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 September 3, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12454
MORRISON RESTAURANTS INC.
(Exact name of registrant as specified in charter)
DELAWARE 63-0475239
(State of incorporation or (I.R.S. Employer identifi-
organization) cation no.)
4721 Morrison Drive
P.O. Box 160266
Mobile, AL 36625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (205)344-3000
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 .
34,987,759
(Number of shares of $0.01 par value common stock outstanding
as of October 8, 1994)
This document contains 19 sequentially numbered pages including
exhibits. Exhibit Index appears on page 17.
Page 1 of 19
<PAGE>
INDEX
PAGE
NUMBER
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 3, 1994 AND JUNE 4, 1994............. 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THIRTEEN WEEKS ENDED SEPTEMBER 3,
1994 AND SEPTEMBER 4, 1993..................... 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS FOR THE THIRTEEN WEEKS ENDED
SEPTEMBER 3, 1994 AND SEPTEMBER 4, 1993........ 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS..................................... 6-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS................................. 8-13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS............................. 14
ITEM 2. CHANGES IN SECURITIES......................... NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES............... NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS............................ 14
ITEM 5. OTHER INFORMATION............................. 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.............. 15
SIGNATURES................................................. 16
Page 2
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<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
MORRISON RESTAURANTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<CAPTION>
SEPT. 3, 1994 JUNE 4, 1994
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and short-term investments.................. $38,704 $ 5,021
Receivables - Accounts and Notes (net)........... 35,972 33,059
Inventories...................................... 13,374 16,396
Prepaid expenses and other current assets........ 33,121 25,140
Total Current Assets........................... 121,171 79,616
PROPERTY AND EQUIPMENT - at cost................... 510,749 507,781
Less accumulated depreciation and amortization... 235,786 240,124
274,963 267,657
OTHER INVESTMENTS.................................. 11,650 10,270
COST IN EXCESS OF NET ASSETS ACQUIRED.............. 15,397 22,571
OTHER ASSETS....................................... 24,691 28,339
TOTAL ASSETS................................. $447,872 $408,453
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts and notes payable....................... $ 32,410 $51,922
Other current liabilities........................ 113,992 70,701
Total Current Liabilities.................... 146,402 122,623
LONG-TERM DEBT..................................... 1,494 9,526
OTHER DEFERRED LIABILITIES......................... 63,669 55,168
STOCKHOLDERS' EQUITY:
Common Stock, $.01 par value
(authorized: 50,000 shares;
issued: 09/03/94 - 43,644 shares
issued: 06/04/94 - 43,644 shares)............. 436 436
Capital in excess of par value................... 77,927 77,656
Retained earnings................................ 269,882 248,044
348,245 326,136
Less common stock held in treasury - at cost
(8,608 shares @ 09/03/94; 8,335 shares @ 06/04/94) 111,938 105,000
236,307 221,136
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY..... $447,872 $408,453
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
Page 3
</PAGE>
<PAGE>
<TABLE>
ITEM 1 - FINANCIAL STATEMENTS
MORRISON RESTAURANTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER-SHARE DATA)
(UNAUDITED)
<CAPTION>
THIRTEEN WEEKS ENDED
SEPT 3, 1994 SEPT 4, 1993
<S> <C> <C>
SALES................................. $241,250 $282,158
COST AND EXPENSES:
Cost of merchandise................. 70,493 88,017
Payroll and related costs........... 83,598 104,203
Other operating costs............... 43,299 50,009
Selling, general and administrative. 17,729 17,268
Depreciation........................ 8,656 9,409
Interest expense net of
interest income................... 150 121
L&N conversion/closing costs........ 19,727 -
Net gain on sale/closure of
B&I accounts...................... (46,782) -
196,870 269,027
INCOME BEFORE PROVISION FOR
INCOME TAXES....................... 44,380 13,131
PROVISION FOR FEDERAL AND STATE
INCOME TAXES........................ 19,870 5,022
NET INCOME............................ $24,510 $ 8,109
EARNINGS PER COMMON AND COMMON
EQUIVALENT SHARE:
Primary............................. $0.67 $0.22
Fully Diluted....................... $0.67 $0.22
CASH DIVIDENDS PER SHARE PAID......... $0.0833 $0.08
WEIGHTED AVERAGE SHARES USED IN
EARNINGS PER SHARE COMPUTATION:
Primary............................. 36,558 37,368
Fully Diluted....................... 36,674 37,423
The accompanying notes are an integral part of the consolidated
financial statements.
