 167 112
Property & equipment, net............................................. 68,252 66,898
Intangible assets, net of accumulated amortization of $153
and $121 at October 25, 1998 and April 26, 1998,
respectively........................................................ 2,105 615
Other assets.......................................................... 3,308 4,023
Investment in and advances to affiliates.............................. -- 612
-------------------- ------------------
Total assets.................................................... $ 82,017 $ 80,109
==================== ==================
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable.................................................... $ 3,576 $ 4,858
Accrued expenses.................................................... 5,334 5,460
Due to related parties.............................................. -- 1,500
Current portion of long-term debt................................... 717 688
Current portion of capitalized lease obligations.................... 1,395 1,207
-------------------- ------------------
Total current liabilities 11,022 13,713
Long-term debt........................................................ 16,542 16,907
Capitalized lease obligations......................................... 7,619 6,335
-------------------- ------------------
Total liabilities................................................ 35,183 36,955
Shareholders' equity:
Common stock $.03 par value. Authorized 30,000,000 shares;
issued and outstanding 9,708,741 and 9,305,408 shares as of
October 25, 1998 and April 26, 1998, respectively................... 291 279
Additional paid-in-capital............................................ 50,039 48,536
Accumulated deficit................................................... (3,496) (5,661)
-------------------- ------------------
Total shareholders' equity...................................... 46,834 43,154
Commitments and contingencies (Note 2)................................ -- --
-------------------- ------------------
Total liabilities and shareholders' equity...................... $ 82,017 $ 80,109
==================== ==================
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE> 4
ROADHOUSE GRILL, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the thirteen weeks and twenty-six weeks ended October 25, 1998 and
October 26, 1997 ($ in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
---------------------------------- -----------------------------------
October 25, October 26, October 25, October 26,
1998 1997 1998 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Total revenue......................... $ 28,181 $ 22,866 $ 57,221 $ 45,950
Cost of restaurant sales:
Food and beverage.................. 9,431 7,766 19,039 15,462
Labor and benefits................. 8,058 6,833 16,291 13,842
Occupancy and other................ 5,316 4,510 11,137 8,932
Pre-opening amortization........... 367 500 730 1,054
------------------- ------------------ ------------------ ------------------
Total cost of restaurant sales..... 23,172 19,609 47,197 39,290
Depreciation and amortization......... 1,839 1,384 3,556 2,595
General and administrative expenses... 1,698 1,324 3,329 3,407
------------------- ------------------ ------------------ ------------------
Total operating expenses........... 26,709 22,317 54,082 45,292
------------------- ------------------ ------------------ ------------------
Operating income................... 1,472 549 3,139 658
Other income (expense):
Interest expense, net.............. (585) (536) (1,082) (864)
Equity in net income (loss) of
affiliates......................... (35) 7 (3) 33
Other, net......................... 102 99 195 188
------------------- ------------------ ------------------ ------------------
Total other (expense)......... (518) (430) (890) (643)
------------------- ------------------ ------------------ ------------------
Pretax income................. 954 119 2,249 15
Income tax............................ 50 50 84 92
------------------- ------------------ ------------------ ------------------
Net income (loss)............. $ 904 $ 69 $ 2,165 $ (77)
=================== ================== ================== ==================
Basic net income (loss) per common
share............................ $ 0.10 $ 0.01 $ 0.23 $ (0.01)
=================== ================== ================== ==================
Diluted net income (loss) per common
share............................ $ 0.10 $ 0.01 $ 0.23 $ (0.01)
=================== ================== ================== ==================
Weighted-average common shares
outstanding...................... 9,423,027 9,305,408 9,365,719 9,305,408
=================== ================== ================== ==================
Weighted-average common shares and
share equivalents outstanding -
assuming dilution................ 9,486,874 9,305,879 9,507,768 9,305,408
=================== ================== ================== ==================
</TABLE>
See accompanying notes to condensed financial statements.
3
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ROADHOUSE GRILL, INC.
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the twenty-six weeks ended October 25, 1998
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
-------------------- Paid-in- Accumulated
Shares Amount Capital Deficit Total
--------- ------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Balance April 26, 1998 9,305,408 $279 $48,536 $(5,661) $ 43,154
Stock Options Exercised 3,333 -- 15 -- 15
Conversion of Debt to Equity 400,000 12 1,488 -- 1,500
Net income -- -- -- 2,165 2,165
--------- ---- ------- ------- ---------
Balance October 25, 1998 9,708,741 $291 $50,039 $(3,496) $ 46,834
========= ==== ======= ======== =========
</TABLE>
See accompanying notes to condensed financial statements.
4
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ROADHOUSE GRILL, INC.
