<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 For the quarterly period ended September 30, 2000
------------------
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 For the transition period from ________ to _______
Commission File No. 0-11271
-------
WALL STREET DELI, INC.
(Exact name of registrant as specified in its Charter)
DELAWARE 63-0514240
(State of Incorporation) (IRS Employer I.D. No.)
One Independence Plaza, Suite 100
Birmingham, Alabama 35209
(Address of principal executive offices)
(205) 870-0020
(Registrant's telephone number)
------------------------------------------
Indicate by check mark whether the registrant has (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of the registrant's class of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at November 9, 2000
---------------------------------------------- -------------------------------
<S> <C>
Common Stock, $.05 Par Value 2,908,477
</TABLE>
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I: FINANCIAL INFORMATION
ITEM 1: Financial Statements..........................................................1
Consolidated Balance Sheets...................................................2
Consolidated Statements of Operations.........................................4
Consolidated Statements of Stockholders' Equity...............................5
Consolidated Statements of Cash Flows.........................................6
Notes to Consolidated Financial Statements....................................8
ITEM 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................................10
PART II: OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K ............................................13
SIGNATURES............................................................................14
</TABLE>
<PAGE> 3
PART I: FINANCIAL INFORMATION
<TABLE>
<S> <C>
ITEM I: FINANCIAL STATEMENTS
The financial statements listed below are included on the following pages of this Report on Form 10-Q:
Consolidated Balance Sheets at September 30, 2000 (unaudited) and July 1, 2000.
Consolidated Statements of Operations (unaudited) for the thirteen week periods ended
September 30, 2000 and October 2, 1999.
Consolidated Statements of Stockholders' Equity (unaudited) for the thirteen week periods ended
September 30, 2000 and October 2, 1999.
Consolidated Statements of Cash Flows (unaudited) for the thirteen week periods ended
September 30, 2000 and October 2, 1999.
Notes to Consolidated Financial Statements (unaudited).
</TABLE>
1
<PAGE> 4
WALL STREET DELI, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, July 1, 2000
2000 (unaudited)
============================================================= ================ =============
<S> <C> <C>
Assets
Current
Cash and cash equivalents $ 646,369 $ 761,380
Accounts and notes receivable, net (Notes 3 & 6) 1,368,475 1,341,829
Inventories 531,221 549,009
Deferred tax assets 296,000 296,000
Prepaid rent 79,969 53,580
Other 110,066 153,328
------------ ------------
Total current assets 3,032,100 3,155,126
------------ ------------
Equipment and improvements
Equipment and fixtures 15,797,025 15,774,120
Leasehold improvements 12,463,575 12,462,075
------------ ------------
28,260,600 28,236,195
Less accumulated depreciation and amortization (21,345,477) (20,918,060)
------------ ------------
Net equipment and improvements 6,915,123 7,318,135
------------ ------------
Other
Long-term portion of notes receivable (Notes 3 & 6) 834,732 891,769
Deferred tax assets 2,580,000 2,580,000
------------ ------------
Total other assets 3,414,732 3,471,769
------------ ------------
$ 13,361,955 $ 13,945,030
============ ============
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
2
<PAGE> 5
WALL STREET DELI, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, July 1, 2000
2000
(unaudited)
============================================================= ================ =============
<S> <C> <C>
Liabilities and Stockholders' Equity
Current Liabilities
Bank overdrafts $ 1,397,803 $ 1,075,620
Notes payable 1,078,065 1,427,392
Accounts payable 1,491,483 1,405,267
Accruals:
Taxes other than income 562,897 672,405
Compensation 428,586 463,639
Rent 387,193 487,019
Workers' compensation (127,015) 29,962
Other insurance 225,000 225,000
Miscellaneous 56,483 120,876
------------ ------------
Total current liabilities 5,500,495 5,907,180
------------ ------------
Commitments and contingencies
Stockholders' equity
Common stock, $.05 par - shares authorized
20,000,000; issued 3,426,802 171,341 171,341
Additional paid-in capital 10,805,322 10,805,322
Retained earnings (868,112) (691,722)
------------ ------------
10,108,551 10,284,941
Treasury stock, at cost, 518,325 shares (2,247,091) (2,247,091)
------------ ------------
Total stockholders' equity 7,861,460 8,037,850
------------ ------------
$ 13,361,955 $ 13,945,030
============ ============
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
3
<PAGE> 6
WALL STREET DELI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the thirteen week periods ended
