<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For Quarterly period ended March 31, 1996
[ ] 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: 1-6192
GROUND ROUND RESTAURANTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
New York 13-5637682
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
35 Braintree Hill Office Park, Braintree, Massachusetts 02184
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (617) 380-3100
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 [ ]
Number of shares of Common Stock, $ .16 2/3 par value outstanding as of May 10,
1996: 11,173,421.
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PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GROUND ROUND RESTAURANTS, INC.
<TABLE>
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1996 AND OCTOBER 1, 1995
(Dollars in thousands, except per share amounts)
<CAPTION>
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 1,063 $ 2,425
Receivables, net of allowances for uncollectible
accounts of $991 and $797 in 1996 and 1995, respectively 1,515 1,147
Income tax refunds receivable 1,541
Inventories 2,068 2,511
Prepaid expenses and other current assets 1,923 2,115
-------- --------
Total current assets 6,569 9,739
Property and equipment:
Land 9,832 10,240
Buildings and leasehold improvements 118,817 119,749
Machinery and equipment 40,096 40,399
-------- --------
168,745 170,388
Accumulated depreciation and amortization 58,416 53,484
-------- --------
Property and equipment, net 110,329 116,904
Other assets 18,073 18,713
-------- --------
Total Assets $134,971 $145,356
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
Accounts payable $ 7,967 $ 5,933
Accrued expenses 11,931 11,190
Current portion of long-term debt and capital lease obligations 8,822 8,277
-------- --------
Total current liabilities 28,720 25,400
Long-term debt and capital lease obligations 44,858 50,303
Deferred income taxes 1,120
Other long-term liabilities 8,275 8,849
STOCKHOLDERS' EQUITY:
Preferred Stock, undesignated, par value $100 per share;
authorized 30,000 shares; none issued
Common Stock, par value $.16 2/3 per share: authorized 35,000,000
shares in 1996 and 1995; issued 11,174,000 in 1996 and 1995 1,862 1,862
Additional paid-in capital 57,883 57,883
Accumulated deficit (6,627) (61)
-------- --------
Total stockholders' equity 53,118 59,684
Total Liabilities and Stockholders' Equity $134,971 $145,356
======== ========
</TABLE>
See notes to consolidated financial statements.
1
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GROUND ROUND RESTAURANTS, INC.
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
<CAPTION>
13 WEEKS ENDED 26 WEEKS ENDED
March 31, April 2 March 31, April 2,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE $54,958 $56,937 $109,683 $119,335
------- ------- -------- --------
COSTS AND EXPENSES:
Cost of products sold 51,185 48,818 101,408 100,879
Selling, general and administrative 4,227 4,175 8,283 8,684
Depreciation and amortization 2,958 3,781 6,171 7,446
Interest expense, net 1,192 1,276 2,450 2,479
Other expense 125 849 125 1,629
------- ------- -------- --------
59,687 58,899 118,437 121,117
------- ------- -------- --------
Loss before taxes (4,729) (1,962) (8,754) (1,782)
Income tax benefit (1,183) (628) (2,189) (570)
------- ------- -------- --------
NET LOSS $(3,546) $(1,334) $ (6,565) $ (1,212)
======= ======= ======== ========
Weighted average common shares
outstanding 11,173 11,114 11,173 11,114
PER SHARE DATA:
Net loss per common share $ (.32) $ (.12) $ (.59) $ (.11)
======= ======= ======== ========
</TABLE>
See notes to consolidated financial statements.
2
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GROUND ROUND RESTAURANTS, INC.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<CAPTION>
26 Weeks Ended 26 Weeks ended
March 31, 1996 April 2, 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(6,565) $ (1,212)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 6,382 7,626
Deferred taxes (2,110) (1,362)
Other, net 96
Change in operating assets and liabilities:
Accounts receivable (368) 122
Income tax refunds receivable 1,541
Inventories and prepaid expenses 913 642
Accounts payable and other liabilities 2,850 (709)
------- --------
Net cash provided by operating activities 2,643 5,203
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (975) (7,177)
Proceeds from sales of property and equipment 1,793 3,524
Purchase of liquor license (16)
Sale of liquor licenses 293 84
Deposits received 172
Pre-opening costs (302)
------- --------
Net cash provided by (used in) investing activities 1,111 (3,715)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term borrowings 30,200
Payments of long-term borrowings (4,900) (32,136)
Proceeds from issuance of common stock 200
Payments of deferred debt costs (216) (7)
------- --------
Net cash used in financing activities (5,116) (1,743)
------- --------
NET DECREASE IN CASH (1,362) (255)
Cash and cash equivalents at beginning of period 2,425 1,457
------- --------
Cash and cash equivalents at end of period $ 1,063 $ 1,202
======= ========
</TABLE>
See notes to consolidated financial statements
3
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GROUND ROUND RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED MARCH 31, 1996 AND APRIL 2, 1995
(Unaudited)
1. BASIS OF PRESENTATION
In the opinion of Management, the accompanying unaudited Consolidated
Financial Statements contain all adjustments, which are of a normal
recurring nature, necessary to present fairly Ground Round Restaurants,
Inc.'s (the "Company") financial position as of March 31, 1996 and the
results of operations for the 13-week and 26-week periods ended March 31,
1996 and April 2, 1995. These financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such regulations, although the Company believes the disclosures provided
are adequate to prevent the information presented from being misleading. It
is suggested that these financial statements be read in conjunction with
the financial statements and notes thereto included in the Company's annual
report on Form 10-K for the year ended October 1, 1995 and Form 10-Q for
the quarterly period ended December 31, 1995.
