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 MARCH 31, 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 (504)293-9440
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 Common Stock, without par value, as of
April 14, 2000, was 10,528,368.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
PICCADILLY CAFETERIAS, INC.
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)
BALANCES AT MARCH 31 June 30
<S> <C> <C>
2000 1999
---------- ----------
ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 936 $ 1,970
Inventories 12,671 12,595
Recoverable income taxes --- 5,578
Deferred income taxes 11,416 11,216
Other current assets 2,324 888
--------- ---------
TOTAL CURRENT ASSETS 27,347 32,247
PROPERTY, PLANT AND EQUIPMENT 308,949 310,285
Less allowances for depreciation and unit closings 140,720 134,035
--------- ---------
NET PROPERTY, PLANT AND EQUIPMENT 168,229 176,250
GOODWILL, net of $826,000 and $532,000 accumulated
amortization at March 31, 2000 and at June 30, 1999,
respectively 12,397 12,982
OTHER ASSETS 10,256 11,460
--------- ---------
TOTAL ASSETS $ 218,229 $ 232,939
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 11,907 $ 18,612
Accrued interest 248 275
Accrued salaries, benefits and related taxes 22,222 22,824
Accrued rent 4,562 5,183
Other accrued expenses 4,257 6,267
--------- ---------
TOTAL CURRENT LIABILITIES 43,196 53,161
LONG-TERM DEBT 73,352 74,226
DEFERRED INCOME TAXES 4,292 3,992
RESERVE FOR UNIT CLOSINGS 10,649 12,693
ACCRUED EMPLOYEE BENEFITS, less current portion 9,135 9,465
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 10,528,368 shares at March 31, 2000
and at June 30, 1999 19,141 19,141
Additional paid-in capital 18,735 18,735
Retained earnings 40,002 41,804
--------- ---------
77,878 79,680
Less treasury stock at cost: 25,000 Common Shares at
March 31, 2000 and at June 30, 1999 273 278
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 77,605 79,402
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 218,229 $ 232,939
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
PICCADILLY CAFETERIAS, INC.
<TABLE>
<CAPTION>
(Amounts in thousands - except per share data)
THREE MONTHS ENDED MARCH 31 NINE MONTHS ENDED MARCH 31
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $ 110,022 $ 122,498 $ 340,516 $ 381,809
Cost and expenses:
Cost of sales 64,233 73,566 201,426 229,213
Other operating expense 38,843 42,568 121,785 127,899
General and administrative expense 3,592 4,249 11,521 13,219
Interest expense 2,005 1,704 5,064 4,969
Other expense (income) (101) (326) (624) (517)
--------- --------- --------- ---------
108,572 121,761 339,172 374,783
--------- --------- --------- ---------
Gain on sale of Ralph & Kacoo's --- 1,556 --- 1,556
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 1,450 2,293 1,344 8,582
Provision for income taxes (benefit) 578 (505) 609 1,920
--------- --------- --------- ---------
NET INCOME $ 872 $ 2,798 $ 735 $ 6,662
========= ========= ========= =========
Weighted average number of shares outstanding 10,502 10,505 10,503 10,504
========= ========= ========= =========
Net income per share - basic and assuming dilution $ .08 $ .27 $ .07 $ .63
========= ========= ========= =========
Cash dividends per share $ --- $ .12 $ .24 $ .36
========= ========= ========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
PICCADILLY CAFETERIAS, INC.