======================================
September 30, October 2,
2000 1999
============================================================= ================ =============
<S> <C> <C>
Revenues
Net sales $ 11,239,666 $ 12,838,407
Franchise revenues 68,311 52,372
------------ ------------
Total revenues 11,307,977 12,890,779
------------ ------------
Costs of restaurant operations
Food and paper costs 3,730,826 4,528,676
Labor 2,734,187 2,978,412
Store expenses 3,220,516 3,528,459
Restaurant depreciation 543,039 631,040
Franchise expenses 161,363 39,607
------------ ------------
Total cost of restaurant operations 10,389,931 11,706,194
------------ ------------
Restaurant operating income 918,046 1,184,585
------------ ------------
Administrative expenses
Division level 329,064 433,798
Catering sales 123,468 155,300
Corporate 598,713 755,670
------------ ------------
Total general and administrative 1,051,245 1,344,768
------------ ------------
Other income (expense)
Interest (expense) (43,686) (16,088)
Gain (loss) from sale of assets 495 (24,957)
------------ ------------
Total other income (expense) (43,191) (41,045)
------------ ------------
Income (loss) before taxes (176,390) (201,228)
Taxes on income (Note 7) -- --
------------ ------------
Net income (loss) $ (176,390) $ (201,228)
------------ ------------
Basic and diluted income (loss) per share $ (0.06) $ (0.07)
------------ ------------
Weighted average number of common shares
outstanding (Note 5) 2,908,477 2,896,477
============ ============
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
4
<PAGE> 7
WALL STREET DELI, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Treasury Stock
-------------------------- ----------------------------
Number Additional Number
of Paid-in Retained of
Shares Amount Capital Earnings Shares Amount
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, July 3, 1999 3,414,802 $170,740 $10,787,369 $ 1,189,940 518,325 $(2,247,091)
Net loss for the quarter -- -- -- (201,228) -- --
Treasury stock acquired -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Balance, October 2, 1999 3,414,802 $170,740 $10,787,369 $ 988,712 518,325 $(2,247,091)
===================================================================================================
Balance, July 1, 2000 3,426,802 $171,341 10,805,322 $ (691,722) 518,325 $(2,247,091)
Net loss for the quarter -- -- -- (176,390) -- --
Treasury stock acquired -- -- -- -- -- --
---------------------------------------------------------------------------------------------------
Balance, September 30, 2000 3,426,802 $171,341 10,805,322 $ (868,112) 518,325 $(2,247,091)
===================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
5
<PAGE> 8
WALL STREET DELI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the thirteen week periods ended
======================================
September 30, October 2,
2000 1999
============================================================= ================ =============
<S> <C> <C>
Operating activities
Net loss $ (176,390) $ (201,228)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 577,379 656,634
Loss (gain) on sale of property and equipment (495) 24,957
Provision for loss on accounts and notes receivable -- 42,000
Changes in operating assets and liabilities:
Receivables - net (Note 3) (96,646) (149,175)
Inventories 17,788 4,300
Refundable income taxes -- (2,212)
Prepaid expenses and other 16,873 (4,909)
Accounts payable and bank overdraft 408,399 (353,334)
Accruals (465,757) (49,095)
------------ ------------
Cash provided by operating activities 281,151 (32,062)
------------ ------------
Investing activities
Payments for purchase of equipment and
improvements (173,872) (105,611)
Proceeds from sale of equipment and improvements -- 1,591
Net decrease of notes receivable 57,037 40,089
Decrease in officer loans for split-dollar
life insurance policies 70,000 --
------------ ------------
Cash provided (used) by investing activities (46,835) (63,931)
============ ============
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
6
<PAGE> 9
WALL STREET DELI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For the thirteen week periods ended
======================================
September October 2,
30, 1999
2000
============================================================= ================ =============
<S> <C> <C>
Financing activities
Net borrowings (payments) under line of credit (349,327) 5,613
------------ ------------
Cash provided (used) by financing activities (349,327) 5,613
------------ ------------
Net increase (decrease) in cash for the period (Note 9) (115,011) (90,380)
Cash and cash equivalents, beginning of period 761,380 1,305,652
------------ ------------
Cash and cash equivalents, end of period $ 646,369 $ 1,215,272
------------ ------------
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $ 43,686 $ 20,199
Income taxes $ -- $ --
</TABLE>
See accompanying notes to consolidated financial statements (unaudited).