Certain items in specific captions in the accompanying Consolidated
Financial Statements have been reclassified for comparative purposes.
2. COST OF PRODUCTS SOLD
<TABLE>
Cost of products sold is comprised of the following:
<CAPTION>
Three Months Ended Six Months Ended
March 31, April 2, March 31, April 2,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Food and beverage costs $19,360 $17,958 $ 38,169 $ 37,597
Labor Costs 19,364 18,945 38,693 39,015
Other Costs 12,461 11,915 24,546 24,267
------- ------- -------- --------
$51,185 $48,818 $101,408 $100,879
======= ======= ======== ========
</TABLE>
3. LITIGATION
The Company has been named in a number of separate claims brought by former
employees alleging that the Company engaged in discriminatory practices
including those based on age or sex. Plaintiffs bringing claims of
employment discrimination, such as those being brought against the Company,
generally are entitled to have their claims tried by a jury and such claims
may result in punitive damage awards. Most of the proceedings against the
Company are still in the discovery phase. Management believes that the
discrimination claims against the Company are without merit and the Company
is actively defending the claims. Management does not expect that the
resolution of these matters will have a material adverse effect on the
consolidated financial position of the Company.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
The Company operated 147 and franchised 44 family-oriented, full service casual
dining restaurants at March 31, 1996.
For purposes of this discussion and analysis, the 26-week periods ended March
31, 1996 and April 2, 1995 are referred to as the first six months ended 1996
and 1995, respectively. The 13-week periods ended March 31, 1996 and April 2,
1995 are referred to as the second quarter of 1996 and 1995, respectively.
COMPARATIVE RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31,
1996 AND APRIL 2, 1995.
<TABLE>
The following table sets forth the percentages which the items in the Company's
Consolidated Statements of Operations bear to total revenue unless otherwise
indicated:
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
March 31, April 2, March 31, April 2,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Restaurant revenue 99.3% 99.1% 99.2% 99.1%
Franchise revenue .7 .9 .8 .9
----- ----- ----- -----
Total Revenue 100.0 100.0 100.0 100.0
Cost of products sold (1) 93.8 86.5 93.2 85.3
Selling, general & administrative 7.7 7.3 7.6 7.3
Depreciation and amortization 5.4 6.6 5.6 6.2
Interest expense, net 2.2 2.2 2.2 2.1
Other expense .2 1.5 .1 1.4
Loss before taxes (8.6) (3.4) (8.0) (1.5)
Income tax benefit (2.1) (1.1) (2.0) (.5)
Net loss (6.5)% (2.3)% (6.0)% (1.0)%
<FN>
(1) As a percentage of Company-operated restaurant revenue.
</TABLE>
RESTAURANT REVENUE: Restaurant revenue totaled $54.6 million for the quarter and
$108.8 million for the six months ended March 31, 1996, versus $56.4 million and
$118.3 million for the second quarter and six months ended April 2, 1995.
Restaurant revenue is comprised of comparable restaurant revenue (revenue
generated from restaurants open during all of both fiscal years) and
non-comparable restaurant revenue.
Comparable restaurant revenue decreased 8.3% and .1% during the first and second
quarters of fiscal 1996, respectively; comparable restaurant revenue declined
4.3% for the six months ended March 31, 1996. Management believes that the
decline during the first quarter of fiscal 1996 was largely attributable to the
menu introduced by the Company in November 1994, which reduced the number of
menu items offered to approximately 50. In order to increase guest traffic, in
December 1995, the Company introduced an expanded, newly designed menu featuring
more than 150 items. Management believes that largely as a
5
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consequence of the new menu, comparable restaurant revenue increased over the
respective prior periods during the months of February and March, after a
decline in January as a result of severe winter weather in the markets where the
Company operates.
Non-comparable restaurant revenue declined $1.8 million in the second quarter
and decreased $4.8 million for the six months ended March 31, 1996,
respectively, over the same periods ended April 2, 1995. The decline for the
second quarter was the result of the sale or closing of 11 restaurants during
the last nine months of fiscal 1995 and the sale or closing of six restaurants
during the six months ended March 31, 1996, slightly offset by the opening of
four new restaurants during the period. The decrease for the six months ended
March 31, 1996 is attributable to the sale or closing of 16 restaurants during
fiscal 1995 and the sale or closing of six restaurants during the six months
ended March 31, 1996, slightly offset by the opening of four new restaurants
during the period.
FRANCHISE REVENUE: The Company's franchise base consisted of 44 restaurants
during the second quarter of 1996 and 1995. Net revenue from franchise
restaurants (consisting of royalties and initial franchise fees) was
approximately $352,000 for the second quarter and $805,000 for the six months
ended March 31, 1996, respectively, versus approximately $447,000 and $931,000
for the second quarter and six months ended April 2, 1995, respectively. One
initial franchise fee of $40,000 was recognized in the second quarter of 1995.
COST OF PRODUCTS SOLD: Cost of products sold consists of both food and beverage
costs and restaurant operating expenses. Food and beverage costs totaled 35.5%
and 35.1% of Company-operated restaurant revenue in the second quarter and six
months ended March 31, 1996, respectively, versus 31.8% for both the second
quarter and six months ended April 2, 1995. Restaurant operating expenses were
58.3% and 58.1% of Company-operated restaurant revenue in the second quarter and
six months ended March 31, 1996, respectively, versus 54.7% and 53.5% for the
second quarter and six months ended April 2, 1995.