Weighted average shares and all per-share data for the prior year have
been restated to give effect to common stock dividends and stock
splits through September 3, 1994.
</TABLE>
Page 4
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<PAGE>
<TABLE>
ITEM 1 - FINANCIAL STATEMENTS
MORRISON RESTAURANTS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<CAPTION>
FOR THE 13 WEEKS ENDED
SEPT. 3, 1994 SEPT. 4, 1993
<S> <C> <C>
CASH FROM OPERATIONS........................... $ 1,902 $22,882
INVESTING ACTIVITIES:
Purchases of property and equipment............ (28,180) (17,109)
Proceeds from sale of B&I contracts and assets. 100,000 0
Other.......................................... (985) (247)
NET CASH USED BY INVESTING ACTIVITIES.......... 70,835 (17,356)
FINANCING ACTIVITIES:
Early retirement of debt....................... (12,000) 0
Net change in short-term borrowings............ (17,416) 0
Principal payments on long-term borrowings..... (30) (47)
Stock repurchases.............................. (7,550) (10,145)
Dividends paid................................. (2,942) (2,886)
Other.......................................... 884 409
NET CASH USED BY FINANCING ACTIVITIES.......... (39,054) (12,669)
INCREASE/(DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS...................... 33,683 (7,143)
Beginning cash and short-term investments...... 5,021 31,372
Ending cash and short-term investments......... $38,704 $24,229
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
Page 5
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<PAGE>
ITEM 1
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited, condensed consolidated financial
statements have been prepared in accordance with the instructions
to Form 10-Q and do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. The statements should be read
in conjunction with the notes to the consolidated financial
statements included in Morrison Restaurants Inc.'s annual report
for the fiscal year ended June 4, 1994. The accompanying
unaudited, condensed consolidated financial statements reflect
all adjustments for normal recurring accruals and also includes
the accruals for the phase out of the L&N Seafood Grill concept
and the remaining expenses to be incurred in connection with the
sale/closing of the education, business and industry accounts.
These adjustments are necessary, in the opinion of management,
for a fair presentation of the financial position, the results of
operations and the cash flows for the interim periods presented.
The results of operations for the interim periods reported herein
are not necessarily indicative of results to be expected for the
full year.
NOTE B - NOTES AND MORTGAGES PAYABLE
During the quarter ended September 3, 1994, the Company retired
the $12.0 million 8.8% Senior Promissory Note payable to Life
Insurance Company of Georgia which was due in equal annual
principal installments of $4.0 million, commencing December 31,
1994 through December 31, 1996. The note was paid with funds
received from the sale of the education, business and industry
contracts and assets. As a result, the restrictions on the
incurring of additional indebtedness, minimum consolidated
working capital and net worth requirements, as well as dividend
payments and purchases of its capital stock (which were described
in Note 8 of Notes to Consolidated Financial Statements of the of
the Company's annual report for fiscal 1994) are no longer in
effect.