CONDENSED STATEMENTS OF CASH FLOWS
For the twenty-six weeks ended October 25, 1998 and October 26, 1997
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
October 25, October 26,
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income .................................................................. $ 2,165 $ (77)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.............................................. 4,286 3,649
Noncash compensation expense............................................... -- 81
Equity in net (income) loss of affiliate................................... 3 (33)
Changes in assets and liabilities:
(Increase) in accounts receivable........................................ (110) (238)
(Increase) in inventory.................................................. (43) (56)
(Increase) in pre-opening costs.......................................... (381) (864)
(Increase) in prepaid expense............................................ (1,083) (86)
Decrease (increase) in other assets...................................... 246 (371)
(Decrease) in accounts payable........................................... (1,282) (833)
(Decrease) increase in accrued expenses.................................. (131) 2,284
---------- ----------
Net cash provided by operating activities.............................. 3,670 3,456
Cash flows from investing activities
Dividends received from affiliate............................................ 93 --
Advances to affiliates, net.................................................. 9 (49)
Payments for intangibles..................................................... (20) (19)
Acquisition of restaurant, net of cash acquired.............................. (1,359) --
Proceeds from payment on note receivable from affiliate...................... 1,000 --
Proceeds from payment on notes receivable.................................... 72 37
Proceeds from sale-leaseback transaction..................................... 861 4,503
Purchase of property and equipment........................................... (2,946) (7,198)
---------- ----------
Net cash used in investing activities.................................. (2,290) (2,726)
Cash flows from financing activities
Decrease in cash overdraft................................................... -- (3,013)
Issuance of common stock..................................................... 15 --
Proceeds from long-term debt................................................. -- 15,000
Repayments of long-term debt................................................. (336) (7,657)
Payments on capital lease obligations........................................ (576) (603)
---------- ----------
Net cash provided by (used in) financing activities.................... (897) 3,727
Increase in cash and cash equivalents........................................... 483 4,457
Cash and cash equivalents at beginning of period................................ 3,555 1,587
---------- ----------
Cash and cash equivalents at end of period...................................... $ 4,038 $ 6,044
========== ==========
Supplementary disclosures:
Interest paid................................................................ $ 1,275 $ 1,150
========== ==========
Income taxes paid............................................................ $ 1,155 $ 131
========== ==========
</TABLE>
During the twenty-six weeks ended October 25, 1998, the Company issued
400,000 shares of common stock to Berjaya Cayman. The transaction was
consumated pursuant to approval by the Board of Directors to convert $1.5
million of debt outstanding into common stock at a price of $3.75 per share.
During the twenty-six weeks ended October 25, 1998, the Company entered into
a capital lease transaction for real estate in the amount of $1.2 million.
See accompanying notes to condensed financial statements.
5
<PAGE> 7
ROADHOUSE GRILL, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements of Roadhouse Grill, Inc. (the "Company") for the
thirteen weeks and twenty-six weeks ended October 25, 1998 and October 26, 1997,
are unaudited and reflect all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial statements for the interim periods. The financial
statements should be read in conjunction with the notes to condensed financial
statements, included herein, together with management's discussion and analysis
of financial condition and results of operations, contained in the Company's
Annual Report on Form 10-K for the seventeen weeks ended April 26, 1998 (the
"transition period").
The Company operates on a fifty-two or fifty-three week fiscal year. Each
fiscal quarter consists of thirteen weeks, except in the case of a fifty-three
week year, the fourth fiscal quarter consists of fourteen weeks.
On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to coincide with that of the majority shareholder,
Berjaya Group (Cayman) Limited ("Berjaya Cayman"). The new fiscal year ends on
the last Sunday in April. The Company filed a form 10-K for the transition
period which was from December 29, 1997 through April 26, 1998. This Form 10-Q
is for the second quarter of fiscal year 1999 (July 27, 1998 through October
25, 1998). All previous year amounts have been recast to the new fiscal
quarters.
The results of operations for the thirteen weeks and twenty-six weeks
ended October 25, 1998 are not necessarily indicative of the results for the
entire fiscal year ending April 25, 1999.
Certain prior year balances have been reclassified to conform to the
current year presentation.
2. COMMITMENTS AND CONTINGENCIES
The Company is a party to legal proceedings arising in the ordinary course
of business, many of which are covered by insurance. In the opinion of
management, disposition of these matters will not materially affect the
Company's financial condition.
During the thirteen weeks ended July 26, 1998, the Company completed
construction and opened three new Company-owned restaurants. No new restaurants
were opened during the thirteen weeks ended October 25, 1998. As of October 25,
1998, construction was underway on seven sites which are expected to open
during the third and fourth quarters of fiscal year 1999. In addition, as of
October 25, 1998, the Company had contracted to purchase or lease two sites and
had letters of intent on nine sites.
3. ACQUISITIONS
In August 1996, the Company entered into an agreement to purchase the
remaining 50 percent interest in the Kendall Roadhouse Grill, L.C., a limited
liability company, that owned the Kendall Joint Venture from the joint venture
partners for a purchase price of $2.3 million. The purchase price was to be paid
from the proceeds of the Initial Public Offering completed by the Company in
December 1996 in which 2,500,000 shares were sold at $6.00 per share. During the
first quarter of 1997, the agreement was amended as follows: the purchase price
was changed to $1.8 million with a deposit of $400,000 paid in January 1997, and
the remaining $1.4 million payable by December 31, 1997 when the acquisition was
expected to be closed and consummated. The purchase price was negotiated further
and on August 14, 1998, the Company purchased the remaining 50 percent interest
in the Kendall Joint Venture for a purchase price of $1.6 million.
The Company accounted for this transaction using the purchase method of
accounting. The purchase price was allocated based on the fair value of the
assets acquired at the time of acquisition. Approximately $716,000 was allocated
to property and equipment and approximately $53,000 allocated to inventory and
other assets. In connection with the acquisition, the Company also assumed
certain liabilities in the amount of $12,000. Prior to the purchase, the Company
had recorded its investment in the Kendall Joint Venture using the equity
method. This resulted in an investment in affiliate balance amounting to
approximately $273,000. In addition, the Company had recorded accounts
receivable of approximately $232,000. These amounts were eliminated in
connection with the purchase of the Kendall Joint Venture. The excess of the
purchase price over the net assets acquired was recorded as goodwill and will be
amortized over 16 years. Subsequent to the purchase, Kendall Roadhouse Grill
L.C. ceased to exist as a legal entity.