Food and beverage costs as a percentage of Company-operated restaurant revenue
increased by 3.7% and 3.3% for the second quarter and six months ended March 31,
1996, respectively, as the Company implemented a substantially re-designed menu
during the first week of December 1995. The increase can be attributed to higher
product costs associated with new menu items, including increases in portion
sizes on various menu items.
Restaurant operating expenses as a percentage of Company-operated restaurant
revenue increased 3.4% and 4.8% for the second quarter and six months ended
March 31, 1996, respectively. The increases have primarily resulted from
increases in labor costs of 1.9% for the second quarter and 2.6% for the six
months ended March 31, 1996. This increase was directly attributable to
increased kitchen staffing during the implementation of the new menu, as the
number of menu items increased from approximately 50 items to over 150 items.
Moreover, increases in management labor base pay have been enacted in order to
remain competitive within the industry. Other costs increased 1.7% for the
second quarter and 2.0% for the six months ended March 31, 1996, mainly as a
result of costs associated with the implementation of the new menu, including
increases in menu design and printing, plateware and supplies. Most other costs
remained at a constant dollar level due to the fixed nature of certain costs
associated with operating a restaurant. These increases were partially offset by
a decrease in percentage (contingent) rent expense.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES: Selling, general and
administrative expenses were 7.7% and 7.6% of total revenue for the second
quarter and six months ended March 31, 1996 as compared with 7.3% for the same
periods in 1995. Selling expenses, comprised of advertising and development and
production costs for point of purchase materials were .4% and .5% of total
revenue in the second quarter and six months ended March 31, 1996, respectively,
versus 1.2% and 1.3% for the second quarter and six months ended April 2, 1995.
The decrease in selling expense is primarily due to the Company's suspension of
radio
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and media-based advertising. Radio and media-based advertising totaled
approximately $.6 million and $1.4 million during the second quarter ended and
the six months ended April 2, 1995.
General and administrative costs, comprised of restaurant manager training
expenses, regional overhead and corporate administrative costs were 7.2% and
7.0% of total revenue in the second quarter and six months ended March 31, 1996,
respectively, versus 6.1% and 6.0% for the same periods in 1995. The increase
represents additional training expenses incurred in order to properly staff the
restaurants at the management level, coupled with the addition of three regional
directors and two divisional vice presidents in order to reduce spans of
control.
DEPRECIATION AND AMORTIZATION: Depreciation and amortization expenses were 5.4%
and 5.6% of total revenue in the second quarter and six months ended March 31,
1996, respectively, versus 6.6% and 6.2% for the second quarter and six months
ended April 2, 1995. The decrease is the direct result of the sale or closing of
16 restaurants during fiscal 1995 and six restaurants during the first six
months of 1996.
OTHER EXPENSE: The second quarter and six months ended March 31, 1996 reflects a
charge of $125,000 as a result of consulting expenses associated with the
Company's bank restructuring (see "Liquidity and Capital Resources" section
below). The second quarter of 1995 reflects $ .8 million in expenses related to
the resignation of the Company's President, Chief Executive Officer and Chairman
of the Board, and the six months ended April 2, 1995 also reflects $ .8 million
in expenses related to the termination of the Merger Agreement among the
Company, GRR Acquisition Corp. and GRR, Inc., which the parties entered into on
August 23, 1994 and which was terminated on January 13, 1995.
INTEREST EXPENSE: Interest expense decreased by $84,000 and $29,000 for the
second quarter and six months ended March 31, 1996 as a result of a reduction in
total debt outstanding (see "Liquidity and Capital Resources" section below).
The Company's weighted average borrowing rates were 7.9% for both the second
quarter and six months ended March 31, 1996, versus 7.8% and 7.4% for the same
periods in 1995, repectively.
INCOME TAXES: The Company's effective income tax rate was 25% and 32% in the
second quarter and six months ended March 31, 1996 and April 2, 1995,
respectively.
NET LOSS: As a result of the above, the Company reported a net loss of $3.5
million and $6.6 million, or $.32 per share and $.59 per share in the second
quarter and the first six months ended March 31, 1996, respectively, compared to
a net loss of $1.3 million and $1.2 million, or $.12 per share and $.11 per
share in the second quarter and first six months ended April 2, 1995,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
A significant amount of the Company's restaurant sales are for cash, with the
remainder made with credit cards that are generally realized in cash within a
few days. Because the Company does not have significant accounts receivable or
inventories and pays its expenses within normal terms, the Company operates with
working capital deficits as is typical in the restaurant industry. The Company
had working capital deficits of $22.2 million and $15.7 million as of March 31,
1996 and October 1, 1995, respectively.
Net cash provided by operating activities totaled $2.6 million in the first six
months of 1996 as compared with $5.2 million in the first six months of 1995.
The decrease is attributed to the Company's net loss of $6.6 million for the six
months ended March 31, 1996 compared to the net loss of $1.2 million for the
first six months ended April 2, 1995. The decrease was partially offset by the
receipt of an income tax refund and by an increase in accounts payable as a
result of a change in payment terms negotiated with the Company's
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vendors. The Company incurred capital expenditures totaling $975,000 for
restaurant capital maintenance during the first six months of 1996, and $7.2
million for restaurant capital maintenance, remodeling and new restaurant
construction during the first six months of 1995. Net cash provided by
operations plus proceeds from sales of approximately $1.8 million funded 1996
capital expenditures and provided for the repayment of $4.9 million in
borrowings under the Company's current credit facility with its banks (the
"Credit Facility"). On March 31, 1996 and October 1, 1995, the Company's
borrowings under its Credit Facility were $49.6 million and $54.1 million,
respectively. The Company currently has fully utilized the revolving portion of
its credit facility. Quarterly principal payments under the Credit Facility
began in October 1995 and are scheduled through July 2000.