7
<PAGE> 10
WALL STREET DELI, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management of the Company, the accompanying
unaudited consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position as of September 30, 2000, and the
results of operations, changes in stockholders' equity and cash flows
for the thirteen week periods ended September 30, 2000 and October 2,
1999.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. Estimates also affect the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
2. The results of operations for the thirteen week periods ended
September 30, 2000 and October 2, 1999 are not necessarily indicative
of the results to be expected for the full year. Certain amounts
during the first quarter of fiscal 2000 have been reclassified to
conform to the current year presentation.
3. Accounts and notes receivable consists of:
<TABLE>
<CAPTION>
September 30, July 1,
2000 2000
============= ============
<S> <C> <C>
Accounts receivable $ 603,794 $ 559,097
Notes receivable 459,650 498,566
Assets of business transferred under contractual
arrangement 632,000 656,000
Officer's loans for split-dollar life
insurance policies 758,804 828,804
------------ ------------
2,454,248 2,542,467
Less allowance for doubtful accounts (251,041) (308,869)
------------ ------------
2,203,207 2,233,598
Less non-current portion of notes receivable (834,732) (891,769)
------------ ------------
$ 1,368,475 $ 1,341,829
============ ============
</TABLE>
4. Inventories are valued at the lower of cost (first-in, first-out) or
market.
5. Earnings per share ("EPS") have been computed in accordance with the
provisions of SFAS 128. Basic EPS excludes dilution and is computed by
dividing income available to common stockholders by the weighted
average number of shares outstanding during the respective periods.
Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock are exercised or
converted into common stock or result in the issuance of common stock
that then shares in the earnings of the Company. The effect of shares
issuable under the Company's stock option plan are excluded for the
thirteen week periods ended September 30, 2000 and October 2, 1999 as
the effect would be anti-dilutive. The assumed exercise of the common
stock options is not included in the computation of common stock
equivalents for the thirteen week periods ended September 30, 2000 and
October 2, 1999, because the
8
<PAGE> 11
significant majority of common options outstanding were at prices
which exceed the common stock market price.
Earnings per share has been calculated using the following:
<TABLE>
<CAPTION>
For the Thirteen
Week Periods Ended
----------------------------------
September 30, October 2,
2000 1999
------------- --------------
<S> <C> <C>
Weighted average number of common
shares used for basic EPS 2,908,477 2,896,477
Effect of dilutive stock options -- --
Weighted average number of common shares and
dilutive potential common stock used in
diluted EPS 2,908,477 2,896,477
</TABLE>
6. Effective December 31, 1998, the Company transferred leasehold
improvements and equipment and subleased five stores in the Los
Angeles, California area to California Fresh Deli, Inc. ("CFD"). CFD
entered into a franchise agreement with the Company to operate the
five stores and a management agreement to manage for the Company a
sixth store also in the Los Angeles area for the remainder of the
current lease term.
The Company received approximately $40,500 in cash and a $800,000
non-interest bearing note, payable in monthly installments at $12,000
from June 1999 through November 2000, and at the greater of $13,333 or
eight percent of monthly revenues thereafter until the note is repaid.
The realization of the note is dependent on future operations of the
five stores and has been reported as "Assets of business transferred
under contractual arrangement" net of a valuation allowance of
$129,378. Franchise fees payable by CFD under the franchise agreement
have been deferred until the note has been paid in full.
7. The effective tax rates for the thirteen weeks ended September 30,
2000 and October 2, 1999 were -0- percent. Estimated amounts of tax
benefits not considered more likely than not to be realized result in
decreases from the effective tax rate of 40 percent for the thirteen
week periods ended September 30, 2000 and October 2, 1999,
respectively.