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
NINE MONTHS ENDED MARCH 31 2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 735 $ 6,662
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation and amortization 12,364 12,863
Costs associated with closed units (2,044) (145)
Gain on sale of Ralph & Kacoo's --- (1,556)
Provision for deferred income taxes 300 600
Loss on sales of assets 157 362
Pension expense, net of contributions 850 (1,400)
Change in operating assets and liabilities (3,433) (8,594)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,929 8,792
INVESTING ACTIVITIES
Net proceeds from sale of Ralph & Kacoo's --- 20,473
Acquisition of business --- (5,697)
Purchases of property, plant and equipment (6,742) (10,096)
Proceeds from sales of property, plant and equipment 2,462 751
-------- --------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (4,280) 5,431
FINANCING ACTIVITIES
Payments on long-term debt - net (874) (8,894)
Treasury stock transactions - net 5 (288)
Dividends paid (3,780) (5,041)
-------- --------
NET CASH USED IN FINANCING ACTIVITIES (4,649) (14,223)
-------- --------
Change in cash and cash equivalents --- ---
Cash and cash equivalents at beginning of period --- ---
-------- --------
Cash and cash equivalents at end of period $ --- $ ---
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
<PAGE>
NOTE TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
PICCADILLY CAFETERIAS, INC.
March 31, 2000
NOTE 1 - FINANCIAL STATEMENT 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.
The balance sheet data for June 30, 1999 is derived from audited financial
statements.
Comparative results of operations by periods may be affected by the
timing of the opening of new units and the closing of existing 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 seasonal retail activity.
NOTE 2 - SALE OF RALPH & KACOO'S
On March 30, 1999, the Company completed the sale of the Ralph &
Kacoo's seafood restaurants and related commissary business (Cajun Bayou
Distributors and Management, Inc.) to Cobb Investment Company, Inc. for
$21,314,000 in cash. The transaction resulted in a recorded gain of
$1,556,000, and a net tax benefit of $826,000.
The tax benefit was the result of the sale of the stock of Cajun Bayou
Distributors and Management, Inc. The tax basis in the stock was
$6,057,000 higher than the book basis in the stock due to differences that
were not classified as temporary differences under SFAS 109, and resulted
in a loss on the stock sale for tax purposes when compared to the amount
recorded for financial statement purposes. This tax loss on the stock sale
generated a net overall tax loss on the sale of Ralph & Kacoo's. The
remaining portion of the Ralph & Kacoo's business, a catering facility was
sold on June 1, 1999.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THE MORRISON ACQUISITION
In May 1998, the Company acquired 89% of the common stock of Morrison
Restaurants, Inc. (Morrison) for $5.00 per share. The merger was completed
on July 31, 1998 when the Company purchased the remaining outstanding
Morrison shares for $5.00 per share (the Morrison Acquisition).
Management believes that, in some instances, separate discussion of the
results of operations of the Morrison units is necessary for an
understanding of the Company's results of operations on the whole. The
discussion that follows refers to the units acquired in the Morrison
Acquisition as "Morrison units". Likewise, all other units are referred to
as "Piccadilly units".
The Company began converting Morrison units to Piccadilly-style units
(the Morrison Conversions) in fiscal 1999. As of September 30, 1999 the
Company had completed 112 Morrison Conversions. There were no Morrison
Conversions subsequent to September 30, 1999. Expenses associated with the
Morrison Conversions averaged approximately $40,000 per unit for training-
team labor, new uniforms, repairs, and supplies. Additional costs of
approximately $25,000 per unit, primarily for signage, were capitalized.