6
<PAGE> 8
The Company's unaudited pro forma results of operations assuming the above
acquisition had taken place on April 27, 1997 are as follows:
Twenty-six weeks Twenty-six weeks
ended October 25, 1998 ended October 26, 1997
---------------------- ----------------------
($ in thousands, except per share data)
Revenue $57,689 $46,755
Net income 2,169 16,139
Basic EPS $ 0.23 $ 0.00
Diluted EPS $ 0.23 $ 0.00
4. ADOPTION OF NEW ACCOUNTING STANDARDS
In April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 defines start-up activities broadly (including
organizational costs) and requires that the cost of start-up activities be
expensed as incurred. SOP 98-5 amends provisions of a number of existing SOP's
and audit and accounting guides. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. The Company's current accounting policy is
to capitalize pre-opening costs and amortize them over a one-year period. The
effect of initially applying the provisions of SOP 98-5 will be reported as a
change in accounting principle at the beginning of the period of adoption and
thereafter all such costs will be expensed as incurred. Amounts capitalized as
pre-opening costs as of October 25, 1998 were $618,000.
5. CONVERSION OF LONG-TERM DEBT INTO SHARES OF COMMON STOCK
On February 6, 1998, the Company's Board of Directors approved the
issuance of 400,000 shares of Common Stock to Berjaya Cayman, the majority
shareholder of the Company, to convert $1.5 million of debt outstanding to
common equity at a price of $3.75 per share, based on the closing market price
as of February 6, 1998. The debt carried an interest rate of 8.5% and was
scheduled to be repaid during the first quarter of 1998. The transaction was
consummated on September 30, 1998.
6. LEASES
Pursuant to a $16.5 million funding commitment received from CNL Group,
Inc., the Company entered into sale-leaseback transactions for new Roadhouse
Grill restaurants in Pensacola, Florida during the first quarter of fiscal 1999
and Jacksonville, Florida during the second quarter of fiscal 1999. The
resulting lease terms are 13 years with a 9.9% and a 9.5% rental factor for the
Pensacola and Jacksonville restaurants, respectively. These transactions were
recorded as financing-type leases with no deferred gain.
Pursuant to a $20.0 million funding commitment received from Franchise
Finance Corporation of America ("FFCA"), the Company entered into a lease for a
new Roadhouse Grill restaurant in Panama City, Florida. The resulting lease
terms are 14 years with a 9.5% rental factor.
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<PAGE> 9
7. NET INCOME (LOSS) PER COMMON SHARE ("EPS")
The calculation of Basic EPS excludes all dilution and is based upon the
weighted-average number of common shares outstanding during the year. Diluted
EPS reflects the potential dilution that would occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
The following is a reconciliation of the numerators (net income) and the
denominators (common shares outstanding) of the basic and diluted per share
computations for net income:
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
October 25, 1998 October 25, 1998
---------------------------------- -----------------------------------
Net Income Shares Amount Net Income Shares Amount
---------- ------ ------ ---------- ------ ------
($ in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
BASIC EPS
Net income available
to common shareholders $904 9,423,027 $0.10 $2,165 9,365,719 $0.23
EFFECT OF DILUTIVE SECURITIES
Stock options -- 42,777 -- -- 76,884 --
Convertible debt -- 21,070 -- -- 65,165 --
DILUTED EPS $904 9,486,874 $0.10 $2,165 9,507,768 $0.23
==== ========= ===== ====== ========= =====
</TABLE>
Options to purchase 268,642 shares of common stock at a weighted-average
exercise price of $6.70 per share were outstanding during the thirteen weeks
and twenty-six weeks ended October 25, 1998, but were not included in the
computation of diluted EPS because the options' exercise price was greater
than the average market price of the common shares. The options, which expire
on varying dates, were still outstanding as of October 25, 1998.
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks
October 26, 1997 October 26, 1997
---------------------------------- -----------------------------------
Net Income Shares Amount Net Income Shares Amount
---------- ------ ------ ---------- ------ ------
($ in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
BASIC EPS
Net income available
to common shareholders $69 9,305,408 $0.01 $(77) 9,305,408 $(0.01)
EFFECT OF DILUTIVE SECURITIES
Stock options -- 471 -- -- -- --
DILUTED EPS $69 9,305,879 $0.01 $(77) 9,305,408 $(0.01)
=== ========= ===== ==== ========= ======
</TABLE>
Options to purchase 702,965 shares of common stock at a weighted-average
exercise price of $6.67 per share were outstanding during the thirteen weeks
ended October 26, 1997, but were not included in the computation of diluted EPS
because the options' exercise price was greater than the average market price
of the common shares. The options, which expire on varying dates, were still
outstanding as of October 26, 1997.
Options to purchase 702,965 shares of common stock at a weighted-average
exercise price of $6.67 per share were outstanding during the twenty-six weeks
ended October 26, 1997, but were not included in the computation of diluted EPS
because the Company recognized a net loss during the twenty-six week period,
and including such options would result in anti-dilutive EPS. The options,
which expire on varying dates, were still outstanding as of October 26, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with
the condensed financial statements and notes thereto, included elsewhere in
this Form 10-Q.