The Credit Facility obligates the Company to hedge its interest rate risk on
approximately 50% of its total term borrowings. The Company has entered into
interest rate cap agreements solely to hedge its interest rate risk as required
by the Credit Facility. In 1996 and 1995, the Company entered into interest rate
cap agreements under which the maximum base interest rate of its LIBOR-based
payments would have been 12.0% and 7.0%, respectively. The interest rate cap
agreements had an immaterial effect on the Company's interest expense during the
first six months of 1996 and 1995.
The Credit Facility contains certain restrictions on the conduct of the
Company's business including a prohibition on the payment of dividends. In
addition, the Company is required to comply with certain financial covenants,
including maintenance of minimum net worth and earnings before interest, taxes,
depreciation and amortization, and limitations on capital expenditures.
As a consequence of the second quarter results, the Company was not in
compliance with the net worth or the earnings before interest, taxes,
depreciation and amortization covenants as contained in the Fifth Amendment of
the Credit Facility, dated February 12, 1996. The Company has obtained a waiver
with respect to such non-compliance as part of the Sixth Amendment to the Credit
Facility (the "Sixth Amendment"), dated April 12, 1996. In addition to the
waiver, the Sixth Amendment postpones a principal payment of $1.8 million, due
April 15, 1996, until May 31, 1996, and accelerates payment of a previously
deferred amendment fee totaling approximately $.2 million incurred by the
Company in connection with the Fifth Amendment to the Credit Facility. The
Company has entered into discussions with its banks to restructure its Credit
Facility. While Management believes its Credit Facility will be restructured in
a manner that will be satisfactory to the Company and its banks, there can be no
assurance in this regard.
The Company expects to incur approximately $3.0 million in capital expenditures
during fiscal 1996. Management believes that existing cash, net cash provided by
operating activities, and proceeds from the sale of restaurant locations will be
sufficient to meet operating needs, fund anticipated capital expenditures and
service debt requirements, assuming that the Credit Facility is restructured,
during fiscal 1996.
The effect of inflation has not been a factor upon either the operations or
financial condition of the Company. The Company's business is not significantly
seasonal in nature.
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PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
<TABLE>
The following nominees for the Board of Directors, each to be elected
for the ensuing fiscal year and until his successor is elected and
qualified, were elected at the Annual Meeting of Shareholders on
January 23, 1996:
<CAPTION>
FOR WITHHELD
--- --------
<S> <C> <C>
Daniel R. Scoggin 10,250,242 99,392
John A. Mistreta 9,989,142 360,492
Christian R. Guntner 10,234,742 114,892
Joseph Schollenberger 10,004,092 345,542
James R. Olson 10,256,742 92,892
Fred H. Beaumont, Jr. 10,234,142 115,492
Allan D. Weingarten 10,243,242 106,392
</TABLE>
The proposal to approve the Amended and Restated 1989 Stock Option
Plan so as to conform to the 1992 Equity Incentive Plan was approved
at the Annual Meeting of Shareholders on January 23, 1996:
FOR WITHHELD
--- --------
9,344,329 896,868
No other matters were submitted to a vote of security holders.
ITEM 5. OTHER INFORMATION
On April 12, 1996, the Company entered into the Sixth Amendment to
the Amended and Restated Credit Agreement. See the "Liquidity and
Capital Resources" section of the Management's Discussion and
Analysis of Financial Condition and Results of Operations.
<TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<CAPTION>
(a) Exhibits Title
-------- -----
<S> <C>
10.19 Fifth Amendment, dated as of February 12, 1996, to the Credit
Agreement.
10.20 Sixth Amendment, Waiver and Deferral, dated as of April 12,
1996, to the Credit Agreement.
10.21 Waiver, dated as of April 12, 1996, to the Credit Agreement.
</TABLE>
(b) No reports on Form 8-K were filed during the second quarter of
fiscal 1996.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GROUND ROUND RESTAURANTS, INC.
Date: May 14, 1996 By: /s/ Michael R. Jorgensen
------------------------
Michael R. Jorgensen
Senior Vice President, Chief Financial
Officer and Treasurer
duly authorized
10
<PAGE> 1
Exhibit 10.19
FIFTH AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
FIFTH AMENDMENT (this "AMENDMENT"), dated as of February 12, 1996, to the
Amended and Restated Credit Agreement, dated as of October 8, 1993, as amended
by a First Amendment, dated as of January 20, 1994, and a Second Amendment,
dated as of February 10, 1995, and a Third Amendment, dated as of May 10, 1995,
and a Fourth Amendment, dated as of November 22, 1995 (as so amended, the
"CREDIT AGREEMENT"), among The Ground Round, Inc. (the "FIRST BORROWER"), a
Delaware corporation, GR of Minn., Inc., a Delaware corporation (the "SECOND
BORROWER", and together with the First Borrower, the "BORROWERS"), the banks
named therein (the "BANKS"), The Bank of New York, as Agent (the "Agent") and
Chemical Bank, as Co-Agent.
PRELIMINARY STATEMENTS:
A. The Credit Agreement amended and restated the Amended and Restated
Credit Agreement, dated as of April 26, 1992, among the Borrowers, the banks
named therein and Citibank, N.A., as original agent.
B. The Borrowers have requested that the Agent and the Lenders waive the
EBITDA covenant for the first quarter of fiscal year 1996.