Nine Morrison units have not been converted as of March 31, 2000. Three of
these units will continue to operate as a Morrison cafeteria. The
remaining six units are in varying stages of lease renewal negotiations and
the timing for converting these units to Piccadilly-style units is
uncertain. The table below shows the number of Morrison Conversions by
quarter:
Morrison Units Converted in
the Quarter ended
---------------------------
September 30, 1998 12
December 31, 1998 16
March 31, 1999 32
June 30, 1999 39
September 30, 1999 13
December 31, 1999 0
March 31, 2000 0
---------------------------
Total 112
===========================
FISCAL 2000 THIRD QUARTER COMPARED TO FISCAL 1999 THIRD QUARTER
Total net sales for the quarter ended March 31, 2000 were
$110,022,000, down 10.2% from net sales of $122,498,000 reported in last
year's third quarter. Net sales for the third quarter of fiscal 1999
include net sales of $5,646,000 from the Ralph & Kacoo's restaurants, which
were sold on March 30, 1999 (see Note 2). The following table reconciles
total cafeteria sales to same-store cafeteria sales (units that were open
for three full months in both periods) for the third quarters of fiscal
years 2000 and 1999:
<TABLE>
<CAPTION> (SALES IN THOUSANDS)
Three months ended March 31 2000 1999
-------------------- --------------------- SALES
SALES UNITS SALES UNITS CHANGE
-------------------- ----------------------------------
<S> <C> <C> <C> <C> <C>
Total cafeteria sales $ 110,022 245 $ 116,852 260 -5.8%
Less new units (A) (2,796) (6) --- ---
Less closed units (B) (456) (2) (3,912) (23)
------------------- --------------------
Net same-store cafeteria sales $ 106,770 237 $ 112,940 237 -5.5%
=================== ====================
</TABLE>
(A) CAFETERIAS OPENED SINCE DECEMBER 31, 1998.
(B) CAFETERIAS CLOSED SINCE DECEMBER 31, 1998.
The net decrease in same-store sales of 5.5% reflects a decline in
same-store customer traffic of 6.5% combined with a check average increase
of 0.9%. The check average increase results from various price increases
implemented at certain units since March 31, 1999. Management believes
that it will continue to report lower same-store sales as compared to the
prior fiscal year for the remainder of the fiscal year ending June 30,
2000.
Piccadilly customer traffic began trending downward in 1997. The
Company attributes these declines to general patterns of customer traffic
declines experienced in the family-dining sector of the restaurant
industry. Additionally, the Morrison Conversions have adversely affected
customer traffic in the Morrison units. While several Morrison units
increased customer traffic immediately after converting to Piccadilly-style
units, most units suffered customer count declines, and in some markets,
these declines were significant. The largest declines for Morrison units
are in Florida, comprising approximately 31% of the Morrison units and
approximately 62% of the same-store sales decline in the comparative
quarters. The Company attributes these declines to adverse reactions to
the Morrison Conversions by a segment of loyal Morrison customers.
To address declines in customer traffic, the Company tested a sales-
building initiative targeting the Tampa, Florida area during the second and
third quarters. The Tampa area encompasses 14 cafeterias, 9 of which are
Morrison units. That advertising program was designed to increase sales by
addressing customer perceptions of value and convenience. The program
reversed a year-over-year 22.6% customer traffic decline for these units
experienced in the first quarter of fiscal 2000 to a 2.4% customer traffic
increase in the quarter ended March 31, 2000 compared to the same period
last year. The Company is in various stages of developing other sales-
building initiatives.
During the third quarters of fiscal 2000 and 1999, consolidated net
operating income (net sales less cost of sales and other operating
expenses) as a percent of net sales was 6.3% and 5.2%, respectively.
Excluding the operations of Ralph & Kacoo's restaurants in the third
quarter of fiscal 1999, net operating income as a percent of net sales was
4.8%. The following table illustrates cost of sales, other operating
expenses, and general and administrative expense as a percent of net sales
for the comparative periods. The table and the discussion that follows
explain results of operations net of the Ralph & Kacoo's operations in last
year's results.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31 (EXCLUDES RESULTS OF
OPERATIONS RELATING TO THE RALPH & KACOO'S SEAFOOD PERCENT OF NET SALES CHANGE
RESTAURANTS) --------------------
2000 1999
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost of sales 58.4% 60.2% -1.8%
Other operating expenses 35.3% 35.1% 0.2%
General & administrative expense 3.2% 3.5% -0.3%
</TABLE>
Cost of sales as a percent of net sales declined 1.8%. That decline
is a combination of a 1.1% decrease in food cost as a percent of net sales
and a 0.7% decrease in labor costs as a percent of net sales. Food costs
as a percent of net sales improved as food cost efficiency experienced in
Morrison units has begun to more closely match the operations of Piccadilly
units.
