UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 0-12343
VICORP Restaurants, Inc.
(Exact name of registrant as specified in its charter)
Colorado 84-0511072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 West 48th Avenue, Denver, Colorado 80216
(Address of principal executive offices) (Zip Code)
(303) 296-2121
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
The registrant had 9,049,026 shares of its $.05 par value Common Stock
outstanding as of March 9, 1996.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
VICORP Restaurants, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands)
January 31, October 31,
1996 1995
----------- -----------
(unaudited)
ASSETS
Current assets
Cash $ 2,621 $ 3,988
Receivables 3,171 3,149
Inventories 6,049 8,597
Deferred income taxes 5,000 5,000
Prepaid expenses and other 1,853 2,003
-------- --------
Total current assets 18,694 22,737
-------- --------
Property and equipment, net 147,971 152,592
Deferred income taxes 39,932 39,375
Other assets 12,970 13,457
-------- --------
Total assets $219,567 $228,161
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt $ 9,203 $ 4,480
Current maturities of capitalized lease obligations 1,546 1,636
Accounts payable, trade 11,322 16,526
Accrued compensation 5,040 5,542
Accrued taxes 7,615 7,998
Accrued insurance 5,650 5,656
Other accrued expenses 4,166 4,984
------- -------
Total current liabilities 44,542 46,822
------- -------
Long-term debt (Note 3) 27,546 31,094
Capitalized lease obligations 10,367 11,085
Non-current accrued insurance 5,758 6,092
Other non-current liabilities and credits 9,137 9,970
Commitments and contingencies
Shareholders' equity
Series A Junior Participating Preferred
Stock, $.10 par value, 200,000 shares
authorized, no shares issued -- --
Common stock, $.05 par value, 20,000,000
shares authorized, 9,049,026 and 9,044,026
shares issued and outstanding 452 452
Paid-in capital 84,367 84,332
Retained earnings 37,398 38,314
-------- --------
Total shareholders' equity 122,217 123,098
-------- --------
Total liabilities and shareholders' equity $219,567 $228,161
======== ========
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Sixteen
Months Weeks
Ended Ended
----------- ------------
January 31, February 19,
1996 1995
------------ ------------
(unaudited)
Revenues
Restaurant operations $88,410 $123,041
Franchise operations 871 992
------- --------
Total revenues 89,281 124,033
------- --------
Costs and expenses
Restaurant operations
Food 31,928 39,651
Labor 28,923 37,877
Other operating 23,403 33,807
General and administrative 5,594 7,802
------- --------
Operating profit (loss) (567) 4,896
Interest expense 1,130 1,168
Other (income) expense, net (232) (270)
------- --------
Income (loss) before income tax expense (benefit) (1,465) 3,998
Income tax expense (benefit) (549) 1,499
------- --------
Net income (loss) $ (916) $ 2,499
======= ========
Earnings (loss) per common and dilutive
common equivalent share $ (.10) $ .26
======= ========
Weighted average common shares and
dilutive common share equivalents 9,045 9,656
======= ========
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Sixteen
Months Weeks
Ended Ended
----------- ------------
January 31, February 19,
1996 1995
----------- ------------
(unaudited)
Operations
Net income (loss) $ (916) $ 2,499
Reconciliation to cash provided by operations
Depreciation and amortization 5,415 7,067
Deferred income tax provision (557) 1,160
Loss on disposition of assets 28 247
Other, net (47) (21)
-------- --------
3,923 10,952
Change in assets and liabilities
Trade receivables (131) 334
Inventories 2,548 2,612
Accounts payable, trade (5,203) (6,389)
Other current assets and liabilities (1,556) (4,361)
Non-current accrued insurance (335) 157
-------- --------
Cash provided by (used for) operations (754) 3,305
-------- --------
Investing activities
Purchase of property and equipment (1,743) (1,816)
Purchase of other assets (1) (84)
Disposition of property 44 (539)
Collection of non-trade receivables 230 6,100
-------- --------
Cash provided by (used for) investing activities (1,470) 3,661
-------- --------
Financing activities
Issuance of debt 10,000 12,500
Payment of debt and capitalized lease obligations (9,238) (21,114)
Other, net 95 123
-------- --------
Cash provided by (used for) financing activities 857 (8,491)
-------- --------
Decrease in cash (1,367) (1,525)
Cash at beginning of period 3,988 6,123
-------- --------
Cash at end of period $ 2,621 $ 4,598
======== ========
Supplemental information
Cash paid during the period for
Interest (net of amount capitalized) $ 1,055 $ 1,168
Income taxes 77 456
The accompanying notes are an integral part of the financial statements.
