UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended JUNE 30, 2000
[ ] 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 1-11754
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 BLVD., BATON ROUGE, LOUISIANA 70816
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (225) 293-9440
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
COMMON STOCK NEW YORK STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of class)
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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant based on the closing price of such stock on September 8,
2000 was $23,042,000.
The number of shares outstanding of Common Stock, without par value, as of
September 8, 2000 was 10,528,368.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
June 30, 2000 are incorporated by reference into Part II.
Portions of the definitive proxy statement for the 2000 annual meeting of
shareholders are incorporated by reference into Part III.
PART I
ITEM 1. BUSINESS
OVERVIEW
Piccadilly Cafeterias, Inc., founded in 1944, is the largest cafeteria
chain in the United States with 242 cafeterias in 16 states. We are the
dominant cafeteria chain in the Southeastern and Mid-Atlantic regions. We
serve a diverse and extremely loyal customer base consisting of families,
groups of friends and co-workers, senior citizens, couples and students.
Our patrons enjoy a wide selection of convenient, healthy, freshly prepared
"home cooked" meals at value-oriented prices for lunch and dinner.
We believe that cafeteria-style restaurants have historically enjoyed
relatively stable performance in the competitive family dining segment of
the restaurant industry. We have generated consistent EBITDA over the past
five years, with our EBITDA increasing from $24.0 million in fiscal 1996 to
$26.7 million in fiscal 2000.
We expect to achieve significant annual cost savings through outsourcing
certain food preparation activities and expanding our centralized
purchasing. We expect to reduce annual operating expenses by approximately
$8 to $10 million by outsourcing certain food preparation activities to
third party vendors. We have successfully implemented outsourcing at 34 of
our cafeterias and we intend to roll out this program to our remaining
cafeterias during the next two years. We expect this program to result in
approximately $2.5 million of cost savings for fiscal 2001. We also expect
to save approximately $3 million of annual operating expenses by expanding
our centralized purchasing program to include certain food items that are
currently being purchased by the individual cafeteria managers. For
example, we are currently finalizing terms with a limited number of
suppliers for the centralized purchasing of poultry and intend to implement
this program in the second quarter of fiscal 2001. Over the next 12 to 15
months, we expect to enter into similar agreements with suppliers of other
food items.
BUSINESS STRENGTHS
DOMINANT MARKET SHARE IN CORE MARKETS. We are the largest cafeteria
chain in the United States with 242 cafeterias, and we are the dominant
cafeteria chain in the Southeastern and Mid-Atlantic regions. The next
largest cafeteria chain in these regions operates 32 cafeterias. Although
the family dining industry is very competitive and has grown significantly
through the introduction of new restaurant concepts and new restaurant
openings, the cafeteria segment has not been as competitive. Specifically,
the cafeteria segment has had few new entrants, and the existing major
cafeteria chains have generally focused on their existing regional markets.
As a result, we have experienced limited competition in our markets for
customers seeking a cafeteria-style dining experience.
DIVERSE AND EXTREMELY LOYAL CUSTOMER BASE. We have developed substantial
brand equity and customer loyalty during our 56-year operating history. In
addition, we have developed a diverse customer base consisting of families,
groups of friends and co-workers, senior citizens, couples and students. We
believe cafeteria dining meets changing lifestyle needs by providing
convenient, healthy, freshly prepared and reasonably-priced meals that
combine the ease of fast food with the quality of home cooking. We
attribute our broad market appeal and customer loyalty to the consistent
quality of our meals, our varying menu selection, convenient cafeteria
format, value pricing and well-recognized brand name. Our high level of
repeat business allows us to minimize advertising costs and reduces our
exposure to competition from new restaurant openings in our markets.