Page 6
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<PAGE>
<TABLE>
ITEM 1
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE C- MORRISON RESTAURANTS INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(IN THOUSANDS EXCEPT PER-SHARE DATA)
<CAPTION>
THIRTEEN WEEKS ENDED
%
SEPT 3, 1994 SEPT 4, 1993 Change
<S> <C> <C> <C>
SALES:
Ruby Tuesday Group............. $113,240 $ 90,495 25
Morrison Group................. 127,966 125,401 2
Corporate and Other............ 44 (38)
241,250 215,858 12
L&N*........................... 0 16,793
B&I**.......................... 0 49,507
$241,250 $282,158 (14)
OPERATING PROFIT:
Ruby Tuesday Group............. $11,015 $ 9,213 20
Morrison Group................. 9,384 7,915 19
20,399 17,128 19
L&N*........................... 0 (262)
B&I**.......................... 0 (840)
20,399 16,026 27
Corporate Expenses............. (2,924) (2,774) 5
Net Interest Income (Expense).. (150) (121) 24
L&N Conversion/Closing Costs... (19,727) 0
Net Gain on Sale/Closure
of B&I Contracts............. 46,782 0
Income Before Income Taxes...... 44,380 13,131
Income Taxes.................... 19,870 5,022
Net Income...................... $24,510 $ 8,109
Earnings per Common and
Common Equivalent Share:
Primary....................... $0.67 $0.22
Fully Diluted................. $0.67 $0.22
Common and Common Equivalent
Shares:
Primary....................... 36,558 37,368
Fully Diluted................. 36,674 37,423
OPERATING PROFIT MARGINS:
Ruby Tuesday Group............. 9.7% 10.2%
Morrison Group................. 7.3% 6.3%
* Represents the L&N Seafood Grill units of the Ruby Tuesday Group which are being
converted or closed.
** Represents the education, business and industry (B&I) contracts of the Morrison Group
which were sold or will be closed.
Weighted average shares and all per-share data for the prior year have been restated to
give effect to common stock dividends and stock splits through September 3, 1994.
</TABLE>
Page 7
</PAGE>
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
In March 1994, the Board of Directors of the Company approved four-
year financial and business plans for the Company and a strategy to
invest in high-growth businesses that have or can obtain a dominant
market position in their respective categories. Pursuant to this
strategy, on June 27, 1994, the Company announced that it had reached
a definitive agreement to sell certain of the education, business and
industry (B&I) contracts and assets and plans to phase out its L&N
Seafood Grill concept by converting certain units to its more
profitable and successful Ruby Tuesday restaurants and Mozarella's
Cafes and selling or closing the remaining units. The management
believes that while the education, business and industrial food
service is a growing and important segment of the company, the Company
was not likely to achieve dominance in that category. The management
also believes that the Company's growth opportunities for casual
dining have been and continue to be in the under $10 segment of the
industry and thus determined to phase out the higher-priced L&N
Seafood Grill concept and concentrate on expanding the Company's
proven growth vehicles in the casual dining market.
Pursuant to the agreement entered into and announced on June 27, 1994,
on August 8, 1994, the Company sold certain education, business and
industry contracts and assets of the Morrison Group to Gardner
Merchant Food Services, Inc., a wholly owned subsidiary of Gardner
Merchant Ltd., for $100 million in cash. The Company announced it
would close the remaining accounts and at October 17, 1994 has reached
settlements on two of the remaining three accounts with negotiations
underway on the settlement of the other account. The sale, net of
related expenses and closing costs of approximately $11 million,
resulted in a net pre-tax gain of $46.8 million.
The plan to phase out the L&N concept, as approved by the Board of
Directors on June 27, 1994, provided for the conversion of 30 of the
38 L&N Seafood Grill units into Ruby Tuesdays, Mozzarella's Cafes or
Snapp's (formerly Sweetpea's) restaurants and the sale or closing of
the remaining units. As a result of a default on a licensing
agreement with the Company, three additional L&N Seafood Grill units
will revert to the Company and will be closed. The Company's phase
out plan presently calls for the conversion of 29 of 41 L&N Seafood
Grill units and the closing or sale of 12 units. Funding for the
conversion/closing of the L&N units will be provided by the remaining
proceeds from the sale of the B&I contracts and assets and ongoing
operations. The Company intends to complete the plan to phase out the
L&N concept by the end of fiscal 1995 and at September 3, 1994, the
Company has closed 19 units with 16 units converted or in the
conversion process.
Page 8
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<PAGE>
The Company accrued approximately $19.7 million to be incurred as a
result of the phase out of the L&N concept consisting primarily of the
following: losses on disposal of fixed assets net of anticipated
proceeds and the net cost of related lease obligations for the units
to be closed (approximately $11.6 million), expected operating losses
during the phase out (approximately $4.8 million), severance and
continuation pay (approximately $1.1 million), and other losses on
the conversion of units consisting primarily of the write off of fixed
assets, inventory, and unamortized cost in excess of net assets
acquired (approximately $2.2 million). At September 3, 1994, $1.8
million of expenses related to the phase out of the L&N concept had
been charged against the reserve, of which $1.4 million related to
fiscal 1995 operating losses.