Movement in labor costs, as a percent of net sales, is the net result
of a number of factors. Factors that improved performance include:
1. Prices increased July 1999.
2. The tip-wage program implemented in the fourth quarter of fiscal
year 1999 lowered overall wages-per-hour.
3. Until the second quarter of this fiscal year, labor efficiency at
Morrison units did not reflect Piccadilly standards.
4. No Morrison units were converted in the third quarter of this
fiscal year while 32 Morrison units were converted in last year's
third quarter. Labor costs were generally higher for three to four
months following the conversion of a Morrison unit to a Piccadilly-
style unit.
Factors that negatively impacted performance include:
1. Lower year-over-year unit sales volumes to offset fixed labor
costs.
2. Opening team labor costs associated with one new unit opened in the
third quarter of fiscal 2000 compared to no new unit openings in
the third quarter of last fiscal year.
Other operating expense (net of Ralph & Kacoo's related expenses in
the prior fiscal year) decreased $2,172,000. As a percent of net sales,
other operating expense increased 0.2% as a percent of net sales. The net
movement in other operating expenses is the result of several factors.
First, other operating expense in the third quarter last fiscal year
includes costs relating to 32 Morrison Conversions. There were no Morrison
Conversions in the third quarter of this fiscal year. Conversely, the
fixed portion of certain operating costs as a percent of net sales, such as
rent, repairs and maintenance, utilities, and depreciation, have increased
as unit sales decreased.
General and administrative expense (net of Ralph & Kacoo's related
expenses in the prior fiscal year) as a percent of net sales decreased 0.3%
and decreased in absolute dollars by $628,000 due primarily to transitional
costs incurred in the prior year quarter related to the integration of
Morrison-related reporting systems.
Interest expense increased $301,000 as a result of higher rates the
effect of which was partially offset by lower debt levels in the third
quarter compared to the same quarter last year.
NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO NINE MONTHS ENDED MARCH 31,
1999
Total net sales for the nine months ended March 31, 2000 were
$340,516,000, down 10.8% from net sales of $381,809,000 reported in same
nine-month period last year. Net sales for the first nine months of fiscal
1999 include net sales of $17,683,000 from the Ralph & Kacoo's restaurants,
which were sold on March 30, 1999 (see Note 2). The following table
reconciles total cafeteria sales to same-store cafeteria sales (units that
were open for nine full months in both periods) for the nine months ended
March 31, 2000 and 1999.
<TABLE>
<CAPTION> (SALES IN THOUSANDS)
Nine Months Ended March 31 2000 1999
-------------------- --------------------- SALES
SALES UNITS SALES UNITS CHANGE
-------------------- ----------------------------------
<S> <C> <C> <C> <C> <C>
Total cafeteria sales $ 340,516 260 $ 364,126 270 -6.5%
Less new units (A) (6,951) (6) --- ---
Less closed units (B) (2,471) (17) (13,062) (33)
------------------- --------------------
Net same-store cafeteria sales $ 331,094 237 $ 351,064 237 -5.7%
=================== ====================
</TABLE>
(A) CAFETERIAS OPENED SINCE JUNE 30, 1998.
(B) CAFETERIAS CLOSED SINCE JUNE 30, 1998.
The net decrease in same-store sales of 5.7% reflects a decline in
same-store customer traffic of 7.9% combined with a check average increase
of 1.7%. The check average increase results from various price increases
implemented at certain units since March 31, 1999. See the above
discussion, "Fiscal 2000 Third Quarter Compared to Fiscal 1999 Third
Quarter", for related information on same-store sales declines.
During the nine months ended March 31, 2000 and 1999, consolidated net
operating income (net sales less cost of sales and other operating
expenses) as a percent of net sales was 5.1% and 6.5%, respectively.
Excluding the operations of the Ralph & Kacoo's restaurants in the first
three quarters of fiscal 1999, net operating income as a percent of net
sales was 6.2%. The following table illustrates cost of sales, other
operating expenses, and general and administrative expense as a percent of
net sales for the comparative periods. The table and the discussion that
follows explain results of operations net of the Ralph & Kacoo's operations
in last year's results.