Roadhouse Grill, Inc. currently owns and operates 47 full-service, casual
dining restaurants under the name "Roadhouse Grill", (including Kendall
Roadhouse Grill for which the Company purchased the remaining equity interest
outstanding during August 1998). In addition, Roadhouse Grill, Inc. licenses one
and franchises four full-service casual dining restaurants. The Company was
incorporated in October 1992 and opened the first Company-owned restaurant in
Pembroke Pines, Florida in March of 1993. Since then, the Company has opened 46
additional restaurants in 11 states. Two franchised locations are located in
Kuala Lumpur, capital city of Malaysia, and two domestic franchises are located
in Las Vegas, Nevada.
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<PAGE> 10
In May 1997, the Company entered into a licensing agreement with Sunshine
Roadhouse Group, Inc. for the licensing of the North Palm Beach, Florida
restaurant.
On December 11, 1997, the Company's Board of Directors voted to change the
Company's fiscal year to the last Sunday in April to coincide with that of the
majority shareholder, Berjaya Cayman.
The Company's revenues are derived primarily from the sale of food and
beverages. Sales of alcoholic beverages accounted for approximately 10.4% and
10.5% of total revenues for the thirteen weeks and twenty-six weeks ended
October 25, 1998, respectively. Franchise and management fees have accounted
for less than 1% of the Company's total revenues for all periods since its
inception.
The Company's new restaurants can be expected to incur above-average costs
during the first few months of operation. Pre-opening costs, such as employee
recruiting and training costs and other initial expenses incurred in connection
with the opening of a new restaurant, are amortized over a twelve-month period
commencing with the first full accounting period after the restaurant opens. No
new restaurants were opened during the thirteen weeks ended October 25, 1998.
The average real estate acquisition cost for the 13 restaurant sites owned
by the Company was approximately $911,000. The Company has obtained financing
in connection with the acquisition of its owned properties, which financing
generally has required a down payment of 10% of the purchase price. The average
annual occupancy cost for the restaurant sites leased by the Company is
approximately $102,000 per site. The Company expects that the average cash
investment required to open its prototype restaurants, including pre-opening
expenses but excluding real estate costs, will be between $1.1 million and $1.6
million, depending upon whether the Company converts an existing building or
constructs a new restaurant.
9
<PAGE> 11
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain selected
statements of operations data expressed as a percentage of total revenues.
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-six Weeks Ended
------------------------------------ --------------------------------------
October 25, 1998 October 26, 1997 October 25, 1998 October 26, 1997
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Total revenues................................. 100.0% 100.0% 100.0% 100.0%
Cost of restaurant sales:
Food and beverage........................... 33.5 34.0 33.3 33.7
Labor and benefits.......................... 28.6 29.9 28.5 30.1
Occupancy and other......................... 18.9 19.7 19.5 19.4
Pre-opening amortization.................... 1.3 2.2 1.3 2.3
----- ----- ----- -----
Total cost of restaurant sales 82.3 85.8 82.6 85.5
Depreciation and amortization.................. 6.5 6.1 6.2 5.7
General and administrative..................... 6.0 5.8 5.8 7.4
----- ----- ----- -----
Total operating expenses.................... 94.8 97.7 94.6 98.6
----- ----- ----- -----
Operating income ........................... 5.2 2.3 5.4 1.4
Other income (expense):
Interest expense, net....................... (2.1) (2.3) (1.9) (1.9)
Equity in net income (loss) of affiliates... (0.1) 0.0 0.0 0.1
Other, net ............................... 0.4 0.4 0.3 0.4
----- ----- ----- -----
Total other (expense)..................... (1.8) (1.9) (1.6) (1.4)
----- ----- ----- -----
Pretax income............................. 3.4 0.4 3.8 0.0
Income tax..................................... 0.2 0.2 0.2 0.2
----- ----- ----- -----
Net income (loss)......................... 3.2% 0.2% 3.6% (0.2)%
===== ===== ===== =====
</TABLE>
This Form 10-Q contains forward-looking statements, including statements
regarding, among other things (i) the Company's growth strategies, (ii)
anticipated trends in the economy and the restaurant industry and (iii) the
Company's future financing plans. In addition, when used in this Form 10-Q, the
words "believes," "anticipates," "expects" and similar words often are intended
to identify certain forward-looking statements. These forward-looking
statements are based largely on the Company's expectations and are subject to a
number of risks and uncertainties, many of which are beyond the Company's
control. Actual results could differ materially from these forward-looking
statements as a result of changes in trends in the economy and the restaurant
industry, reductions in the availability of financing, increases in interest
rates and other factors. In light of the foregoing, there is no assurance that
the forward-looking statements contained in this Form 10-Q will in fact prove
correct or occur. The Company does not undertake any obligation to revise these
forward-looking statements to reflect future events or circumstances.
THIRTEEN WEEKS ENDED OCTOBER 25, 1998 ("FISCAL YEAR 1999 SECOND QUARTER")
COMPARED TO THIRTEEN WEEKS ENDED OCTOBER 26, 1997 ("FISCAL YEAR 1998 SECOND
QUARTER")
RESTAURANTS OPEN. At October 25, 1998 there were 47 Company-owned
restaurants open, including the Kendall Roadhouse Grill restaurant which the
Company purchased the remaining equity interest outstanding during August
1998 ("Company-owned restaurants"). At October 26, 1997, there were 37
Company-owned restaurants, excluding the Kendall Joint Venture and the Boca
Roadhouse Grill, L.C., which were owned by limited liability companies in which
the Company held 50% ownership interest. (In December 1997, the Company sold
its ownership interest in Boca Roadhouse Grill, L.C.) This represents a 27%
increase in the number of Company-owned restaurants.