VICORP Restaurants, Inc.
NOTES TO FINANCIAL STATEMENTS (unaudited)
1. The consolidated financial statements should be read in
conjunction with the annual report to shareholders for the year
ended October 31, 1995. The unaudited financial statements for
the three months ended January 31, 1996 and the sixteen weeks
ended February 19, 1995 contain all adjustments which, in the
opinion of management, were necessary for a fair statement of the
results for the interim periods presented. All of the adjustments
included were of a normal and recurring nature.
2. In fiscal 1995, the Company switched its fiscal year to the
last day in October. Prior to that, the Company utilized a 52/53
week fiscal year which ended on the last Sunday in October. In
conjunction with that change, fiscal quarters in 1996 and forward
will consist of three months. Previously, the Company's first
fiscal quarter consisted of sixteen weeks and all other quarters
consisted of twelve weeks.
Restaurant sales in 1995 restated to a comparable time frame basis
as 1996 were as follows:
Restated Reported
Fiscal 1995 Fiscal 1995
----------- -----------
1st Quarter $103,133,000 $123,041,000
2nd Quarter 89,893,000 84,433,000
3rd Quarter 90,492,000 82,275,000
4th Quarter 86,598,000 80,367,000
----------- -----------
$370,116,000 $370,116,000
=========== ===========
The Company determined that a significant amount of estimation
would be required to restate quarterly 1995 operating results to
correspond with the three month quarterly reporting. Therefore,
restatements of results were not made and the quarterly results
for 1996 and 1995 are not comparable. The following table
highlights the differences in time periods:
<TABLE>
<CAPTION>
Fiscal 1996 Fiscal 1995
----------------------------------- -----------------------------------
Time Period Days Time Period Days
----------- ---- ----------- ----
<S> <C> <C> <C> <C>
1st Quarter Nov. 1, 1995 - Jan. 31, 1996 92 Oct. 31, 1994 - Feb. 19, 1995 112
2nd Quarter Feb. 1, 1996 - Apr. 30, 1996 90 Feb. 20, 1995 - May. 14, 1995 84
3rd Quarter May 1, 1996 - Jul. 31, 1996 92 May 15, 1995 - Aug. 6, 1995 84
4th Quarter Aug. 1, 1996 - Oct. 31, 1996 92 Aug. 7, 1995 - Oct. 31, 1995 86
--- ---
366 366
=== ===
</TABLE>
3. As of January 31, 1996, the Company had $36,500,000 of borrowings
outstanding and $9,012,000 of letters of credit placed under its
bank credit facility. The Company's bank credit agreement expires
on June 30, 1996 when it converts to a term facility payable in
eight equal quarterly installments through June 30, 1998. The
Company is currently pursuing a new revolving credit facility with
certain lenders.
4. In the fourth quarter of 1994, the Company adopted a plan to
dispose of 50 restaurant locations in trade areas that are no
longer considered appropriate for the Company's existing concepts.
As part of the disposal plan, the carrying value of those
restaurants' assets were written down to net realizable values.
The Company also accrued for expected carrying costs pending
disposition and sublease disposition losses. As of January 31,
1996, the Company had closed 48 of those locations, of which 30
stores had been disposed through sublease, lease termination or
sale. Operating results for the 50 locations for the first
quarters of fiscal 1996 and 1995 were as follows:
Three months ended Sixteen weeks ended
January 31, 1996 February 19, 1995
---------------- -----------------
Sales $ 735,000 $ 10,218,000
Store operating profit (loss) ( 33,000) (76,000)
During the first quarter of 1996, $620,000 of closure and
carrying related costs were charged against the liability
established for such costs. As of January 31, 1996, the Company
had $10,721,000 of reserves remaining to provide for the disposal
of 28 properties, including eight closed prior to 1994. The
reserves consisted of $6,197,000 to reduce the disposal property
to net realizable value and $4,524,000 to provide for expected
carrying costs and sublease losses.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
of VICORP Restaurants, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet
of VICORP RESTAURANTS, INC. (a Colorado corporation) and subsidiary as
of January 31, 1996, and the related condensed consolidated statements
of operations for the 3-month period ended January 31, 1996 and
the 16-week period ended February 19, 1995, and the condensed
consolidated statements of cash flows for the 3-month period ended
January 31, 1996 and the 16-week period ended February 19, 1995.