HIGH QUALITY FOOD OFFERING. All of our cafeterias offer a wide variety
of quality, reasonably-priced meals. Our standard menu offering includes
soups, salads, seafood, meat, chicken, vegetables, breads, desserts and
beverages. Each of our cafeteria managers has the ability to vary their
menu to include local and seasonal favorites from our extensive proprietary
recipe files. Our typical cafeteria lines offer a wide food selection
including up to 18 entrees, 2 soups, 20 salads, 18 vegetables, 7 breads and
22 desserts. Customers make their meal selections by combining these items
according to their individual preferences. Our food quality, service and
atmosphere were all voted #1 among cafeterias and buffet-style chains by
consumers in RESTAURANTS AND INSTITUTIONS' "Choice in Chains" 2000 survey.
SOLID MARKET POSITION. Since 1990, eating places revenues have increased
at a compound annual growth rate of 5.0% per year to $241.1 billion in
1999. This increase was initially accompanied by the introduction of a
significant number of new restaurant concepts and rapid new-restaurant
expansion. As a result, the restaurant market has become oversaturated and
recently the pace of new-restaurant openings has slowed. Many restaurant
chains are now focused on improving sales and profitability at their
existing restaurants. During this highly competitive period, we have
sustained our operations and maintained a consistent level of EBITDA.
Furthermore, with our 242 cafeterias we are well positioned to increase our
sales in the current environment of slower new-restaurant growth and
continued increases in consumer demand for restaurant dining.
PROVEN MANAGEMENT WITH SIGNIFICANT EQUITY STAKE. Our executive officers
average over 22 years of experience at Piccadilly. In addition, our
district and cafeteria managers have an average of 23 and 17 years of
experience at Piccadilly, respectively. As a result, our management team is
extremely familiar with our existing markets and customer base. Mr. Ronald
A. LaBorde, our Chief Executive Officer, has served us for over 18 years,
and has been our chief executive officer since 1995. Our management team
currently beneficially owns approximately 7.6% of the outstanding shares of
our Company, including shares subject to exercisable options, and our
founders and their beneficiaries beneficially own approximately 19.2% of
the outstanding shares of our Company.
BUSINESS STRATEGY
CAPITALIZE ON THE MORRISON ACQUISITION. In May 1998, we acquired 142
Morrison cafeterias, which was the largest cafeteria chain in the
Southeastern and Mid-Atlantic regions at that time. This acquisition
allowed us to increase our penetration in our regional markets, enhance our
purchasing power and eliminate redundant costs. During fiscal 1999 and the
first quarter of fiscal 2000, we closed 27 unprofitable Morrison cafeterias
and completed the conversion of 112 Morrison cafeterias to our Piccadilly-
style format. With the cafeteria closing and conversion phases completed,
we are now focused on increasing sales and margins. In fiscal 2000, the
Morrison cafeterias contributed only $0.9 million of EBITDA. During that
same time period, Morrison cafeterias on average generated only $1.6
million of sales per cafeteria compared to $2.2 million of sales at our
traditional Piccadilly cafeterias. We believe that the sales and margins of
the Morrison cafeterias can be significantly improved relative to our
experience with the traditional Piccadilly cafeterias.
IMPLEMENT SALES-BUILDING INITIATIVES. In fiscal 2000, same-store sales
declined by 5.2%. Approximately 73% of the declines in same-store sales
was attributable to the Morrison cafeterias. During fiscal 1999 and 2000,
we were focused on the integration of the Morrison cafeterias. The
cafeteria closing and conversion phases of this integration process were
completed by the end of the first quarter of fiscal 2000. The next phase
of our integration plan was improving same-store sales, and during the
balance of fiscal 2000, we tested several sales-building initiatives at 16
cafeteria locations in order to attract and retain new customers and to
increase sales to existing customers. These sales-building initiatives
included simplified menu pricing, neighborhood and direct mail marketing,
and the sponsorship of employee contests. These initiatives have been well
received by our customers. Specifically, we have experienced a consistent
trend of year-over-year sales improvement at these 16 cafeterias, from a
decline in monthly sales of 14% in January 2000 to an increase of 11% in
July 2000, primarily due to improved customer traffic. We are building on
this success by implementing these initiatives at our other cafeterias over
the next several months.