1. FINANCIAL CONDITION
1.1 ASSETS
Total Assets at September 3, 1994 were $447.9 million, a $39.4
million increase from $408.5 million as of the end of the prior
quarter. Cash and Short-Term Investments increased $33.7 million to
$38.7 million during the quarter resulting from the proceeds received
for the sale of the B&I contracts and assets offset by the Company's
retirement of debt, capital expenditures and repurchase of stock
during the quarter. Accounts and Notes Receivables increased $2.9
million to $36.0 million during the quarter due to a net change in
receivables resulting from the sale of the B&I contracts and assets
and an increase in vendor rebates due the Company. Inventories
decreased $3.0 million to $13.4 million, primarily due to decreased
inventories resulting from the sale of the B&I contracts and assets.
Property and Equipment increased $7.3 million during the quarter ended
September 3, 1994. The increase is due to the net result of capital
expenditures of $28.2 million, less depreciation expense of $10.4
million and $10.5 million in retirements ($9.7 million of retirements
results from the sale of the B&I contracts and assets) for the
quarter. Capital expenditures consisted primarily of $21.6 million in
the Ruby Tuesday Group and $5.2 million in the Morrison Group. The
Company anticipates that during the remaining quarters of fiscal 1995
capital expansion will be financed by funds generated by operations
and from borrowings on lines of credit as discussed in section 1.4
Short-Term Borrowings. Costs in excess of net assets acquired
decreased $7.2 million for the quarter to $15.4 million. The decrease
is primarily the result of a $6.8 million reduction from the sale of
the B&I contracts and assets. Other assets decreased $3.6 million as
a result of the reduction in assets from the sale of the B&I contracts
and assets offset by a $1.4 million increase in a note receivable
relating to additional advances under a loan agreement with Tia's Inc.
Page 9
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<PAGE>
1.2. LIABILITIES
Total Liabilities at September 3, 1994 were $211.6 million, a $24.3
million increase from $187.3 million as of the end of the prior
quarter. Accounts and Notes Payable at September 3, 1994 were $32.4
million, a $19.5 million decrease from the end of the prior quarter.
The decrease is primarily due to the early retirement of the Life of
Georgia note payable and repayment of the $17.4 million of short-term
borrowings outstanding at June 4, 1994 which were paid with proceeds
from the sale of the B&I contracts and assets. Other current
liabilities increased $43.3 million to $114.0 million. The increase
is the result of a $22.3 million increase in income taxes payable,
primarily due to the gain on the sale of the B&I contracts and assets,
and an increase in accruals for the conversion/closing of the L&N
units and the remaining B&I related expenses, offset by a decline in
operating liabilities of B&I and L&N. Long-Term Debt decreased $8.0
million to $1.5 million at September 3, 1994 from the end of the prior
quarter as a result of the early retirement of the Life Insurance
Company of Georgia note payable. Other Deferred Liabilities increased
$8.5 million to $63.7 at September 3, 1994. This increase is
primarily the result of a $4.9 million increase in deferred income
taxes and, in addition, a $2.8 million increase in deferred
liabilities resulting from the sale of the B&I contracts and assets.
1.3 WORKING CAPITAL
The Company had negative working capital of $25.2 million and the
current ratio was .83 at September 3, 1994, compared to negative $43.0
million working capital and .65 current ratio at the end of the prior
quarter. Proceeds from the sale of the B&I contracts and assets,
offset by the retirement of Company debt, capital expenditures
resulting from the Company's expansion and stock purchases under the
Company's stock repurchase program caused the increase in the
Company's working capital.