These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantially
less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements referred to above for
them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of VICORP
Restaurants, Inc. and subsidiary as of October 31, 1995, (not
presented herein), and, in our report dated December 12, 1995, we
expressed an unqualified opinion on that statement. In our opinion,
the information set forth in the accompanying condensed consolidated
balance sheet as of October 31, 1995, is fairly stated, in all
material respects, in relation to the balance sheet from which it has
been derived.
/s/ Arthur Andersen LLP
-------------------
ARTHUR ANDERSEN LLP
Denver, Colorado,
February 21, 1996
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of operations
- ---------------------
The Company's quarterly financial information is subject to seasonal
fluctuation. Also, the first quarters of 1996 and 1995 are not
comparable because of differences in time periods presented (see Note
2 of Notes to the Financial Statements). The first quarter of 1996
consisted of three months, or 92 days, while the first quarter of 1995
consisted of sixteen weeks, or 112 days.
Restaurant operations
The following table sets forth certain operating information for the
Company's operating concepts and the Company as a whole.
Three months Sixteen weeks
ended ended
January 31, 1996 February 19, 1995
---------------- -----------------
Bakers Square
Restaurant sales $54,141,000 $77,230,000
Restaurant operating profit 54,000 6,014,000
Restaurant operating profit % .1% 7.8%
Divisional administrative costs 854,000 1,748,000
Divisional operating profit (loss) (800,000) 4,266,000
Restaurants at quarter-end 158 182
Village Inn
Restaurant sales $32,534,000 $41,895,000
Restaurant operating profit 4,392,000 5,795,000
Restaurant operating profit % 13.5% 13.8%
Franchise income 871,000 992,000
Divisional administrative costs 593,000 1,004,000
Divisional operating profit 4,670,000 5,783,000
Restaurants at quarter-end 99 106
Angel's
Restaurant sales $ 1,735,000 $ 3,916,000
Restaurant operating profit (loss) (290,000) (103,000)
Restaurant operating profit % (16.7%) (2.6%)
Divisional administrative costs 110,000 294,000
Divisional operating profit (loss) (400,000) (397,000)
Restaurants at quarter-end 5 7
Consolidated
Restaurant sales $88,410,000 $123,041,000
Food cost % 36.1% 32.2%
Labor cost % 32.7% 30.8%
Other operating cost % 26.5% 27.5%
Restaurant operating profit % 4.7% 9.5%
Restaurant operating profit 4,156,000 11,706,000
Franchise income 871,000 992,000
Divisional general and
administrative costs 1,557,000 3,046,000
---------- ----------
Divisional operating profit 3,470,000 9,652,000
---------- ----------
Unallocated general and
administrative costs 4,037,000 4,756,000
---------- ----------
Operating profit (loss) $ (567,000) $ 4,896,000
========== ==========
Consolidated restaurant sales decreased $34.6 million, or 28%, in the
first quarter of 1996 compared to the first quarter of 1995. Of this
decrease, $19.9 million was attributable to 20 fewer operating days in
1996's first quarter versus 1995's first quarter. Also contributing
to the sales decrease was the operation of approximately 37 fewer
equivalent restaurants due to closures.
Sales decreased 4.8% on a comparable same store basis. Same store
sales for Village Inn were unchanged while Bakers Square's same store
sales decreased 7.6% due primarily to lower prices. Comparable customer
counts for Bakers Square increased .5%. In the middle of fiscal 1995, the
Company reduced menu prices in its Bakers Square concept by
approximately 10%. This action was taken to reverse the four-year
customer count decline in that concept. In late 1995, Bakers Square
further refined its menu to include a "Manager's Daily Specials"
section for which restaurant managers choose six to eight menu items
each day from among approximately 80 alternatives. Besides allowing
for the ability to promote specific locality appeal, the specials
generally have higher prices than other menu items. This change
combined with a price increase on whole pies taken in late December
1995 partially mitigated the price decrease taken in the middle of
1995.
Consolidated restaurant operating profit decreased $7.6 million, or
65%, and decreased as a percentage of restaurant sales from 9.5% to
4.7% in the first quarter of 1996 versus the first quarter of 1995.