IMPLEMENT OUTSOURCING PROGRAM. We have historically prepared almost all
of our meals from scratch at each cafeteria location. We recently initiated
a new outsourcing program at 34 of our cafeterias, in which outside vendors
prepare and provide selected components of our recipes. The outsourcing
program has been implemented carefully in order to maintain consistently
high levels of food freshness and quality. We expect that this initiative
will significantly reduce our operating expenses, labor costs, food
spoilage and waste and capital expenditures for kitchen equipment and will
result in approximately $2.5 million of cost savings for fiscal 2001. When
fully implemented, we expect to reduce annual operating expenses by between
approximately $8 and $10 million through this outsourcing program. We
intend to roll out the outsourcing program to our remaining cafeterias
during the next two years.
EXPAND CENTRALIZED PURCHASING PROGRAM. Currently, the managers at each
of our cafeterias have purchasing responsibility for approximately one-
third of the food ingredients used in the meals we serve. We are
implementing a new program that will significantly reduce the number of our
food suppliers by centralizing the purchasing function for some or all of
these items. We are currently finalizing terms with a limited number of
suppliers for the centralized purchasing of poultry and intend to implement
this program in the second quarter of fiscal 2001. Over the next 12 to 15
months, we expect to enter into similar agreements with suppliers of other
food items. Through centralization, we expect to achieve significant volume
purchase discounts, resulting in approximately $3 million of annual cost
savings, as well as greater consistency in food quality and taste across
all of our cafeterias. In addition to providing significant cost savings,
centralized purchasing will allow our cafeteria managers to spend more of
their time increasing sales and enhancing customer service.
CAFETERIA OPERATIONS
STORE DESIGN AND LAYOUT
Our traditional cafeterias average approximately 10,000 square feet in
size and seat approximately 350 customers. During 1997, the Company
completed the design of a different cafeteria model, which has
approximately 7,500 square feet and seats between 165 to 200 customers.
This smaller cafeteria allows the Company to access a broader range of
markets at a lower investment cost. As of June 30, 2000, we have opened 10
new cafeterias utilizing this new design and format.
MENU
FOOD ITEMS. All of our cafeterias offer a wide variety of quality,
reasonably-priced meals. Our standard menu offering includes soups, salads,
seafood, meat, chicken, vegetables, breads, desserts and beverages. Each of
our cafeteria managers has the ability to vary their menu to include local
and seasonal favorites from our extensive proprietary recipe files. Our
typical cafeteria lines offer a wide food selection including up to 18
entrees, 2 soups, 20 salads, 18 vegetables, 7 breads and 22 desserts.
Customers make their meal selections by combining these items according to
their individual preferences. Our food quality, service and atmosphere were
all voted #1 among cafeterias and buffet-style chains by consumers in
RESTAURANTS AND INSTITUTIONS' "Choice in Chains" 2000 survey.
PRICING. Historically, we have sold most meals as "bundled" meals that
included side items and beverages, although customers have also been able
to purchase meals on an a la carte basis. We continuously evaluate our meal
pricing structure to assure that we deliver value-oriented meals to our
customers. As part of that process, during fiscal 2000, we experimented
with alternative bundled meal pricing programs. The most recent version of
this program was successfully tested at 10% of our cafeterias through
August 2000. This program provides a progression of price-points from
approximately $5 to $9 per meal. Each meal includes an entree, two side
orders, and a bread selection. For example, popular items like southern
fried chicken, fried catfish, and chopped beef are available at the $5
price point while other more expensive items such as steaks, our popular
crawfish etouffee and other seafood dishes are available at the $8
and $9 price points. Although the program attempts to focus the customer on
the value received in a bundled meal, customers may still purchase items on
an a la carte basis. Since implementation of this program, customer
response has been positive and check averages have remained constant. We
intend to continue to phase this new program at our other cafeteria
locations, while continuing to gather customer feedback and analyzing sales
information.
MARKETING AND ADVERTISING
In fiscal 1999 and 2000, our advertising spending has been approximately
$6 to $7 million per year and has focused primarily on television and radio
spots and some direct marketing. We believe that the majority of our sales
come from customers living or working within three to five miles of our
cafeterias. In order to better reach our target population, we intend to
maintain our advertising budget at historical levels while altering the
emphasis of our spending. As a result, in August 2000 we adopted new sales-
building initiatives that consist primarily of the following:
NEIGHBORHOOD MARKETING. This program focuses on direct mailings and
newspaper inserts, seeking to increase customer traffic by increasing local
awareness of our cafeterias, and may include purchase discounts and
coupons.