C. The Borrowers desire to amend the Credit Agreement to (i) permit the
Borrowers to defer payment of the proceeds of certain asset sales until April
15, 1996, (ii) provide for an additional information covenant providing for
bimonthly cash flow forecasts and (iii) prohibit Eurodollar Rate Advances
maturing after April 15, 1996.
D. The Lenders and the Agent are willing to grant the waiver and to amend
the Credit Agreement with respect to the foregoing.
E. Unless otherwise defined herein, all terms defined in the Credit
Agreement shall be used herein as therein defined.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Waiver.
------
Subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Agent and the Lenders hereby waive the Borrowers'"
compliance with the EBITDA covenant in
<PAGE> 2
Section 5.01(v) of the Credit Agreement for the first fiscal quarter of 1996.
SECTION 2. Amendments to Credit Agreement.
------------------------------
The Credit Agreement is, effective as of the date hereof, subject to the
satisfaction of the conditions precedent set forth in Section 3 below, hereby
amended as follows:
(a) Section 1.01 is hereby amended by inserting the following new
definition:
"'FIFTH AMENDMENT': means the Fifth Amendment, dated as of February
12, 1996, to this Agreement".
(b) Section 1.01 is hereby further amended by inserting the following new
subsection (e) at the end of the definition of "INTEREST PERIOD":
"(e) notwithstanding anything to the contrary above, neither Borrower
may select any Interest Period that ends after April 15, 1996."
(c) Section 2.05(b) (ii) is hereby amended by inserting the following at
the end of the first sentence thereof following the second proviso:
"PROVIDED, FURTHER, HOWEVER, that with respect to the sale of the two
restaurants located at Madeira, Ohio, and Worcester, Massachusetts,
respectively, the Borrowers may defer payment of Net Cash Proceeds
until April 15, 1996 on which date 75% of Net Cash Proceeds of said
sales shall be paid by the Borrowers to the Agent for application
pursuant to this subsection, it being understood that any amount held
by the Agent on the date of the Fifth Amendment pursuant to subsection
(viii) of this Section 2.05(b) with respect to the sale of the
restaurant at Madiera, Ohio shall be released to the Borrowers."
(d) Section 2.07 is hereby amended by adding a new subsection (d) thereto
to read as follows:
"(d) AMENDMENT FEE. The Borrowers agree to pay to the Agent for the
account of the Lenders which executed the Fifth Amendment, a fee in
the amount of 3/8 of 1% on the amount of each such Lender's Commitment
as set forth in Schedule I hereto, payable on the final principal
payment date hereunder, whether at stated maturity, by acceleration or
otherwise."
(e) Section 5.01(t) is amended by adding a new subsection (xxi) thereto to
read as follows:
"(xxi) on the 15th and 30th of each calendar month, or if such date is
not a Business Day, the closest immediately preceding or succeeding
Business Day
<PAGE> 3
occurring in such month, a cash flow forecast on a 60 day rolling
basis for the immediately succeeding 60 day period following the date
of such forecast in substantially the same form as the cash flow
forecasts previously submitted to the Agent.
SECTION 3. Conditions of Effectiveness.
---------------------------
This Amendments shall become effective as of the date hereof, PROVIDED,
that:
(a) the Borrowers shall have retained a financial consultant satisfactory
to the Agent and the Lenders on or before February 16, 1996, and the Borrowers
agree to permit the Agent and the Lenders to discuss the Company's financial
condition and operations directly with such consultant, and
(b) the Agent shall have received counterparts of (i) this Amendment
executed by the Borrowers, the Lenders and the Agent, (ii) the Consent appended
hereto (the "CONSENT") executed by each of the Guarantors, and (iii) such other
documents as the Agent shall reasonably request.
SECTION 4. Representations and Warranties.
------------------------------
The Borrowers hereby (a) reaffirm and admit the validity and enforceability
of the Loan Documents and all of their obligations thereunder, (b) agree and
admit that they have no defenses to or offsets against any of their obligations
to the Agent or any Lender under the Loan Documents, and (c) represent and
warrant that there exists no Default or Event of Default and that the
representations and warranties contained in the Credit Agreement are true and
correct on and as of the date hereof.
SECTION 5. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import, and each reference in the other
Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby;
(b) Except as specifically amended or waived above, the Credit Agreement
and the Notes, and all other Loan Documents, shall remain in full force and
effect and are hereby ratified and confirmed. Without limiting the generality of
the foregoing, the Collateral Documents and all Collateral described therein
shall continue to secure the payment of the obligations of the Borrowers
thereunder, under the Credit Agreement, as amended hereby, and under the Notes
and Other Loan Documents; and
(c) The execution, delivery and effectiveness of this Amendment shall not,
except and expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Agent under any of the Loan Documents, nor,
<PAGE> 4
except as provided herein, constitute a waiver of any provision of any of the
Loan Documents.
SECTION 6. Costs and Expenses.
------------------
The Borrowers agree to pay on demand all reasonable costs and expenses of
the Agent in connection with the arranging, preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including the reasonable fees and expenses of Emmet, Marvin
& Martin, LLP, special counsel for the Agent, with respect thereto, and of local
counsel, if any, who may be retained by said special counsel with respect
thereto.
SECTION 7. Counterparts.
------------
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be an
original and all of which together shall constitute but one and the same
document.
SECTION 8. Governing Law.