Bakers Square recorded the majority of the decrease which resulted
partially from the affect of reduced comparable sales on fixed
occupancy and labor costs. Also contributing to the decrease was the
costs of programs at Bakers Square to attract more customers, namely
higher hourly labor and food costs. These costs were most strongly
felt in the third and fourth quarters of 1995 with the startup of the
programs. While certain of these costs continued in the first quarter
of 1996, they were partially offset by certain additional programs
started to control waste and gain efficiencies without compromising
the experience to the customer as well as reduced advertising costs.
Restaurant operating profits were impacted by the reduced number of
operating days in 1996's first quarter. This was particularly seen in
Village Inn whose store operating profit decreased $1.4 million while
its store margin only decreased 30 basis points. Angel's, the
Company's experimental concept, had a widening store operating loss in
the first quarter of 1996 versus 1995 despite closing its two most
unprofitable restaurants in late 1995. That concept continues to
struggle with developing a profitable program and the Company will
make a decision later in the year on whether Angel's is a viable
concept for expansion.
The following presents select quarterly trend data related to the
operations of Bakers Square and Village Inn:
<TABLE>
<CAPTION>
Bakers Square Village Inn
------------- -----------
Comparable Comparable Store Comparable Comparable Store
Store Customer Operating Store Customer Operating
Sales Counts Margin Sales Counts * Margin
--------------------------------- ------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1995:
1st Qtr -5.4% -8.5% 7.8% 0.3% -4.0% 13.8%
2nd Qtr -11.2% -7.5% 1.9% -2.4% -6.7% 16.6%
3rd Qtr -10.1% -1.0% -8.7% -2.1% -5.3% 12.7%
4th Qtr -8.6% -0.8% -5.5% -1.4% -3.9% 11.0%
1996:
1st Qtr -7.6% 0.5% 0.1% 0.0% -2.6% 13.5%
</TABLE>
* The Company believes that the reduced customer counts for
Village Inn in 1995 were largely due to increased specialty coffee
shop competition, which did not overly affect sales but reduced
customer counts and increased average customer expenditures.
As of January 31, 1996, the Company had closed 48 of the 50
restaurants scheduled for disposition under a plan adopted in fiscal
1994. The following table details sales and operating results for the
50 restaurants for the first quarters of fiscal 1996 and 1995:
Three months Sixteen Weeks
1996 1995
---- ----
Operating Operating
Sales Profit (Loss) Sales Profit (Loss)
Bakers Square $522,000 $(42,000) $7,186,000 $ 1,000
Village Inn 213,000 9,000 2,175,000 (20,000)
Angel's -- -- 857,000 (57,000)
- -------------------------------------------------------------------------------
Total $735,000 $(33,000) $10,218,000 $(76,000)
===============================================================================
Other revenues and expense
- --------------------------
Franchise revenue decreased in 1996's first quarter due to fewer
operating days. Average daily franchise income increased 6.9%.
General and administrative expense decreased largely due to the fewer
operating days in 1996's first quarter. As a percent of revenues,
general and administrative expense in both the first quarters of 1996
and 1995 were 6.3%. This occurred despite the lower relative revenues
in 1996 because of fewer managers-in-training and field support
personnel in 1996.
Interest expense was essentially flat for the first quarter of 1996
compared to 1995's first quarter. However, on an average daily basis,
interest expense increased 17.8% due to increased borrowing levels.
Liquidity and capital resources
- -------------------------------
Operating cash flows decreased $4.1 million in the first quarter of
1996 versus 1995's first quarter. The decrease resulted primarily
from reduced operating results. Overall, the Company had a deficit of
$754,000 in operating cash flows in the first quarter of 1996, but
expects to reverse this situation in later quarters through improved
operating results.
As of January 31, 1996, $36,500,000 of advances were outstanding under
the Company's bank credit facility and approximately $9,500,000 was
available for additional direct advances, subject to limitations on
combined direct advances and letters of credit. In the first quarter
of 1996, the Company borrowed an additional $1.3 million under its
bank facility to cover the operating cash shortage and fund $1.7
million of capital expenditures. The Company's bank credit agreement
expires on June 30, 1996 when it converts to a term facility payable
in eight equal installments through June 30, 1998. The Company is
currently pursuing a new revolving credit facility with certain
lenders and is optimistic that a new facility will be in place prior
to the current revolving facility's expiration. The Company is also
exploring other debt financing sources.
During the first quarter of 1996, the Company disposed of nine
properties, one through sale, seven through lease termination and one
through sublease. Also in that quarter, closure and carrying costs of
$620,000 were charged against the liability established for such and
cash proceeds of $664,000 were realized from the disposition of properties.