EMPLOYEE CONTESTS. We hold regular sales contests among our managers and
employees at all of our cafeteria locations to enhance morale and improve
cafeteria sales. We believe these contests have the added benefit of
improving productivity and efficiency in our cafeteria operations as well.
SELECTIVE BROADCAST MARKETING. We intend to selectively use some
television and radio advertising in our markets where we have a significant
concentration of cafeterias and where the potential exists for significant
increases in customer traffic as a result of these advertisements.
DINING EXPERIENCE. In addition to our general advertising, we believe
that providing our patrons with a pleasant and enjoyable dining experience
will result in return visits and word-of-mouth advertising. We recently
initiated an employee training program emphasizing a clean environment,
customer hospitality, and quality food.
MEAL PREPARATION
Under our new outsourcing program, outside vendors have begun to prepare
and provide selected components of our recipes. Suppliers are responsible
for many of the mixing and cooking duties associated with meal preparation
and for delivering purchased items to our distributor. The outsourcing
program has been implemented carefully in order to maintain consistently
high levels of food freshness and quality. We expect that our new
outsourcing program will significantly reduce our operating expenses, labor
costs, food spoilage and waste and capital expenditures for kitchen
equipment. We initially tested this program at 14 cafeterias where we saved
approximately $34,000 of operating expenses per month. We have recently
implemented this program at 20 additional cafeterias and intend to roll out
this program to our remaining cafeterias during the next two years. We
expect this program will result in approximately $2.5 million of cost
savings for fiscal 2001. When fully implemented, we expect to reduce annual
operating expenses by between approximately $8 and $10 million through this
outsourcing program.
PURCHASING AND DISTRIBUTION
Currently, purchasing decisions for approximately one-third of the food
ingredients used in the meals served at our cafeterias is under the control
of the cafeteria managers, each of whom has the freedom to negotiate with
local or regional suppliers for that particular cafeteria, subject to
meeting quality specifications. As a result, daily ingredients are
purchased from over 400 different vendors. We believe that centralized
purchasing of these items will significantly reduce the number of food
suppliers from whom we purchase some or all of these items. We are
currently finalizing terms with a limited number of suppliers for the
centralized purchasing of poultry and intend to implement this program in
the second quarter of fiscal 2001. Over the next 12 to 15 months, we expect
to enter into similar agreements with suppliers of other food items.
Through centralization, we expect to achieve significant volume purchase
discounts, resulting in approximately $3 million of annual cost savings, as
well as greater consistency in food quality and taste across all of our
cafeterias. In addition to providing significant cost savings, centralized
purchasing will allow our cafeteria managers to spend more of their time
increasing sales and enhancing customer service.
We currently obtain approximately two-thirds of all of our food orders
through one distributor located in Baton Rouge, Louisiana. The remaining
food items are purchased from local suppliers and delivered directly to our
cafeterias. With the implementation of centralized food purchasing and our
increasing reliance on outsourcing of some food preparation, we may
increase our shipments through this distributor and, if necessary, use
additional national or regional distributors. We believe that there are
numerous other distributors available to process our shipments should these
distributors be unable to meet our distribution needs.
EMPLOYEES
As of June 30, 2000, we had approximately 11,500 employees, of whom all
but about 100 corporate headquarters employees worked at Piccadilly's 242
cafeterias. On average, each cafeteria operates with three to four managers
and assistant managers and employs 50 to 60 employees. Most cafeteria
employees are paid on an hourly basis, except cafeteria managers. Our
employees are not unionized. We have never experienced any significant work
stoppages and believe that our employee relations are good.