-------------
This Amendment is intended to be performed in the State of New York and
shall be construed and is enforceable in accordance with, and shall be governed
by, the internal laws of the State of New York without regard to principles of
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
THE GROUND ROUND, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Senior V.P., CFO & Treasurer
GR OF MINN., INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Vice President & Treasurer
THE BANK OF NEW YORK,
individually and as Agent
By:
-----------------------------------
Name:
Title:
<PAGE> 5
CHEMICAL BANK, individually and
as Co-Agent
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
-----------------------------------
Name:
Title:
NBD BANK
By:
-----------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------------
Name: Alan Sidrane
Title: Vice President
CREDIT LYONNAIS CAYMAN ISLAND
By:
-----------------------------------
Name:
Title: Authorized Signatory
<PAGE> 6
CONSENT OF GUARANTORS
DATED AS OF FEBRUARY 12, 1996
The undersigned, as the Guarantors referred to in the foregoing Fifth
Amendment, dated as of February 12, 1996, to the Amended and Restated Credit
Agreement, dated as of October 8, 1993, as amended by a First Amendment, dated
as of January 20, 1994, and a Second Amendment, dated as of February 10, 1995,
and a Third Amendment dated as of May 10, 1995, and a Fourth Amendment dated as
of November 22, 1995 among The Ground Round, Inc., GR of Minn., Inc., the banks
named therein, The Bank of New York, as Agent, and Chemical Bank as Co-Agent,
each hereby consents to the foregoing Amendment and hereby confirms and agrees
that, notwithstanding the effectiveness of said Amendment, (i) the Guaranty and
each Collateral Document in effect on the date hereof to which it is party are,
and shall continue to be, in full force and effect and are hereby confirmed and
ratified in all respects, except that, upon the effectiveness of, and after the
date of, said Amendment, all references in the Guaranty and each such Collateral
Document to the Credit Agreement shall mean the Credit Agreement as amended by
said Amendment and (ii) such Collateral Documents consisting of security
agreements and all collateral described therein do, and shall continue to,
secure the payments by the Borrowers referred to in said Amendment of their
obligations under the Credit Agreement, as amended by said Amendment, and under
the Notes.
GRH OF NJ, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Senior V.P., CFO & Treasurer
GROUND ROUND HOLDINGS, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Vice President & Treasurer
GROUND ROUND RESTAURANTS, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Vice President & Treasurer
G.R. GLENDLOC, INCORPORATED
By:
-----------------------------------
Name: Robin L. Moroz
<PAGE> 7
-----------------------------------
Title: Vice President &
Assistant Secretary
GROUND ROUND OF BALTIMORE, INC.
By:
-----------------------------------
Name: Robin L. Moroz
Title: Vice President &
Assistant Secretary
GRXR OF BEL AIR, INC.
By:
-----------------------------------
Name: Robin L. Moroz
Title: Vice President &
Assistant Secretary
GRXR OF FREDERICK, INC.
By:
-----------------------------------
Name: Robin L. Moroz
Title: Vice President &
Assistant Secretary
GRXR OF HAGERSTOWN, INC.
By:
-----------------------------------
Name: Robin L. Moroz
Title: Vice President &
Assistant Secretary
<PAGE> 1
Exhibit 10.20
SIXTH AMENDMENT, WAIVER AND DEFERRAL TO
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
SIXTH AMENDMENT, WAIVER AND DEFERRAL (this "AMENDMENT"), dated as of April
12, 1996, to the Amended and Restated Credit Agreement, dated as of January 20,
1994, a Second Amendment, dated as of February 10, 1995, a Third Amendment,
dated as of May 10, 1995, a Fourth Amendment, dated as of November 22, 1995, and
a Fifth Amendment, dated as of February 12, 1996 (as so amended, the "CREDIT
AGREEMENT"), among the Ground Round, Inc. (the "FIRST BORROWER"), a Delaware
corporation, GR of Minn., Inc., a Delaware corporation (the "SECOND BORROWER",
and together with the First Borrower, the "BORROWERS"), the banks named therein
(The "BANKS"), The Bank of New York, as Agent (the "AGENT") and Chemical Bank,
as Co-Agent.
PRELIMINARY STATEMENTS:
A. The Credit Agreement amended and restated the Amended and Restated
Credit Agreement, dated as of April 26,1992, among the Borrowers, the banks
named therein and Citibank, N.A., as original agent.
B. The Borrowers have requested that the Agent and the Lenders waive the
EBITDA covenant for the second quarter of fiscal year 1996.
C. The Borrowers desire to amend the Credit Agreement to (i) permit the
Borrowers to defer payment of the principal of the Tranche A Term Advances due
and payable on April 15, 1996 to May 31, 1996, (ii) permit the Borrowers to
defer payment of the proceeds of certain asset sales from April 15, 1996 to May
31, 1996, (iii) prohibit Eurodollar Rate Advances maturing after May 31, 1996,
and (iv) terminate the remaining unused portions of the Revolving Commitments.
D. The Lenders and the Agent are willing to grant the waiver and to amend
the Credit Agreement with respect to the foregoing subject to the terms and
conditions contained herein.
E. Unless otherwise defined herein, all terms defined in the Credit
Agreement shall be used herein as therein defined.
In consideration of the covenants, conditions and agreement hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Deferrals.
---------
Subject to the satisfaction of the conditions set forth in Section 4 hereof
and so long as no Event of Default shall have occurred and be continuing under
the Credit Agreement, the Agent and the Lenders hereby agree to permit the
Borrowers (a) to defer to May 31, 1996 the payment of the principal of the
Tranche A Term
<PAGE> 2
Advances that are due and payable on April 15, 1996 and (b) to defer to May 31,
1996 the payment of 75% of Net Cash Proceeds of the sale of the two restaurants
located at Madeira, Ohio and Worcester, Massachusetts, respectively, for
application pursuant to Section 2.05 (b) (ii) of the Credit Agreement. The
failure of the Borrowers to deliver to the Agent and the Lenders a business plan
(in form and substance satisfactory to the Agent and the Lenders in their sole
discretion) by April 30, 1996 shall constitute an immediate and automatic Event
of Default (without the need for the giving of notice or lapse of time or both).