TOTAL REVENUES. Total revenues increased $5.3 million, or 23.2%, from
$22.9 million for the fiscal year 1998 second quarter to $28.2 million for the
fiscal year 1999 second quarter. This increase is primarily attributable to
sales generated at the nine new restaurants opened by the Company since the end
of fiscal year 1998 second quarter. To a lesser extent, sales also increased
due to an increase in comparable store sales of 2% for the 32 Company-owned
restaurants opened for 18 months or longer.
10
<PAGE> 12
FOOD AND BEVERAGE. Food and beverage costs as a percentage of sales
decreased by 0.5 percentage points to 33.5% for the fiscal year 1999 second
quarter from 34.0% for the fiscal year 1998 second quarter. This decrease is
primarily due to improved management of such costs in field operations as well
as corporate management and to recently developed food and bar cost models to
improve margins through reduced costs and improved operating efficiencies. In
addition, the Company expanded and regionalized the distribution network that
delivers products and supplies to the Company's restaurants, resulting in
better logistics and lower costs.
LABOR AND BENEFITS. Labor and benefits costs increased $1.2 million to
$8.0 million in the fiscal year 1999 second quarter, or 17.9%, from $6.8
million in the fiscal year 1998 second quarter. The increase is primarily due
to the operation of nine new restaurants opened since the end of the fiscal year
1998 second quarter. However, as a percentage of sales, labor and benefits
costs decreased by 1.3 percentage points to 28.6% for the fiscal year 1999
second quarter from 29.9% for the fiscal year 1998 second quarter. This
decrease is primarily due to the restructuring of the restaurant level
management team, improved productivity of the Company's in-store meat operation
and including hostesses as tipped employees eligible for the tip credit.
OCCUPANCY AND OTHER. Occupancy and other costs increased $806,000 to $5.3
million in the fiscal year 1999 second quarter, or 17.9%, from $4.5 million in
the fiscal 1998 second quarter. The increase is primarily due to the operation
of nine new restaurants opened since the end of the fiscal year 1998 second
quarter. However, as a percentage of sales, occupancy and other costs decreased
by 0.8 percentage points from 19.7% for the fiscal year 1998 second quarter to
18.9% for the fiscal year 1999 second quarter. This decrease is primarily due
to improved management of such costs, resulting in reductions in direct
operating costs, utilities and other costs of operating the restaurants. The
decrease is partially offset by the implementation and expenditures of a new
marketing and advertising campaign.
PRE-OPENING AMORTIZATION. Pre-opening amortization decreased $133,000 to
$367,000 in the fiscal year 1999 second quarter, or 26.6%, from $500,000 in the
fiscal year 1998 second quarter. The decrease is primarily due to lower
expenditures on pre-opening for new restaurants during fiscal year 1999 than was
expended on pre-opening for restaurants opened in fiscal year 1998.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
$455,000 to $1.8 million in the fiscal year 1999 second quarter, or 32.9%, from
$1.4 million in the fiscal year 1998 second quarter. The increase is primarily
due to the operation of nine new restaurants opened since the end of the fiscal
year 1998 second quarter. As a percentage of sales, depreciation and
amortization increased by 0.4 percentage points from 6.1% for the fiscal year
1998 second quarter to 6.5% for the fiscal year 1999 second quarter.
GENERAL AND ADMINISTRATIVE. General and administrative costs increased
$374,000 to $1.7 million in the fiscal year 1999 second quarter, or 28.2%, from
$1.3 million in the fiscal year 1998 second quarter. The increase is primarily
due to additional personnel hired and related moving and relocation costs. As a
percentage of sales, general and administrative costs increased 0.2 percentage
points from 5.8% for the fiscal year 1998 second quarter to 6.0% for the fiscal
year 1999 second quarter.
TOTAL OTHER INCOME (EXPENSE). Total other income (expense) increased
$88,000 in expense to $518,000 in the fiscal year 1999 second quarter, or
20.4%, from $430,000 in the fiscal year 1998 second quarter. The increase is
primarily due to additional interest expense on additional debt incurred due to
the development and opening of nine new restaurants since the end of the fiscal
year 1998 second quarter.
INCOME TAX. The Company has a valuation allowance that offsets a portion of
its net deferred tax assets. Each quarter measurement determines, based on
projections, the realizability of the related deferred tax assets in future
years and reduces the allowance to the extent year-to-date income is available
to realize the benefit of the deferred tax assets. The reduction of the
valuation allowance currently minimizes income tax expense. Income tax expense
of $50,000 in both the fiscal year 1999 second quarter and the fiscal year 1998
second quarter represent state income tax and alternative minimum tax.
TWENTY-SIX WEEKS ENDED OCTOBER 25, 1998 ("FISCAL YEAR 1999 FIRST HALF")
COMPARED TO TWENTY-SIX WEEKS ENDED OCTOBER 26, 1997 ("FISCAL YEAR 1998 FIRST
HALF")
TOTAL REVENUES. Total revenues increased $11.3 million, or 24.5%, from
$46.0 million for the fiscal year 1998 first half to $57.2 million for the
fiscal year 1999 first half. This increase is primarily attributable to sales
generated at the nine new restaurants opened by the Company since the end of
fiscal year 1998 first half and sales of four new restaurants that were only
open and operating part of fiscal year 1998 first half. To a lesser extent,
sales also increased due to an increase in comparable store sales of 1% for the
32 Company-owned restaurants opened for 18 months or longer.
FOOD AND BEVERAGE. Food and beverage costs as a percentage of sales
decreased by 0.4 percentage points to 33.3% for the fiscal year 1999 first half
from 33.7% for the fiscal year 1998 first half. This decrease was primarily due
to improved management of such costs in field operations as well as corporate
management, and to recently developed food and bar cost models to improve
margins through reduced costs and improved operating efficiencies. In addition,
the Company expanded and regionalized the distribution network that delivers
products and supplies to the Company's restaurants, resulting in better
logistics and lower costs.