Wages we pay our employees have increased in recent years due to the
expanding economy, a tight labor market and increases in the federally
mandated minimum wage. In mid-1999 we adopted a "tip-credit wage" program
designed to offset wage increases for dining room personnel. Under this
program, dining room employees are increasingly dependent on customer tips
for a significant portion of their hourly compensation, instead of wages
paid by us. This program has helped reduce our labor costs as a percent of
net sales. Historically we have been able to offset wage cost increases
through increased efficiencies in operations and, as necessary, through
retail price increases although there can be no assurance that we will
continue to be able to do so in the future.
COMPETITION
The food service industry is highly competitive and affected by external
changes such as economic conditions, disposable income, consumer tastes,
and changing population and demographics. Competitive factors include: food
quality, variety and price; customer service; location; the number and
proximity of competitors; decor; and public reputation. We consider our
principal competitors to be other cafeterias, family dining venues, and
fast-food operations. Like other food service operations, we follow changes
in both consumer preferences for food and habits in patronizing eating
establishments.
TRADEMARKS AND TRADENAMES
Our cafeterias operate principally under the Piccadilly Cafeterias name
and service mark, which is registered with the United States Patent and
Trademark Office for a term presently expiring in January 2009. Registered
service marks may continually be renewed for 10 year periods. We also have
a proprietary interest in many of our recipes. We regard our service marks
and trademarks as having significant value and being an important factor in
the development of the Piccadilly concept. Our policy is to pursue and
maintain registration of our service marks and trademarks whenever possible
and to oppose vigorously any infringement or dilution of our service marks
and trademarks.
REGULATORY MATTERS
Each of the cafeterias operated by the Company is subject to licensing
and regulation by the health, sanitation, safety, building and fire
agencies of the respective states and municipalities in which such
cafeterias are located. A failure to comply with one or more regulations
could result in the imposition of sanctions, including the closing of
facilities for an indeterminate period of time, or third-party litigation,
any of which could have a material adverse effect on the Company and its
results of operations.
The Company also is subject to laws and regulations governing its
relationships with employees, including minimum wage requirements,
overtime, reporting of tip income, work and safety conditions and
regulations governing employment. Because a significant number of the
Company's employees are paid at rates tied to the federal minimum wage, an
increase in the minimum wage would increase the Company's labor costs. An
increase in the minimum wage rate or employee benefits costs could have a
material adverse effect on the Company and its results of operations.
The Company's operations are also subject to federal, state and local
laws and regulations relating to environmental protection, including
regulation of discharges into the air and water. Under various federal,
state and local laws, an owner or operator of real estate may be liable for
the costs of removal or remediation of certain hazardous or toxic
substances on or in such property. Such liability may be imposed without
regard to whether the owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances. Although the Company is
not aware of any material environmental conditions that require remediation
by the Company under federal, state or local law at its properties, the
Company has not conducted a comprehensive environmental review of its
properties or operations and no assurance can be given that the Company has
identified all of the potential environmental liabilities at its properties
or that such liabilities would not have a material adverse effect on the
financial condition of the Company.
Additionally, the Company's operations are regulated pursuant to state
and local sanitation and public health laws. Operating cafeterias utilize
electricity and natural gas, which are subject to various federal and state
regulations concerning the allocation of energy. The Company's operating
costs have been and will continue to be affected by increases in the cost
of energy.
ITEM 2. PROPERTIES
All of our cafeterias are located in urban and suburban areas, in a
variety of strip shopping centers and malls, and free-standing buildings.
We lease all of the cafeterias located in strip shopping centers and malls.
Of the 94 cafeterias located in free-standing buildings, we own the
building and land for 32 of the cafeterias, and the remainder are operated
in Company-owned buildings located on leased land. Leases provide for
monthly rentals, typically computed on the basis of a fixed amount plus a
percentage of sales. Our cafeteria locations by state are as follows:
<TABLE>
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STATE CAFETERIAS
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<S> <C>
Florida 57
Georgia 40
Louisiana 33
Alabama 21
Tennessee 18
Virginia 16
Texas 15
Mississippi 12
South Carolina 9
Kentucky 5
North Carolina 5
Maryland 3
Missouri 3
Oklahoma 3
Kansas 1
West Virginia 1
------
Total 242(1)
======
</TABLE>
_______________
(1) Includes nine quick service cafeterias in mall foodcourts.
