FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
_________________
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
_______________ ________________
Commission file number 0-9037
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PICCADILLY CAFETERIAS, INC.
___________________________
(Exact name of registrant as specified in its charter)
Louisiana 72-0604977
____________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3232 Sherwood Forest Boulevard, Baton Rouge, Louisiana 70816
____________________________________________________________________
(Address of principal executive offices) (Zip Code)
(504) 293-9440
____________________________________________________________________
(Registrant's telephone number, including area code)
Not applicable
____________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report)
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 outstanding of each of the issuer's
classes of common stock, as of January 28, 1994.
Common Stock, without par value - 10,105,236
____________________________________________________________________
<PAGE>2
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of
December 31, 1993 and June 30, 1993
Consolidated Statements of Income for the Three
Months and Six Months Ended December 31, 1993 and
December 31, 1992
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended December 31, 1993 and
December 31, 1992
Note to Condensed Consolidated Financial
Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
<PAGE>3
PICCADILLY CAFETERIAS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
<TABLE>
<CAPTION>
December 31, June 30,
1993 1993
___________ _________
(Thousands of dollars)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash & cash equivalents $ 11,262 $ 14,094
Accounts and notes receivable 801 837
Inventories 11,826 12,012
Income taxes recoverable 1,132 1,930
Deferred income taxes 1,667 1,667
Other current assets 621 1,396
________ ________
TOTAL CURRENT ASSETS 27,309 31,936
PROPERTY, PLANT AND EQUIPMENT 214,148 205,150
Less allowances for depreciation 92,385 87,921
Less allowances for unit closings 1,788 1,832
________ ________
119,975 115,397
OTHER ASSETS 5,893 5,285
________ ________
TOTAL ASSETS $153,177 $152,618
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 3,000 $ 3,000
Accounts payable 15,495 15,357
Accrued expenses 10,736 11,036
Reserve for unit closings 500 500
________ _______
TOTAL CURRENT LIABILITIES 29,731 29,893
LONG-TERM DEBT 34,500 36,000
DEFERRED INCOME TAXES, less current portion 6,728 6,728
RESERVE FOR UNIT CLOSINGS,less current portion 6,980 7,805
SHAREHOLDERS'EQUITY
Preferred Stock, no par value; authorized
50,000,000 shares; issued and outstanding:
none - -
Common Stock, no par value, stated value $1.82
per share; authorized 100,000,000 shares;
issued and outstanding; 10,002,006 shares at
December 31, 1993, and 9,988,189 shares at
June 30, 1993 18,373 18,160
Additional paid-in capital 16,070 15,119
Retained earnings 40,795 38,913
_______ _______
75,238 72,192
________ ________
$153,177 $152,618
======== ========
</TABLE>
See Note to Condensed Consolidated Financial Statements (unaudited)
<PAGE>4
PICCADILLY CAFETERIAS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31 December 31
1993 1992 1993 1992
________ ________ _______ _______
(Thousands of dollars except per share data)
<S> <C> <C> <C> <C>
Net Sales $ 71,175 $ 69,340 $140,239 $136,880
Cost and expenses:
Cost of sales 39,645 41,487 78,678 81,072
Other operating expenses 23,464 22,125 46,353 44,214
General and administrative expenses 3,228 3,295 6,665 6,308
Interest expense 825 872 1,656 1,737
Other expense (income) 189 22 (134) (103)
_______ _______ _______ _______
67,351 67,801 133,218 133,228
_______ _______ _______ _______
INCOME BEFORE INCOME TAXES 3,824 1,539 7,021 3,652
Provision for income taxes 1,491 569 2,738 1,351
_______ _______ _______ _______
NET INCOME $ 2,333 $ 970 $ 4,283 $ 2,301
======= ======= ======= =======
Weighted average number of shares
outstanding 10,002 9,854 9,999 9,852
======= ======= ======= =======
Net income per share $ .23 $ .10 $ .43 $ .23
======= ======= ======= =======
Cash dividends per share $ .12 $ .12 $ .24 $ .24
======= ======= ======= =======
</TABLE>
See Note to Condensed Consolidated Financial Statements (unaudited)
<PAGE>5
PICCADILLY CAFETERIAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
December 31
______________________
1993 1992
_______ _______
(Thousands of dollars)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 4,283 $ 2,301
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 5,659 6,045
Costs associated with reserved units (825) (1,641)
Loss on sale of assets 369 104
Pension expense 217 223
Change in operating assets and liabilities 331 (4,404)
_______ _______
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,034 2,628
INVESTING ACTIVITIES
Purchase of property, plant and equipment (11,166) (4,273)
Proceeds from sale of property, plant and
equipment 1,034 168
________ _______
NET CASH USED IN INVESTING ACTIVITIES (10,132) (4,105)
FINANCING ACTIVITIES
Common stock transactions 1,164 1,001
Payments on long-term debt (1,500) -
Dividends paid (2,398) (2,364)
________ _______
NET CASH USED IN FINANCING ACTIVITIES (2,734) (1,363)
________ _______
(Decrease) in cash and cash equivalents (2,832) (2,840)
Cash and cash equivalents at beginning
of period 14,094 7,839
________ _______
Cash and cash equivalents at end of period $11,262 $ 4,999
======== =======
</TABLE>
See Note to Condensed Consolidated Financial Statements (unaudited)
<PAGE>6
PICCADILLY CAFETERIAS, INC.