SECTION 2. Waiver.
------
Subject to the satisfaction of the conditions precedent set forth in
Section 4 below, the Agent and the Lenders hereby waive the Borrowers'
compliance with the EBITDA covenant in Section 5.01 (v) of the Credit Agreement
for the second fiscal quarter of 1996 provided that EBITDA for such fiscal
quarter shall not be less than ($800,000).
SECTION 3. Amendments to Credit Agreement.
------------------------------
The Credit Agreement is, effective as of the date hereof, subject to the
satisfaction of the conditions precedent set forth in Section 4 below, hereby
amended as follows:
(a) Section 1.01 is hereby amended by inserting the following new
definition.
"'SIXTH AMENDMENT': means the Sixth Amendment, dated as of April 12,
1996, to this Agreement".
(b) Section 1.01 is hereby amended by deleting subsection (e) at the end of
the definition of "INTEREST PERIOD" and inserting in lieu thereof the following
new subsection (e):
"(e) notwithstanding anything to the contrary above, neither Borrower
may select any Interest Period that ends after May 31, 1996."
(c) Section 2.04 is hereby amended by inserting the following sentence at
the end of subclause (a) thereof:
"Notwithstanding anything to the contrary above, on the effective date
of the Sixth Amendment, the Borrowers shall be deemed to have
permanently reduced and terminated the unused portions of the
Revolving Commitments of the Tranche A Lenders (ratebly in accordance
with the Tranche A Lenders Revolving Commitment percentages) in an
aggregate amount equal to $9,581.58, without notice of the Agent, and
without penalty or premium to the Borrowers."
(d) Section 2.07 is hereby amended by adding a new subsection (e) thereof
to read as follows:
<PAGE> 3
"(e) RESTRUCTURING FEE. The Borrowers agree to pay to the Agent for
the account of the Lenders a fee in the amount of 3/8 of 1% of the
amount of each Lender's Commitment as set forth in Schedule I hereto,
payable on May 31, 1996."
SECTION 4. Conditions of Effectiveness.
---------------------------
This Amendment shall become effective as of the date hereof, PROVIDED,
that:
(a) the Borrowers shall have paid to the Agent for the account of the
Lenders the amendment fee referred to in Section 2.07 (d) of the Credit
Agreement, and
(b) the Agent shall have received counterparts of (i) this Amendment
executed by the Borrowers, the Lenders and the Agent, (ii) the Consent appended
hereto (the "CONSENT") executed by each of the Guarantors, and (iii) such other
documents as the Agent shall reasonably request.
SECTION 5. Representations and Warranties.
------------------------------
The Borrowers hereby (a) reaffirm and admit the validity and enforceability
o the Loan Documents and all of their obligations thereunder, (b) agree and
admit that they have no defenses to or offsets against any of their obligations
to the Agent or any Lender under the Loan Documents, and (c) represent and
warrant that there exists no Default or Event of Default and that the
representations and warranties contained in the Credit Agreement are true and
correct on and as of the date hereof.
SECTION 6. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Amendment, on and after the date hereof,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import, and each reference in the other
Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby;
(b) Except as specifically amended or waived above, the Credit Agreement
and the Notes, and all other Loan Documents, shall remain in full force and
effect and are hereby ratified and confirmed. Without limiting the generality of
the foregoing, the collateral Documents and all Collateral described therein
shall continue to secure the payment of the obligations of the Borrowers
thereunder, under the Credit Agreement, as amended hereby, and under the Notes
and other Loan Documents; and
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Agent under any of the Loan Documents, nor, except
as provided herein, constitute a waiver of any provision of any of the Loan
Documents.
<PAGE> 4
SECTION 7. Costs and Expenses
------------------
The Borrowers agree to pay on demand all reasonable costs and expenses of
the Agent in connection with the arranging, preparation, reproduction, execution
and delivery of this Amendment and the other instruments and documents to be
delivered hereunder, including the reasonable fees and expenses of Zalkin, Rodin
& Goodman, LLP, special counsel for the Agent, with respect thereto, and of
local counsel, if any, who may be retained by said special counsel with respect
thereto.
SECTION 8. Counterparts.
------------
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which shall be an
original and all of which together shall constitute but one and the same
document.
SECTION 9. Governing Law.
-------------
This Amendment is intended to be performed in the State of New York and
shall be construed and is enforceable in accordance with, and shall be governed
by, the internal laws of the State of New York without regard to principles of
conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
THE GROUND ROUND, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Senior V.P., CFO & Treasurer
GR of MINN., INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Vice President & Treasurer
THE BANK OF NEW YORK,
Individually and as Agent
By:
-----------------------------------
Name:
Title:
CHEMICAL BANK, Individually and as
Co-Agent
By:
-----------------------------------
Name:
Title:
<PAGE> 5
BANK OF AMERICA ILLINOIS
By:
-----------------------------------
Name:
Title:
NBD BANK
By:
-----------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------------
Name:
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:
-----------------------------------
Name:
Title:
<PAGE> 1
Exhibit 10.21
WAIVER TO AMENDED AND
RESTATED CREDIT AGREEMENT
-------------------------
WAIVER (this "WAIVER"), dated as of April 12, 1996, to the Amended and
Restated Credit Agreement, dated as of October 8, 1993, as amended by a First
Amendment, dated as of January 20, 1994, a Second Amendment, dated as of
February 10, 1995, a Third Amendment, dated as of May 10, 1995, a Fourth
Amendment, dated as of November 22, 1995 and a Fifth Amendment, dated as of
February 12, 1996 (as so amended, the "CREDIT AGREEMENT"), among The Ground
Round, Inc. a Delaware corporation (the "SECOND BORROWER", and together with the
First Borrower, the "BORROWERS"), the banks named therein (the "BANKS"), The
Bank of New York, as Agent (the "AGENT") and Chemical Bank, as Co-Agent.