11
<PAGE> 13
LABOR AND BENEFITS. Labor and benefits costs increased $2.4 million to
$16.3 million in the fiscal year 1999 first half, or 17.7%, from $13.8 million
in the fiscal year 1998 first half. The increase is primarily due to the
operation of nine new restaurants opened since the end of the fiscal 1998 first
half and four new restaurants that were only open and operating part of fiscal
year 1998 first half. However, as a percentage of sales, labor and benefits
costs decreased by 1.6 percentage points to 28.5% for the fiscal year 1999
first half from 30.1% for the fiscal year 1998 first half. This decrease was
primarily due to the restructuring of the restaurant level management team,
improved productivity of the Company's in-store meat operation and including
hostesses as tipped employees eligible for the tip credit.
OCCUPANCY AND OTHER. Occupancy and other costs increased $2.2 million to
$11.1 million in the fiscal year 1999 first half, or 24.7%, from $8.9 million in
the fiscal year 1998 first half. The increase is primarily due to the operation
of nine new restaurants opened since the end of the fiscal year 1998 first half
and four new restaurants that were only open and operating part of fiscal year
1998 first half. As a percentage of sales, occupancy and other costs increased
by 0.1 percentage points from 19.4% for the fiscal year 1998 first half to 19.5%
for the fiscal year 1999 first half.
PRE-OPENING AMORTIZATION. Pre-opening amortization decreased $324,000 to
$730,000 in the fiscal year 1999 first half, or 30.7%, from $1.1 million in the
fiscal year 1998 first half. The decrease is primarily due to lower expenditures
on pre-opening for new restaurants during fiscal year 1999 than was expended on
pre-opening for restaurants opened in fiscal year 1998.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
$961,000 to $3.6 million in the fiscal year 1999 first half, or 37.0%, from
$2.6 million in the fiscal year 1998 first half. The increase is primarily due
to the operation of nine new restaurants opened since the end of the fiscal
year 1998 first half and four new restaurants that were only open and operating
part of fiscal year 1998 first half. As a percentage of sales, depreciation and
amortization increased by 0.5 percentage points from 5.7% for the fiscal year
1998 first half to 6.2% for the fiscal year 1999 first half.
GENERAL AND ADMINISTRATIVE. General and administrative costs decreased
$78,000 to $3.3 million in the fiscal year 1999 first half, or 2.3%, from $3.4
million in the fiscal year 1998 first half. During the fiscal year 1998 first
half the Company incurred $430,000 for severance agreements due to the departure
of several key executives of the Company, including its President and Chief
Executive Officer. During the fiscal year 1999 first half, general and
administrative costs increased due to additional personnel hired and their
related moving and relocation costs. As a percentage of sales, general and
administrative costs decreased 1.6 percentage points from 7.4% for the fiscal
year 1998 first half to 5.8% for the fiscal year 1999 first half.
TOTAL OTHER INCOME (EXPENSE). Total other income (expense) increased
$247,000 in expense to $890,000 in the fiscal year 1999 first half, or 38.4%,
from $643,000 in the fiscal year 1998 first half. The increase is primarily due
to additional interest expense on additional debt incurred due to the
development and opening of nine new restaurants since the end of the fiscal
year 1998 second quarter.
INCOME TAX. The Company has a valuation allowance that offsets a portion of
its net deferred tax assets. Each quarter measurement determines, based on
projections, the realizability of the related deferred tax assets in future
years and reduces the allowance to the extent year-do-date income is available
to realize the benefit of the deferred tax assets. The reduction of the
valuation allowance currently minimizes income tax expense. Income tax expenses
of $84,000 and $92,000 in the fiscal year 1999 first half and the fiscal year
1998 first half respectively, represents state income tax and alternative
minimum tax.
ADOPTION OF NEW ACCOUNTING STANDARDS
In April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
("SOP 98-5"). SOP 98-5 defines start-up activities broadly (including
organizational costs) and requires that the cost of start-up activities be
expensed as incurred. SOP 98-5 amends provisions of a number of existing SOP's
and audit and accounting guides. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. The Company's current accounting policy is
to capitalize pre-opening costs and amortize them over a one-year period. The
effect of initially applying the provisions of SOP 98-5 will be reported as a
change in accounting principle at the beginning of the period of adoption and
thereafter all such costs will be expensed as incurred. Amounts capitalized as
pre-opening costs as of October 25, 1998 were $618,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital principally for the opening of new
restaurants and has financed its requirements through the private placement of
Common Stock, an Initial Public Offering, bank loans, leasing facilities and
loans from certain private parties, including present and former shareholders
of the Company.
During the fiscal year 1999 first quarter, the Company received financing
commitments of $36.5 million, which will be used for developing new restaurants.
These commitments of $16.5 million and $20.0 million were obtained from FFCA and
CNL Group, Inc., respectively. These commitments added substantial flexibility
to the current development plan allowing the Company to focus on development of
sites identified and on finding new sites for additional restaurants. There is
no guarantee that these additional financings will be completed. Pursuant to the
$16.5 million funding commitment received from CNL Group, Inc., the Company
entered into sale-leaseback transactions for new Roadhouse Grill restaurants in
Pensacola and Jacksonville, Florida.