_______________
Piccadilly's corporate headquarters occupy approximately two-thirds of a
Company-owned 45,000 square foot office building completed in 1974 and
located on a Company-owned tract comprising approximately five acres in
Baton Rouge, Louisiana. The remainder of the building is leased to
commercial tenants.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to and does not have any property that is the
subject of any legal proceedings pending or, to the knowledge of
management, threatened, other than ordinary routine litigation incidental
to its business and proceedings which are not material or as to which
management believes the Company has adequate insurance.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 4(A). EXECUTIVE OFFICERS OF THE REGISTRANT
Executive officers are elected annually by the Board of Directors and hold
office until a successor is duly elected. The names and positions of
executive officers of the Registrant, together with a brief description of
the business experience of each such person during the past five years, is
set forth below.
Ronald A. LaBorde, age 44, President and Chief Executive Officer, has held
such positions since July 1995. From January 1992 to May 1995 he was
Executive Vice President, Treasurer and Chief Financial Officer.
Joseph S. Polito, age 58, Executive Vice President and General Manager, has
held such positions since August 1995. From September 1992 to July 1995,
he was Executive Vice President and Director of Training.
Mark L. Mestayer, age 42, Executive Vice President and Chief Financial
Officer, has held such positions since September 1999. From July 1996 to
September 1999, he was Executive Vice President, Secretary and Director of
Finance, and from May 1992 to July 1996, he was Executive Vice President,
Secretary and Controller.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY
HOLDER MATTERS
Information regarding Common Stock market prices and dividends, on page 12
of the Annual Shareholders Report for the year ended June 30, 2000 is
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
"Selected Financial and Operating Data", on page 6 of the Annual
Shareholders Report for the year ended June 30, 2000, is incorporated
herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations, on pages 7 through 12 of the Annual Shareholders Report for the
year ended June 30, 2000, is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risks related to interest rates as a
result of the variable interest rates on its $90,000,000 credit
arrangement, where the Company's earnings are exposed to changes in short-
term interest rates. If (i) the variable rates on the Company's credit
arrangement were to increase by 1% from the rate at June 30, 2000 and (ii)
the Company borrowed the maximum amount available under its senior note
agreement ($73,431,000) through June 22, 2001 (date of maturity), solely as
a result of the increase in interest rates, then the Company's interest
expense would increase, resulting in a $452,000 decrease in net income,
assuming an effective tax rate of 37%. The fair value of the Company's
credit arrangement is not affected by changes in market interest rates.
This discussion does not consider the effects of the reduced level of
overall economic activity that could exist following such changes.
Further, in the event of changes of such magnitude, management would likely
take actions to mitigate its exposure to such changes. The Company has not
used derivative instruments to engage in speculative transactions or
hedging activities.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplementary data,
included on pages 13 through 23 of the Annual Shareholders Report for the
year ended June 30, 2000, are incorporated herein by reference:
Consolidated balance sheets as of June 30, 2000 and 1999
Consolidated statements of income for the fiscal years ended June 30,
2000, 1999 and 1998
Consolidated statements of changes in shareholders' equity for the
fiscal years ended June 30, 2000, 1999, and 1998
Consolidated statements of cash flows for the fiscal years ended June
30, 2000, 1999, and 1998
Notes to consolidated financial statements
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
In accordance with General Instruction G (3) to Form 10-K, Items 10, 11,
12, and 13 have been omitted since the Company will file with the
Commission a definitive proxy statement complying with Regulation 14A
relating to its 2000 annual meeting and the election of directors not later
than 120 days after the close of its fiscal year. The Company incorporates
by reference the information in response to such items set forth in its
definitive proxy statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) (1) Financial Statements--The following are incorporated herein by
reference in this Annual Report on Form 10-K from the indicated pages
of the Registrant's Annual Shareholders Report for the year ended June
30, 2000:
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ANNUAL
SHAREHOLDERS
DESCRIPTION REPORT PAGE
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<S> <C>
Consolidated balance sheets as of June 30, 2000 and 1999 13
Consolidated statements of income for the fiscal years
ended June 30, 2000, 1999, and 1998 14
Consolidated statements of changes in shareholders' equity
for the fiscal years ended June 30, 2000, 1999, and 1998 14
Consolidated statements of cash flows for the fiscal years
ended June 30, 2000, 1999, and 1998 15
Notes to consolidated financial statements 16
Report of independent auditors 24
</TABLE>
(2)Schedule--The following consolidated schedule and information
is included in this annual report on Form 10-K on the page
indicated. All other schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable, and therefore have been omitted.