1.4 SHORT-TERM BORROWING
At September 3, 1994, the Company had committed lines of credit
amounting to $31.0 million and non-committed lines of credit amounting
to $107.0 million with various banks at varying interest rates. These
lines are subject to periodic review by each bank and may be canceled
by the Company at any time. During the quarter, borrowings on these
lines of credit reached $29.4 million but were repaid prior to
September 3, 1994 with proceeds from the sale of the education,
business and industry contracts and assets. Subsequent to the end of
the quarter ended September 3, 1994, the Company entered into a five-
year revolving line of credit with various banks which will allow the
Company to borrow a total of $200.0 million over the next five years
under various interest rate options. The Company anticipates that
there will be borrowings against this line during fiscal 1995 to
finance, in part, the Company's expansion of operations and stock
repurchases.
Page 10
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<PAGE>
1.5 LONG-TERM BORROWING
Long-term borrowing decreased $8.0 million during the quarter ended
September 3, 1994 as a result of the early retirement of the Senior
Promissory Note payable to Life Insurance Company of Georgia. This
note was paid with proceeds from the sale of the education business
and industry contracts and assets.
1.6 CASH DIVIDENDS
Cash Dividends paid during the first quarter of fiscal year 1995
amounted to $2.9 million, which is consistent with the cash dividends
paid during each quarter of the prior fiscal year. Dividends paid per
share were $0.0833 for the first quarter.
2. RESULTS OF OPERATIONS
2.1 SALES
Total Sales for the quarter ended September 3, 1994 decreased 14.5%
over the same quarter of the prior year. This decrease in sales was
the net result of $66.3 million of L&N and B&I sales included in the
first quarter of fiscal 1994 sales, 25.1% sales increase in the Ruby
Tuesday Group and a 2.0% increase in the Morrison Group. The sales
increase in the Ruby Tuesday Group is primarily the result of
additional units and an increase in same store sales. Excluding the
effects of L&N and B&I discussed above, sales increased 11.8% from the
same quarter of the prior fiscal year.
Excluding L&N units, the Company had a net increase of 49 units in the
Ruby Tuesday Group when compared to the same quarter of the prior
year. On September 3, 1994, the Ruby Tuesday Group was composed of
233 Ruby Tuesdays, 25 Mozzarellas and three Snapps (formerly
Sweetpeas) restaurants.
The sales increase in the Morrison Group, excluding the B&I accounts,
is attributable to larger accounts in the Health Care Division and a
same-store sales increase in the Family Dining Division. On September
3, 1994 the Health Care Division was composed of 280 accounts in
hospitals, nursing homes and other health-related facilities, and the
Family Dining Division was composed of 164 units.
2.2 COSTS AND EXPENSES
Total Costs and Expenses for the quarter ended September 3, 1994 were
$196.9 million. Excluding the effect of L&N and B&I for each quarter,
costs and expenses were $223.9 compared to costs and expenses of
$201.6 million in the same period in the prior fiscal year, an
increase of $22.3 million or 11.1%.
The following discussion of costs and expenses excludes the effect of
L&N and B&I for both the current and prior years. Cost of merchandise
increased $4.7 million or 7.1% to $70.5 million. These costs have
decreased as a percentage of sales over the prior year as a result of
improved cost controls in both the Ruby Tuesday and Morrison Groups.
Page 11
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<PAGE>
Payroll and related costs increased $5.0 million or 6.4% to $83.6
million. As a percentage of sales, payroll and related costs have
decreased from 36.4% to 34.7%, primarily due to improved experience
for health and workers compensation claims. Other operating costs
increased $7.5 million or 21.1% to $43.3 million due to increased
repair and maintenance costs and other increased expenses due to
expanded operations in the Ruby Tuesday Group. Selling, general and
administrative costs increased $4.0 million or 29.6% to $17.7 million.
This increase is due to the cost of the Company's expanded advertising
strategy over the prior year. Costs and expenses when expressed as a
percent of sales for the quarter ended September 3, 1994, excluding
the L&N and B&I transactions in the current and prior years, decreased
to 92.8% from 93.4%. These decreases are largely attributable to the
success of food-cost control programs.
2.3 PRE-TAX PROFIT
The consolidated pre-tax profit for the quarter ended September 3,
1994 increased $31.2 million due to the net effect of the L&N phase
out and the sale of the B&I contracts and assets and the increased
profits resulting from expansion of the Company over the prior year.