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
December 31, 1993
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with the instructions
to Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Where applicable, prior year amounts have been restated to
conform to current presentation.
Comparative results of operations by periods may be affected by
the timing of the opening of new units. Quarterly results are
additionally affected by seasonal fluctuations in customer
volume. Customer volume at established units is generally higher
in the second quarter ended December 31 and lower in the third
quarter ending March 31 reflecting the general seasonal retail
activity. A fluctuation in customer volume has a
disproportionate effect on operating profit.
<PAGE>7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues for the three months ended December 31, 1993 were
$71,175,000 compared to prior year second quarter revenues of
$69,340,000. Total cafeteria customer traffic in the current
quarter decreased 2.7% from the same period last year. Customer
counts decreased 4.0% for those cafeterias open in both periods.
Second quarter results include one new cafeteria opening in St.
Louis, Missouri on November 10, 1993 and the closings of a
cafeteria in Orlando, Florida in October 1993 and Atlanta,
Georgia in December 1993.
Revenues for the six months ended December 31, 1993 were
$140,239,000 compared to $136,880,000 posted in the same period
last year. Total cafeteria customer traffic for the current six-
month period decreased 2.0% from the comparable period a year
ago. Customer counts decreased 3.2% for those cafeterias open in
both six-month periods. Revenues for the six-month period ended
December 31, 1993 include two new cafeteria units opened since
December 31, 1992. Prior year first quarter revenues exclude 47
net operating days that were lost in eight South Florida
cafeterias and twenty-one Louisiana cafeterias due to power
outages caused by Hurricane Andrew.
The comparison of sales is impacted by the price
restructuring in a majority of the Company's cafeterias in the
first quarter of fiscal 1993. Prices on many a la carte items
were reduced an average of 12% to 15% to simplify pricing and to
offer each customer the same value as could be obtained from
purchasing a packaged meal, such as the Dilly Dish and the Super
Dilly. After the price restructuring, customer buying habits
shifted from the packaged meals to a la carte purchases. This
shift resulted in a 3% decline in the customer check average. A
price increase of approximately 2.5% (primarily on packaged
meals) in the second quarter of fiscal 1993 substantially offset
the decline in check average. Price increases of approximately
2% on a la carte items were implemented on March 1, 1993 and June
1, 1993. The check average for the first quarter of fiscal 1994
was $5.11, an increase of 4.9% over the prior year. A price
increase of approximately 1.4% was implemented on November 1,
1993. The check average for the second quarter of fiscal 1994
was $5.22, an increase of 6.8% over the prior year second
quarter.
Cost of sales, as a percent of sales, decreased 413 basis
points in the second quarter compared to the same period last
year and 313 basis points during the six-month period ended
December 31, 1993 from the same six-month period last year.
These improvements are largely attributable to sales price
increases and a reduction in food and labor costs.
The Revenue Reconciliation Act of 1993 was enacted into law
on August 10, 1993. This Act, combined with an increase in the
Company's effective state income tax rate, has resulted in an
increase of the Company's current effective income tax rate from
37% to 39% for fiscal 1994.
Two cafeterias whose lease terms have essentially expired
will close during the remainder of fiscal 1994. The impact of
these closings is not material to the financial position of the
Company nor its results of operations. The Company plans to
open two cafeterias in these markets to replace these closed
units.
The Company maintains a $10 million unsecured, short-term
line of credit. During the quarter ended December 31, 1993, and
as of January 28, 1994, the entire amount under this facility was
available.
<PAGE>8
PART II -- OTHER INFORMATION
Item 1. Legal proceedings -- None.
Item 2. Changes in securities -- None.
Item 3. Defaults upon senior securities -- None.
Item 4. Submission of matters to vote of security holders -- None.
Item 5. Other information -- None.
Item 6. (a) Exhibits -- None.
(b) Reports on Form 8-K -- None.
<PAGE>9
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Piccadilly Cafeterias, Inc.
___________________________
Registrant
1/27/94 /s/James W. Bennett
_______ ______________________________________
Date James W. Bennett, Chairman and Chief
Executive Officer
1/27/94 /s/Ronald A. LaBorde
_______ ______________________________________
Date Ronald A. LaBorde, Executive Vice
President,
Treasurer and Chief Financial Officer
1/27/94 /s/Mark L. Mestayer
_______ ______________________________________
Date Mark L. Mestayer, Executive Vice
President, Secretary, Controller,
and Principal Accounting Officer