PRELIMINARY STATEMENTS:
A. The Borrowers have requested that the Agent and the Lenders waive the
Consolidated New Worth covenant for the second quarter of fiscal year 1996.
B. The Lenders and the Agent are willing to grant the waiver with respect
to the foregoing subject to the terms and conditions contained herein.
C. Unless otherwise defined herein, all terms defined in the Credit
Agreement shall be used herein as therein defined.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:
SECTION 1. Waiver.
------
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Agent and the Lenders hereby waive the Borrowers'
compliance with the Consolidated Net Worth covenant in Section 5.01(n) of the
Credit Agreement for the second fiscal quarter of 1996, PROVIDED that
Consolidated New Worth for such fiscal quarter shall not be less than
$53,000,000.
SECTION 2. Conditions of Effectiveness.
---------------------------
This Waiver shall become effective as of the date hereof, PROVIDED, that
the Agent shall have received counterparts of (i) this Waiver executed by the
Borrowers, Lenders constituting the Required Lenders and the Agent, (ii) the
Consent appended hereto (the "CONSENT") executed by each of the Guarantors, and
(iii) such other documents as the Agent shall reasonably request.
SECTION 3. Representations and Warranties.
------------------------------
The Borrowers hereby (a) reaffirm and admit the validity and
<PAGE> 2
enforceability of the Loan Documents and all of their obligations thereunder,
(b) agree and admit that they have no defenses to or offsets against any of
their obligations to the Agent or any Lender under the Loan Documents, and (c)
represent and Warrant that there exists no Default or Event of Default and that
the representations and warranties contained in the Credit Agreement are true
and correct on and as of the date hereof.
SECTION 4. Reference to and Effect on the Loan Documents.
---------------------------------------------
(a) Upon the effectiveness of this Waiver, on and after the date hereof,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein", or words of like import, and each reference in the other
Loan Documents to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as modified hereby;
(b) Except as specifically waived above, the Credit Agreement and the
Notes, and all other Loan Documents, shall remain in full force and effect and
are hereby ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all Collateral described therein shall
continue to secure the payment of the obligations of the Borrowers thereunder,
under the Credit Agreement, as amended hereby, and under the Notes and other
Loan Documents; and
(c) The execution, delivery and effectiveness of this Waiver shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Agent under any of the Loan Documents, nor, except
as provided herein, constituted a waiver of any provision of any of the Loan
Documents.
SECTION 5. Costs and Expenses.
------------------
The Borrowers agree to pay on demand all reasonable costs and expenses of
the Agent in connection with the arranging, preparation, reproduction, execution
and delivery of this Waiver and the other instruments and documents to be
delivered hereunder, including the reasonable fees and expenses of Zalkin, Rodin
& Goodman, LLP, special counsel for the Agent, with respect thereto, and of
local counsel, if any, who may be retained by said special counsel with respect
thereto.
SECTION 6. Counterparts.
------------
This Waiver may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which shall be an original and
all of which together shall constitute but one and the same document.
SECTION 7. Governing Laws.
--------------
This Waiver is intended to be performed in the State of New york and shall
be construed and is enforceable in accordance with, and shall be governed by,
the internal laws of the State of New York without regard to principles of
conflict of laws.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
THE GROUND ROUND, INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Senior V.P., CFO & Treasurer
GR OF MINN., INC.
By:
-----------------------------------
Name: Michael R. Jorgensen
Title: Senior V.P., CFO & Treasurer
THE BANK OF NEW YORK,
Individually and as Agent
By:
-----------------------------------
Name:
Title:
CHEMICAL BANK, Individually and as
Co-Agent
By:
-----------------------------------
Name:
Title:
BANK OF AMERICA ILLINOIS
By:
-----------------------------------
Name:
Title:
NBD BANK
By:
-----------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
-----------------------------------
Name: Alan Sidrane
Title: First Vice President
CREDIT LYONNAIS CAYMAN ISLAND BRANCN
By:
-----------------------------------
Name: Alan Sidrane
Title: First Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-1-1995
<PERIOD-START> OCT-2-1995
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,063
<SECURITIES> 0
<RECEIVABLES> 2,506
<ALLOWANCES> 991
<INVENTORY> 2,068
<CURRENT-ASSETS> 6,569
<PP&E> 168,745
<DEPRECIATION> 58,416
<TOTAL-ASSETS> 134,971
<CURRENT-LIABILITIES> 28,720
<BONDS> 44,858
<COMMON> 1,862
0
0
<OTHER-SE> 51,256
<TOTAL-LIABILITY-AND-EQUITY> 134,971
<SALES> 108,782
<TOTAL-REVENUES> 109,683
<CGS> 101,408
<TOTAL-COSTS> 115,987
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,450
<INCOME-PRETAX> (8,754)
<INCOME-TAX> (2,189)
<INCOME-CONTINUING> (6,565)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,565)
<EPS-PRIMARY> (.59)
<EPS-DILUTED> (.59)
</TABLE>