The consolidated pre-tax profit excluding the effects of L&N and B&I
discussed above would have been $17.3 million, an increase of $3.1
million or 21.7% over the prior year.
2.4 INCOME TAX EXPENSE
The effective income tax rate for the quarter ended September 3, 1994
was 44.8% compared to 38.2% for the same quarter of the prior year.
Excluding the effect of B&I and L&N, the effective income tax rate
would have been 38.3%, which is essentially the same as the first
quarter of the prior year.
2.5 EARNINGS PER SHARE
Earnings Per Share are based on the weighted average number of shares
outstanding during each quarter and are adjusted for the assumed
conversion of shares issuable upon exercise of options, after the
assumed repurchase of common shares with the related proceeds and
after the adjustment for the stock splits and stock dividends through
September 3, 1994. The difference between the primary and fully
diluted earnings per share amounts shows the maximum extent of
potential dilution of current earnings that conversions of shares
could create.
Page 12
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<PAGE>
3. KNOWN EVENTS, UNCERTAINTIES AND TRENDS
3.1 FINANCIAL AND STOCK REPURCHASE PLANS
On March 30, 1994, the Board of Directors adopted a new financial
strategy that places more emphasis on debt management and establishes
a target capital structure which will utilize a prudent amount of debt
to minimize the weighted average cost of capital while allowing the
Company to maintain financial flexibility and the equivalent of an
investment-grade (BBB) bond rating. The financial strategy sets a
target debt-to-capital ratio of 60%, including operating leases. The
plan also provides for repurchasing Company stock whenever cash flow
exceeds funding requirements while maintaining the target capital
structure. Accordingly, the Board approved the repurchase of up to an
additional 2.5 million shares, bringing the total authorized for
repurchase under all of the Company's stock repurchase plans and
programs as of March 30, 1994, to 4.6 million shares. During the
quarter ended September 3, 1994, the Company repurchased 325,667
shares of the Company's stock at an average purchase price of $23.18
per share. Also, as of October 14, 1994, subsequent to the quarter
ended September 3, 1994, the Company had repurchased an additional
371,397 shares of stock at an average purchase price of $27.80 per
share.
Page 13
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<PAGE>
PART II - OTHER INFORMATION
ITEM 1
LEGAL PROCEEDINGS
The Registrant is presently, and from time to time, subject to pending
claims and suits arising in the ordinary course of its business. In
the opinion of management, the ultimate resolution of these pending
legal proceedings will not have a material adverse effect on the
Registrant's operations or consolidated financial position.
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held on September 28, 1994, the
stockholders of the Company elected Class III Directors to serve a
three-year term on the Board and approved an amendment to the
Certificate of Incorporation to increase the authorized Common Stock,
the Amended and Restated Stock Incentive and Deferred Compensation
Plan for Directors, and the Incentive Bonus Plan for the Chief
Executive Officer. The results of the voting were as follows:
<TABLE>
PROPOSAL 1
<CAPTION>
Authority
Director Nominees For Withheld
<S> <C> <C>
Claire L. Arnold 27,922,371 349,684
Samuel E. Beall, III 27,891,302 380,753
Dr. Donald Ratajczak 27,924,602 347,453
</TABLE>
<TABLE>
<CAPTION>
For Against Abstained Non-Votes
<S> <C> <C> <C> <C>
PROPOSAL 2
Increase of Authorized
Common Stock. 25,456,164 2,498,345 317,546 7,034,041
PROPOSAL 3
Amended and Restated Stock
Incentive and Deferred
Compensation Plan for
Directors. 25,975,149 1,941,182 355,724 7,034,041
PROPOSAL 4
Incentive Bonus Plan
for Chief Executive
Officer. 25,569,384 2,341,568 361,103 7,034,041
</TABLE>
ITEM 5
OTHER INFORMATION
At their regular quarterly meeting on September 28, 1994, the Board of
Directors declared a cash dividend of eight and three-fourth cents per
share, payable at the close of business on October 31, 1994 to
shareholders of record as of October 14, 1994. This cash dividend is
an increase of five percent in the cash dividends declared during each
quarter of the prior fiscal year.