At January 31, 1996, the Company had 28 properties remaining which it
was trying to dispose of. Six of those properties were owned in fee
and the rest were leased. The Company hopes to sell the fee
properties over the next year and $3.5 million of proceeds are
expected to be realized from their sale. The Company does not
anticipate significant proceeds from the disposition of the leased
properties. It is expected that the majority of the leased properties
will be disposed of through sublease over the next eighteen months.
Cash carrying costs of approximately $2.6 million are expected to be
incurred over that period. The Company expects to sublease eight of
the properties at rentals lower than the Company's obligations under
the prime leases. Those sublease losses will be incurred over the
remaining years of the leases and the Company does not anticipate that
the losses will materially affect the Company's liquidity.
As of January 31, 1996, authorizations granted by the Board for the
purchase of 300,500 common shares of the Company's common stock
remained available. No shares were purchased in the first quarter of
1996. Future purchases with respect to the authorizations may be made
from time to time in the open market or through privately negotiated
transactions and will be dependent upon various business and financial
considerations.
Capital expenditures approximating $10,000,000 are expected during the
remainder of the fiscal year. The level of planned expenditures may
be reduced if expected operating improvements do not occur. Cash
provided by operations, the unused portion of the Company's bank
credit facility and other financing sources are expected to be
adequate to fund these expenditures and any cash outlays for the
purchase of the Company's common stock as authorized by the Board.
Outlook
- -------
Except for the historical information contained herein, the matters
discussed in this discussion are forward looking statements that
involve risks and uncertainties. Such factors that could influence
future performance include, but are not limited to, the effect of
economic conditions, government initiatives, food commodity prices and
availability, competition, labor availability and the weather.
PART II - OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K.
(a) Exhibits
(10) Amendment No. 4 dated as of January 31, 1996 to Second Amendment
and Restated Credit Agreement dated as of June 18, 1993.
(15) Letter regarding unaudited interim financial information.
(27) Financial data schedule.
(b) Reports on Form 8-K.
None.
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.
March 14, 1996 VICORP Restaurants, Inc.
------------------------
(Registrant)
March 14, 1996 By: s/s J. Michael Jenkins
-------------------
J. Michael Jenkins, President and
Co-Chief Executive Officer
March 14, 1996 By: s/s David D. Womack
---------------
David D. Womack, Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM VICORP
RESTAURANTS, INC. CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS
AS OF JANUARY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 2,621
<SECURITIES> 0
<RECEIVABLES> 3,171
<ALLOWANCES> 0
<INVENTORY> 6,049
<CURRENT-ASSETS> 18,694
<PP&E> 281,759
<DEPRECIATION> 133,788
<TOTAL-ASSETS> 219,567
<CURRENT-LIABILITIES> 44,542
<BONDS> 37,913
0
0
<COMMON> 452
<OTHER-SE> 121,765
<TOTAL-LIABILITY-AND-EQUITY> 219,567
<SALES> 88,410
<TOTAL-REVENUES> 89,281
<CGS> 31,928
<TOTAL-COSTS> 31,928
<OTHER-EXPENSES> 52,326
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,130
<INCOME-PRETAX> (1,465)
<INCOME-TAX> (549)
<INCOME-CONTINUING> (916)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (916)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> (.10)
</TABLE>
EXHIBIT 15: LETTER REGARDING UNAUDITED INTERIM
FINANCIAL INFORMATION
March 14, 1996
To VICORP Restaurants, Inc.:
We are aware that VICORP Restaurants, Inc. has incorporated
by reference into the Company's previously filed
Registration Statement File Nos. 33-26650, 33-32608, 33-34447,
33-48205 and 33-49166, its Form 10-Q for the quarter
ended January 31, 1996, which includes our report dated February 21,
1996, covering the unaudited interim financial information
contained therein. Pursuant to Regulation C of the
Securities Act of 1933, that report is not considered a part
of the registration statement prepared or certified by our
firm or a report prepared or certified by our firm within
the meaning of Sections 7 and 11 of the Act.
Very truly yours,
s/s Arthur Andersen LLP
-------------------
ARTHUR ANDERSEN LLP
Amendment No. 4
Dated as of January 31, 1996
to
Second Amendment and Restated Credit Agreement
Dated as of June 18, 1993
This AMENDMENT No. 4 ("Amendment") dated as of January 31,
1996 is entered into by and among VICORP Restaurants, Inc.,
a Colorado corporation (the "Borrower"), Citibank, N.A. and
NationsBank of Texas, N.A., as lenders (the "Lenders"), and
Citibank, N.A., as agent for the Lenders (in such capacity,
the "Agent").