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DESCRIPTION FORM 10-K PAGE
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<S> <C>
Schedule II -- Valuation and qualifying accounts 13
</TABLE>
(3)Listing of Exhibits - See sub-section (c) below.
(b) Reports on Form 8-K: None
(c) EXHIBITS
3. (a) Articles of Incorporation of the Company, restated through
March 2, 1999(1).
(b) By-laws of the Company, as amended and restated through March
12, 1999(1).
4. (a) Rights Agreement dated November 2, 1998, including (i) as
Exhibit A - The Form of Articles of Amendment, (ii) as Exhibit B
- the Forms of Rights Certificate, Assignment and Election to
Purchase, and (iii) as Exhibit C - the Summary Description of the
Shareholder Rights Plan(2), as amended by First Amendment to
Rights Agreement, dated June 1, 1999.
(b) Piccadilly Cafeterias, Inc. Dividend Reinvestment and Stock
Purchase Plan(3).
10. (a) Amended and Restated Piccadilly Cafeterias, Inc. 1993 Incentive
Compensation Plan(4).
(b) Form of Stock Option Agreement under the Amended and Restated
Piccadilly Cafeterias, Inc. 1993 Incentive Compensation Plan.
(c) Form of Management Continuity Agreement, effective March 27,
1995, between Piccadilly Cafeterias, Inc. and each of Messrs.
LaBorde, Mestayer, and Polito(5).
(d) Form of Director Indemnity Agreement, effective April 27, 1995,
unless otherwise indicated, between Piccadilly Cafeterias, Inc.
and each of Messrs. LaBorde, Erben (November 3, 1997), Francis
(September 25, 1995), Guyton (July 1, 1996), Murrill, Redman
(September 25, 1995), Slaughter (September 24, 1998), and
Smith(5).
(e) $125,000,000 Credit Agreement dated as of June 24, 1998 and as
amended by First Amendment to Credit Agreement dated July 31,
1998(6), as amended by Second and Third Amendments to the
$125,000,000 Credit Agreement dated October 30, 1998 and June 28,
1999, respectively(7), and as amended by Fourth Amendment to
$125,000,000 Credit Agreement, dated November 18, 1999.(8)
(f) Piccadilly Cafeterias, Inc. Supplemental Employee Deferral Plan,
dated March 31, 2000.
(g) Form of Morrison Fresh Cooking, Inc. Management Retirement Plan
together with related form of Trust.(9), as amended by Form of
First and Second Amendments to the Morrison Fresh Cooking, Inc.
Management Retirement Plan(10), as amended by Third Amendment
to the Morrison Fresh Cooking, Inc. Management Retirement Plan,
effective December 31, 1999.
(h) Form of Morrison Fresh Cooking, Inc. Executive Supplemental
Pension Plan together with related form of Trust Agreement(9),
as amended by First Amendment to the Morrison Fresh Cooking, Inc.
Executive Supplemental Pension Plan(10).
13. Pages 7 through 24 of the Registrant's Annual Report to Shareholders
for the fiscal year ended June 30, 2000.
23. Consent of Independent Auditors
27. Financial Data Schedule
___________________
(1) Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999.
(2) Incorporated by reference to Exhibits 1, 2, 3 and 4 of the Company's
Registration Statement on Form 8-A filed with the Commission on
November 19, 1998.
(3) Incorporated by reference from the Registrant's Post-effective
amendment No. 1 on Form S-3, registration No. 033-17131 filed with the
Commission on June 14, 2000.