Page 14
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<PAGE>
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following exhibits are filed as part of this report:
Exhibit
No.
11 Computation of Primary and Fully Diluted
Earnings Per Share
27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K, dated July 27,
1994 reporting the proposed sale of certain education, business
and industry (B&I) contracts and assets and the closure of the
remaining B&I accounts and containing unaudited Pro Forma
Financial Statements reporting the estimated effects of such
sale/closure.
The Company filed a Current Report on Form 8-K, dated August 23,
1994 reporting the closing of the sale of certain education,
business and industry (B&I) contracts and assets and the closure
of the remaining B&I accounts and containing unaudited Pro Forma
Financial Statements reporting the estimated effects of such
sale/closure.
Page 15
</PAGE>
<PAGE>
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.
MORRISON RESTAURANTS INC.
(Registrant)
10/18/94 /s/ J. RUSSELL MOTHERSHED
DATE J. RUSSELL MOTHERSHED
Senior Vice President, Finance
(Senior Vice President and
Principal Accounting Officer)
Page 16
</PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered Page
11 Computation of Primary and Fully
Diluted Earnings Per Share 18 - 19
27 Financial Data Schedule 20
Page 17
<PAGE>
<TABLE>
ITEM 6.(a)
EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS EXCEPT PER-SHARE DATA)
<CAPTION>
THIRTEEN WEEKS ENDED
SEPT 3. 1994 SEPT 4, 1993
PRIMARY EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
<S> <C> <C>
Average common shares outstanding...... 35,261 36,094
Average additional common shares
issuable on exercise of dilutive
stock options (computed by use of
the "treasury stock method" at the
average market price)................ 1,297 1,274
TOTALS.............. 36,558 37,368
Net Income............................. $24,510 $ 8,109
Primary earnings per common and
common equivalent share.............. $0.67 $0.22
Weighted average shares and all per-share data for the prior year
have been restated to give effect to common stock dividends and
stock splits through September 3, 1994.
</TABLE>
Page 18
</PAGE>
<PAGE>
<TABLE>
ITEM 6.(a) (continued)
EXHIBIT 11: COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS EXCEPT PER-SHARE DATA)
<CAPTION>
THIRTEEN WEEKS ENDED
SEPT 3, 1994 SEPT 4, 1993
FULLY DILUTED EARNINGS PER COMMON AND
COMMON EQUIVALENT SHARE
<S> <C> <C>
Average common shares outstanding...... 35,261 36,094
Average additional common shares
issuable on exercise of dilutive
stock options (computed by use of
the "treasury stock method" at the
higher of period-end or average
market price)........................ 1,413 1,329
TOTALS.............. 36,674 37,423
Net Income............................. $24,510 $ 8,109
Fully diluted earnings per common and
common equivalent share.............. $0.67 $0.22
Weighted average shares and all per-share data for the prior year
have been restated to give effect to common stock dividends and
stock splits through September 3, 1994.
</TABLE>
Page 19
</PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MORRISON
RESTAURANTS INC. FINANCIAL STATEMENTS AS OF AND FOR THE PERIOD ENDED SEPTEMBER
3, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-03-1995
<PERIOD-END> SEP-03-1994
<CASH> 38,704
<SECURITIES> 0
<RECEIVABLES> 38,610
<ALLOWANCES> 2,638
<INVENTORY> 13,374
<CURRENT-ASSETS> 121,171
<PP&E> 510,749
<DEPRECIATION> 235,786
<TOTAL-ASSETS> 447,872
<CURRENT-LIABILITIES> 146,402
<BONDS> 1,494
<COMMON> 436
0
0
<OTHER-SE> 235,871
<TOTAL-LIABILITY-AND-EQUITY> 447,872
<SALES> 240,729
<TOTAL-REVENUES> 241,250
<CGS> 70,493
<TOTAL-COSTS> 206,046
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 150
<INCOME-PRETAX> 44,380
<INCOME-TAX> 19,870
<INCOME-CONTINUING> 24,510
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,510
<EPS-PRIMARY> $0.67
<EPS-DILUTED> $0.67
</TABLE>