12
<PAGE> 14
Pursuant to the $20 million funding commitment received from FFCA, the
Company entered into a lease agreement for a new Roadhouse Grill restaurant in
Panama City, Florida.
In June 1997 and July 1997, the Company entered into sale-leaseback
agreements with unaffiliated third parties for interior furniture, fixtures and
equipment located in 11 Company-owned restaurants. The Company received
proceeds of approximately $1.8 million and $2.3 million, respectively, net of
fees and other costs. These proceeds were used for expansion of the Company.
These transactions were recorded as financing-type leases and no deferred gain
was recognized.
The Company's capital expenditures aggregated approximately $2.9 million
for the twenty-six weeks ended October 25, 1998 and $7.2 million for the
twenty-six weeks ended October 26, 1997, substantially all of which were
used to open Roadhouse Grill restaurants.
At December 28, 1997, the Company owed Berjaya Cayman, its majority
shareholder $3 million under a promissory note dated September 27, 1996 bearing
interest at 8.5%. In January 1998, the Company paid $1.5 million of the
outstanding balance on this promissory note. On February 6, 1998, the Company's
Board of Directors approved the issuance of 400,000 shares of Common Stock to
Berjaya Cayman to convert the remaining debt outstanding of $1.5 million to
common equity at a price of $3.75 per share based on the closing market price
as of February 6, 1998. The transaction was consummated on September 30, 1998.
The Company anticipates that it may require additional debt or equity
financing in order to continue to open new restaurants. There can be no
guarantee or assurance financing will be available on terms acceptable to the
Company, if at all. In the event the Company is unable to secure additional
financing sufficient to support continued growth, the Company's operating and
financial plans would require revision.
As is common in the restaurant industry, the Company has generally
operated with negative working capital (negative $2.8 million as of October 25,
1998). The Company does not have significant receivables or inventory and
receives trade credit on its purchases of food and supplies.
SEASONALITY AND QUARTERLY RESULTS
The Company's sales and earnings fluctuate seasonally. On December 11,
1997, the Company's Board of Directors voted to change the Company's fiscal
year to coincide with that of the majority shareholder, Berjaya Cayman. With
the new fifty-two or fifty-three week fiscal year structure, the Company's
highest earnings are expected to occur in the third and fourth fiscal quarters.
The new fiscal year ends on the last Sunday in April and consists of four
thirteen week quarters (except in the case of a fifty-three week year in which
the fourth quarter consists of fourteen weeks) structured as follows:
o 1st Quarter - May, June, July
o 2nd Quarter - August, September, October
o 3rd Quarter - November, December, January
o 4th Quarter - February, March, April
13
<PAGE> 15
The following is a recast summary (unaudited) of the quarterly results of
operations for the fifty-two weeks ended April 26, 1998 and the fifty-two weeks
ended April 25, 1997 with the quarters structured according to the new fiscal
year:
<TABLE>
<CAPTION>
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Year
------- ------- ------- ------- ----------
($ in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
FIFTY-TWO WEEKS ENDED APRIL 25, 1998:
Total revenues $ 23,083 $ 22,866 $ 25,043 $ 29,202 $ 100,194
Income prior to unusual or infrequent items 107 550 1,194 1,954 3,805
(Loss) from impairment of assets(1) -- -- (1,120) -- (1,120)
Operating income(2) 107 549 74 1,954 2,684
Pretax income (loss)(3) (106) 119 (999) 1,555 569
Net income (loss) (148) 69 (1,073) 1,505 353
Basic net income (loss) per common share (0.02) 0.01 (0.12) 0.16 0.04
Weighted-average common shares outstanding 9,305,408 9,305,408 9,305,408 9,305,408 9,305,408
Diluted net income (loss) per common share (0.02) 0.01 (0.12) 0.16 0.04
Weighted-average common shares and share
equivalents outstanding - assuming dilution 9,305,408 9,305,879 9,305,408 9,343,605 9,315,139
FIFTY-TWO WEEKS ENDED APRIL 26, 1997:
Total revenues $ 14,461 $ 16,667 $ 20,018 $ 23,502 $ 74,648
Operating income (loss) (390) (227) 369 1,599 1,351
Pretax income (loss) (569) (485) 105 1,451 502
Net income (loss) (569) (485) 95 1,412 453
Basic net income (loss) per common share (0.12) (0.10) 0.01 0.15 0.07
Weighted-average common shares outstanding 4,697,232 4,747,379 7,852,849 9,305,408 6,650,717
Diluted net income (loss) per common share (0.12) (0.10) 0.01 0.15 0.07
Weighted-average common shares and share
equivalents outstanding - assuming dilution 4,697,232 4,747,379 7,872,237 9,311,336 6,653,874
</TABLE>
Quarterly results have been, and in the future are likely to be,
substantially affected by the timing of new restaurant openings. Because of the
seasonality of the Company's business and the impact of new restaurant
openings, results for any quarter are not necessarily indicative of the results
that may be achieved for a full fiscal year.
YEAR 2000
Many software applications and operational programs previously written were
not designed to recognize calendar dates beginning in the Year 2000. The failure
of such applications or programs to properly recognize the dates beginning in
the Year 2000 may result in miscalculations or system failures. This could have
an adverse effect on the Company's operations, if not corrected.