<TABLE>
<CAPTION>
NINE MONTHS ENDED MARCH 31 (EXCLUDES RESULTS OF
OPERATIONS RELATING TO THE RALPH & KACOO'S SEAFOOD PERCENT OF NET SALES CHANGE
RESTAURANTS) --------------------
2000 1999
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cost of sales 59.2% 60.1% -0.9%
Other operating expenses 35.8% 33.9% 1.9%
General & administrative expense 3.3% 3.4% -0.1%
</TABLE>
Cost of sales as a percent of net sales decreased 0.9%. That decline
is a combination of a 0.8% decrease in food cost as a percent of net sales
and a 0.1% decrease in labor cost as a percent of net sales. Food costs as
a percent of net sales improved primarily as a result of the July 1999
price increase.
Movement in labor costs, as a percent of net sales, is the net result
of a number of factors. Factors that improved performance include:
1. Prices increased July 1999.
2. The tip-wage program implemented in the fourth quarter of fiscal
year 1999 lowered overall wages-per-hour.
3. Until the second quarter of this fiscal year, labor efficiency at
Morrison units did not reflect Piccadilly standards.
4. 13 Morrison units were converted in the first three quarters of
this fiscal year while 60 Morrison units were converted in first
three quarters of last year. Labor costs were generally higher for
three to four months following the conversion of a Morrison unit to
a Piccadilly-style unit.
Factors that negatively impacted performance include:
1. Lower year-over-year unit sales volumes to offset fixed labor costs.
2. Opening team labor costs associated with six new units opened in the
first nine months of fiscal 2000 compared to no new unit openings in
the first three quarters of last fiscal year.
3. Management staffing levels at Morrison units began to increase
during the second quarter of last fiscal year.
Other operating expense (net of Ralph & Kacoo's related expenses in the
prior fiscal year) decreased $1,212,000. As a percent of net sales, other
operating expense increased 1.9%. The net movement in other operating
expenses is the result of several factors. First, other operating expense
in the three quarters of last fiscal year includes costs relating to 60
Morrison Conversions. There were 13 Morrison Conversions in the first half
of this fiscal year. Conversely, the fixed portion of certain operating
costs as a percent of net sales, such as rent, repairs and maintenance,
utilities, and depreciation, have increased as unit net sales decreased.
Additionally, the Company incurred opening costs for five new cafeterias in
the first half of fiscal 2000. No cafeterias opened in the three quarters
of fiscal 1999.
General and administrative expense (net of Ralph & Kacoo's related
expenses in the prior fiscal year) as a percent of net sales decreased 0.1%
and decreased in absolute dollars by $1,091,000 due to transitional costs
incurred in the prior year related to the integration of Morrison-related
reporting systems and processes combined with the elimination of duplicate
Morrison costs.
Interest expense increased $95,000 as a result of higher rates the
effect of which was substantially offset by lower debt levels this fiscal
year compared to last fiscal year.
TRENDS AND UNCERTAINTIES
Unless the Company experiences additional and unexpected erosion in
net sales, it believes that it will remain in compliance with the terms of
its amended credit facility. It is possible that continuing erosion of
customer traffic at individual units could result in the closing of such
units or additional non-cash charges, including impairment of goodwill,
under SFAS 121. At the present time no impairment adjustments for
Morrison-related goodwill are necessary.
The U.S. Congress is considering proposals to increase the federal
minimum wage. An increase in the federal minimum wage would have an
adverse effect on the Company's operating costs. Historically, the Company
has absorbed minimum wage increases through price increases. The Company
operates in a highly competitive industry and may be unable to transfer all
or a portion of such higher operating costs to its customers.