(4) Incorporated by reference from Appendix A of the Company's definitive
Proxy Statement filed with the Commission on September 23, 1998.
(5) Incorporated by reference from the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996.
(6) Incorporated by reference from the Registrant's Annual Report on form
10-K for the year ended June 30, 1998.
(7) Incorporated by reference from the Registrant's Annual Report on Form
10-K for the year ended June 30, 1999
(8) Incorporated by reference to the Registrant's Report on Form 8-K,
dated November 18, 1999.
(9) Incorporated by reference to the Morrison Fresh Cooking, Inc.'s
amendment to Registration Statement on Form 10/A filed with the
Commission on February 29, 1996.
(10) Incorporated by reference to the Morrison Fresh Cooking, Inc. Annual
Report on Form 10-K for the year ended May 31, 1997.
<PAGE>
(5) 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 by the undersigned, thereunto duly authorized.
PICCADILLY CAFETERIAS, INC.
(Registrant)
By:/S/ RONALD A. LABORDE
Ronald A. LaBorde
President and Chief Executive Officer
Date: SEPTEMBER 1, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
/s/ Norman C. Frances 9/1/00 /s/ Dale E. Redman 9/1/00
Norman C. Frances, Director Date Dale E. Redman, Director Date
/s/ Robert P. Guyton 9/1/00 /s/ Christel C. Slaughter 9/1/00
Robert P. Guyton, Director Date Christel C. Slaughter, Director Date
/s/ Ronald A. LaBorde 9/1/00 /s/ C. Ray Smith 9/1/00
Ronald A. LaBorde, President, Date C. Ray Smith, Director Date
Chief Executive Officer and
Director
/s/ Paul W. Murrill 9/1/00 /s/ Mark L. Mestayer 9/1/00
Paul W. Murrill, Chairman of Date Mark L. Mestayer Date
the Board Executive Vice President
and Chief Financial Officer
/s/ Ralph Erben 9/1/00 (Principal Financial Officer)
Ralph Erben, Director Date
/s/ W. Scott Bozzell 9/1/00
W. Scott Bozzell, Date
Executive Vice President,
Secretary and Controller
(Principal Accounting
Officer)
</TABLE>
<PAGE>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
ADDITIONS
Balance at (1) (2)
Beginning Charged to costs Charged to Other Deduction-- Balance at
Description of Period and expenses Accounts-Describe Describe End of Period
<S> <C> <C> <C> <C> <C>
Reserves for Unit Closings:
Year ended June 30, 2000:
Property, plant & equipment allowance $ 1,475,815 $ 635,529(A) $ 840,286
Current liability --- --- ---
Long-term liability 12,693,193 2,592,356(A) 10,100,837
----------- ----------- -----------
$14,169,008 $ 3,227,885 $10,941,123
=========== =========== ===========
Year ended June 30, 1999:
Property, plant & equipment allowance $ 1,927,511 $ $ 451,696(A) $ 1,475,815
Current liability --- ---
Long-term liability 20,104,102 1,350,000 (6,777,231)(B) 1,983,678(A) 12,693,193
----------- ----------- ----------- ----------- -----------
$22,031,613 $ 1,350,000 $(6,777,231) $ 2,435,374 $14,169,008
=========== =========== =========== =========== ===========
Year ended June 30, 1998:
Property, plant & equipment allowance $ 2,046,488 $ 939,000 $ 1,057,977(A) $ 1,927,511
Current liability --- ---
Long-term liability 2,774,941 2,514,000 16,466,339(B) 1,651,178(A) 20,104,102
----------- ----------- ----------- ----------- -----------
$ 4,821,429 $ 3,453,000 $16,466,339 $ 2,709,155 $22,031,613
=========== =========== =========== =========== ===========
</TABLE>
(A) Deductions are for the write-off of certain property, plant and equipment
relating to units closed and for the payment of other obligations (primarily
rent) for those units closed and for those units for which a provision for unit
closing was recorded during the years ended June 30, 1992, 1997 and 1999.
(B) Represents reserves for Morrison units which were recorded as part of the
allocation of purchase price.
<PAGE>