The Company has developed a plan to prepare its computer systems and
communication systems for the Year 2000. The plan includes identification and
assessment of all software, hardware and equipment that could potentially be
affected by the Year 2000 issue. If necessary, remedial action will be taken and
further testing will be performed. The Company intends to complete this
identification, assessment and testing by July of 1999. The Company believes
that the majority of its computer systems and communication systems will be Year
2000 compliant with minimal modifications required for software applications,
hardware and equipment, and currently estimates that the total cost of its Year
2000 plan will be approximately $150,000. This includes approximately $100,000
which will be expensed as incurred and approximately $50,000 of capital
expenditures. The Company's aggregate cost estimate does not include time and
costs that may be incurred by the Company as a result of the failure of any
third parties, including suppliers, to become Year 2000 compliant or costs to
implement any contingency plans.
- --------
1 During the third quarter of fiscal 1998, the Company recognized an
impairment loss of $1.1 million, or $0.12 per share, relating to the
write-down of two under-performing Company-Owned restaurants.
2 During the first quarter of fiscal 1998, the Company recognized
non-recurring severance charges of $430,000, or $0.05 per share. These
charges were incurred for the departure of key executives of the Company.
3 During the third quarter of fiscal 1998, the Company incurred a loss on
divestiture of an under-performing joint venture of $611,000, or $0.07 per
share.
14
<PAGE> 16
The Company is currently in the process of contacting critical suppliers
of products and services to determine the extent to which the Company may be
vulnerable to such parties failure to resolve their own Year 2000 issues. The
Company will assess and attempt to mitigate its risks with respect to the
failure of these third parties to be Year 2000 compliant. The effect, if any,
on the Company's results of operations from the failure of third parties to be
Year 2000 compliant can not be reasonably estimated.
Based on the Company's current assessment, no matters have been identified
with regard to the Year 2000 issue that will have a material adverse effect on
the Company's financial condition or results of operations. The Company
operates in a large number of geographically dispersed areas and has access to
a large supplier base. The Company believes this will mitigate any possible
adverse impact. The Company's beliefs and expectations, however, are based on
certain assumptions and expectations that may ultimately prove to be
inaccurate. Potential sources of risk include the inability of suppliers to be
Year 2000 compliant, which could result in delays in product deliveries from
suppliers, and disruption of the distribution channel.
The Company has not yet established a contingency plan, but intends to
develop a plan to mitigate the effects of problems experienced by vendors or
service providers in regard to the timely implementation of Year 2000 programs.
This contingency plan is expected to be developed and in place by July of 1999.
IMPACT OF INFLATION
The Company does not believe that inflation has materially affected its
results of operations during the past five fiscal years. Substantial increases
in costs and expenses, particularly food, supplies, labor and operating
expenses could have a significant impact on the Company's operating results to
the extent that such increases cannot be passed along to customers.
EMPLOYEES
The Company competes with other companies for qualified personnel,
especially management. A shortage of qualified personnel could materially
affect the Company. The Company has not experienced a shortage of qualified
personnel to date and believes that the risk of a shortage is minimal.
SITE LOCATION
The Company competes in the marketplace for qualified restaurant
locations. There is no assurance that the Company can find enough qualified
sites to continue its expansion plans.
CONSUMER TASTE
The restaurant industry is highly competitive and subject to changes in
consumer tastes. The Company believes that it has the ability to respond
quickly to changing taste and preferences because of its flexible format and
trade name.
PART II
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in various legal actions arising in the normal
course of business. While the resolution of any of such actions may have an
impact on the financial results for the period in which it is resolved, the
Company believes that the ultimate disposition of these matters will not, in
the aggregate, have a material adverse effect upon its business or financial
position.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The Exhibits listed on the accompanying Exhibit Index are filed with or
incorporated by reference in this report.
(b) The Company filed no reports on Form 8-K during the period covered by this
Form 10-Q.
15
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf on December 8, 1998, by the undersigned, thereunto duly authorized.
ROADHOUSE GRILL, INC.
(Registrant)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Ayman Sabi President, Chief Executive Officer December 8, 1998
- -------------------------------- and Director ----------------
Ayman Sabi (Principal Executive Officer)
/s/ Glenn E. Glasshagel Chief Financial Officer December 8, 1998
- -------------------------------- (Principal Financial Officer ----------------
Glenn E. Glasshagel and Principal
Accounting Officer)
</TABLE>
16
<PAGE> 18
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
21 Subsidiaries of the Registrant.
27 Financial Data Schedule.
17
<PAGE> 1
Exhibit 21.0
SUBSIDIARIES OF THE REGISTRANT
- ------------------------------
None
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-25-1999
<PERIOD-START> JUL-27-1998
<PERIOD-END> OCT-25-1998
<CASH> 4,038
<SECURITIES> 0
<RECEIVABLES> 352
<ALLOWANCES> 0
<INVENTORY> 1,016
<CURRENT-ASSETS> 8,185
<PP&E> 83,062
<DEPRECIATION> 14,810
<TOTAL-ASSETS> 82,017
<CURRENT-LIABILITIES> 11,022
<BONDS> 0
0
0
<COMMON> 291
<OTHER-SE> 46,543
<TOTAL-LIABILITY-AND-EQUITY> 82,017
<SALES> 28,104
<TOTAL-REVENUES> 28,181
<CGS> 23,172
<TOTAL-COSTS> 26,709
<OTHER-EXPENSES> 518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 585
<INCOME-PRETAX> 954
<INCOME-TAX> 50
<INCOME-CONTINUING> 904
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 904
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