RECITALS
A. The Borrower, the Lenders and the Agent are
parties to that certain Second Amended and Restated Credit
Agreement dated as of June 18, 1993 (as amended, the "Loan
Agreement"). Terms defined in the Loan Agreement and not
otherwise defined herein are used herein as defined in the
Loan Agreement.
B. The Borrower has requested that the Lenders and
the Agent amend, and the Lenders and the Agent have agreed
to amend, certain provisions of the Loan Agreement as set
forth below.
NOW, THEREFORE, the Borrower, the Lenders and the Agent
agree as follows:
SECTION 1. Amendment. Subject to the conditions set
forth in Section 2 herein, the Borrower, the Lenders and the
Agent hereby amend the Loan Agreement as follows:
(a) Section 7.03(c) of the Loan Agreement is amended
to provide that clause (i) will be "$124,000,000" for the fiscal
quarter ended January 31, 1996, and that clause (i) will be
"$125,000,000" for each fiscal quarter thereafter; and
(b) Section 7.03(e) of the Loan Agreement is amended
to provide that the Borrower is required to maintain a fixed
charge coverage ratio (as set forth in such Section 7.03(e))
greater than or equal to .63 to 1 for the fiscal quarter ending
on January 31, 1996; and to maintain a fixed charge coverage ratio
greater than or equal to 1.75 to 1 as of the last day of each
fiscal quarter thereafter.
SECTION 2. Conditions Precedent to Amendment. This
Amendment shall be deemed to be effective as of January 31,
1996 upon the satisfaction of each of the following
conditions precedent: (a) the receipt by the Agent of four
(4) original copies of this Amendment duly executed and
delivered by a duly authorized officer of the Borrower and
of each Lender; and (b) the absence of any Default or Event
of Default under the Loan Agreement.
SECTION 3. Representations and Warranties of the Borrower.
(a) Upon the effectiveness of this Amendment, the Borrower hereby
reaffirms all covenants, representations and warranties made in
the Loan Agreement and agrees that all such covenants, representations
and warranties shall be deemed to have been re-made as of the effective
date of this Amendment.
(b) The Borrower hereby represents and warrants that
this Amendment constitutes the legal, valid and binding
obligation of the Borrower enforceable against the Borrower
in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally, and general principles of
equity which may limit the availability of equitable
remedies.
SECTION 4. Reference to and Effect on the Loan Agreement.
(a) The execution, delivery and effectiveness
of this Amendment shall not operate as a waiver of any
right, power or remedy of the Lenders and the Agent under
the Loan Agreement or any other document, instrument or
agreement executed in connection therewith, nor constitute a
wavier of any provision contained therein, except as
specifically set forth herein.
(b) Upon the effectiveness of this Amendment, each
reference in the Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import
shall mean and be a reference to the Loan Agreement as
amended hereby, and each reference to the Loan Agreement in
any other document, instrument or agreement executed and/or
delivered in connection with the Loan Agreement shall mean
and be a reference to the Loan Agreement as amended hereby.
(c) Except as specifically amended hereby, the Loan
Agreement and any other document, instrument or agreement
executed in connection therewith shall remain in full force
and effect and are hereby ratified and confirmed.
SECTION 5. Governing Law. This Amendment shall be
governed by and construed in accordance with the other
remaining terms of the Loan Agreement and the internal laws
(as opposed to conflict of law provisions) of the State of
New York.
SECTION 6. Section Titles. The section titles
contained in this Amendment are and shall be without
substance, meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
SECTION 7. Counterparts. This Amendment may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same instrument.
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.
VICORP RESTAURANTS, INC.
By: s/s Charles R. Frederickson
-----------------------
Name: Charles R. Frederickson
Title: Chairman
By: s/s Jack A. Baldwin
---------------
Name: Jack A. Baldwin
Title: Assistant Treasurer
CITIBANK, N.A.
By: s/s David L. Harris
---------------
Vice President
NATIONSBANK OF TEXAS, N.A.
By: s/s Gloria Holland
--------------
Vice President
CITIBANK, N.A., as Agent
By: s/s David L. Harris
---------------
Vice President