LIQUIDITY AND CAPITAL RESOURCES
The Company has a $90 million credit facility with a syndicated group
of banks maturing on June 22, 2001. On November 18, 1999 the Company and
its lenders amended the credit facility. The amended credit facility
provides that beginning with the third fiscal quarter ending March 31,
2000, the Board may only declare a dividend to the extent of the Company's
net income for the prior fiscal quarter. Accordingly, the Company's
ability to declare dividends in compliance with the terms of the amended
credit facility will be determined by its future operating performance.
On February 7, 2000, the Board elected to suspend the Company's
regular quarterly dividend of $.12 per share. The suspension of the
dividend will save approximately $1.26 million per quarter. The Company's
net income of $0.14 per share for the quarter ended December 31, 1999
would have allowed the declaration of a dividend under the terms of its
restructured credit facility. The Board concluded that until the Company
had demonstrated a sustained operating performance that would support a
dividend that could be safely maintained, suspension of the dividend was
the prudent course of action.
Management believes that its cash from operations, together with
remaining credit available under the amended facility, will be sufficient
to provide for the Company's operational needs for the foreseeable future.
At March 31, 2000, approximately $4,241,000 was available under this
facility.
FORWARD-LOOKING STATEMENTS
Forward-looking statements regarding management's present plans or
expectations for new unit openings, remodels, other capital expenditures,
the financing thereof, and disposition of impaired units involve risks and
uncertainties relative to return expectations and related allocation of
resources, and changing economic or competitive conditions, as well as the
negotiation of agreements with third parties, which could cause actual
results to differ from present plans or expectations, and such differences
could be material. Similarly, forward-looking statements regarding
management's present expectations for operating results involve risks and
uncertainties relative to these and other factors, such as advertising
effectiveness and the ability to achieve cost reductions, which also would
cause actual results to differ from present plans. Such differences could
be material. Management does not expect to update such forward-looking
statements continually as conditions change, and readers should consider
that such statements speak only as the date hereof.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company is exposed to changes in short-term interest rates related
to its $90,000,000 credit arrangement. If the variable rates on the
Company's credit arrangement were to increase by 1% from the rate at March
31, 2000 and the Company had borrowed the maximum amount available under
its senior credit facility ($77.0 million) for the remaining quarter of
fiscal 2000, then, solely as a result of the increase in interest rates,
the Company's interest expense would increase, resulting in a $122,000
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 in 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.
<PAGE>
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. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3. (a) Articles of Incorporation of the Company, as restated
through March 12, 1999.(1)
(b) By-laws of the Company, as amended and restated through March
12, 1999.(1)
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.
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)
BY: /S/RONALD A. LABORDE
--------------------
Ronald A. LaBorde
President and Chief Executive Officer
04/19/00
/s/ Ronald A. LaBorde 04/19/00
Ronald A. LaBorde, President, Chief Executive Officer, and Date
Director
/s/ Mark L. Mestayer 04/18/00
Mark L. Mestayer, Executive Vice President & Chief Financial Date
Officer (Principal Financial Officer)
/s/ W. Scott Bozzell 04/18/00
W. Scott Bozzell, Executive Vice President & Controller Date
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Statements for the period ending March 31, 2000 and is qualified in its entirety
by reference to such financial statements. Amounts are in thousands of
dollars.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 936
<ALLOWANCES> 0
<INVENTORY> 12,671
<CURRENT-ASSETS> 27,347
<PP&E> 307,671
<DEPRECIATION> 139,442
<TOTAL-ASSETS> 218,229
<CURRENT-LIABILITIES> 43,196
<BONDS> 0
0
0
<COMMON> 19,141
<OTHER-SE> 58,464
<TOTAL-LIABILITY-AND-EQUITY> 218,229
<SALES> 340,516
<TOTAL-REVENUES> 340,516
<CGS> 201,426
<TOTAL-COSTS> 334,108
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,064
<INCOME-PRETAX> 1,344
<INCOME-TAX> 609
<INCOME-CONTINUING> 735
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 735
<EPS-BASIC> .07
<EPS-DILUTED> .07
</TABLE>