8. In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions involving
Stock Compensation, an Interpretation of APB Opinion No. 25." The
Company was required to adopt the Interpretation on July 1, 2000. The
Interpretation requires that stock options that have been modified to
reduce the exercise price be accounted for as variable. The Company
cancelled certain stock options and reissued them at a lower price on
December 15, 1999 and in accordance with generally accepted accounting
principles accounted for the repriced stock options as fixed. As a
result of adopting the Interpretation on July 1, 2000 the Company was
required to apply variable accounting to these options at year-end and
for each period going forward until they are exercised, forfeited or
expire unexercised. There was no impact during the current quarter.
9. Effective as of November 1, 2000, the expiration date of the Credit
Agreement has been extended to April 30, 2001. The line of credit is
collateralized by inventory and certain receivables. Management expects
that the expiration date will be extended from April 30, 2001 to
October 31, 2001. However, should negotiations with the lender not
proceed as expected, management believes there are a number of viable
refinancing alternatives, though there can be assurance that such
alternatives would be on terms as favorable as the present
arrangements.
10. In June 1998, the Financial Accounting Standards Board Issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"). SFAS 133 requires companies to recognize all derivatives
contracts as either assets or liabilities in the balance sheet and to
9
<PAGE> 12
measure them at fair value. If certain conditions are met, a
derivative may be specifically designated as a hedge, the objective of
which is to match the timing of gain or loss recognition on the
hedging derivative with the recognition of (i) the changes in the fair
value of the hedged asset or liability that are attributable to the
hedged risk or (ii) the earnings effect of the hedged forecasted
transaction. For a derivative not designated as a hedging instrument,
the gain or loss is recognized in income in the period of change.
11. SFAS 133, as amended by SFAS 137, is effective for financial statements
for fiscal years beginning after June 15, 2000. Historically, the
Company has not entered into derivatives contracts either to hedge
existing risk or for speculative purposes. Accordingly, the Company's
adoption of the new standard on July 2, 2000 did not affect its
financial statements.
---------
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors that have affected the Company's financial condition and
earnings during the periods included in the accompanying consolidated balance
sheets and statements of operations.
Forward Looking Statements. The statements in this Form 10-Q that are
not historical fact are forward looking statements. Such statements appear in a
number of places in this report and include statements regarding the intent,
belief or expectations of the Company and its management with respect to, among
other things, the Company's operating performance, anticipated growth
strategies, trends in the food service industry and other trends that may
affect the Company's financial condition or results of operations. Such
statements are subject to numerous risks and uncertainties which could cause
actual results to differ materially from those anticipated or projected,
including, among others, recent changes in management, the availability of
financing, new franchising programs and other new products and programs,
competition for customers, labor force and store sites, the effects of changes
in the economy such as inflation and unemployment rates, and weather conditions
and seasonal effects.
Readers are cautioned not to place undue reliance on these forward
looking statements which speak only as of the date hereof and reflect only
management's belief and expectations based upon presently available
information.
Readers are also urged to carefully review and consider the various
disclosures made by the Company which attempt to advise interested parties of
the factors which affect the Company's business, including the disclosures made
in other periodic reports on Forms 10-K, 10-Q and 8-K filed with the Securities
and Exchange Commission.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentages of revenues represented by certain items in the Company's
consolidated statements of operations.
<TABLE>
<CAPTION>
Thirteen week periods ended
==================================
September 30, October 2,
2000 1999
============= ==========
<S> <C> <C>
Net sales 99.4% 99.6%
Franchise revenues 0.6 0.4
----- -----
Total revenues 100.0 100.0
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C> <C>
Total cost of restaurant operations 91.9 90.8
----- -----
Restaurant operating income 8.1 9.2
General and administrative expenses 9.3 10.4
----- -----
Operating income (loss) (1.2) (1.2)
Other income (expense) (0.4) (0.3)
----- -----
Income (loss) before taxes (1.6) (1.5)
----- -----
Taxes -- --
----- -----
Net income (loss) (1.6)% (1.5)%
===== =====
</TABLE>
NET SALES
Net sales for company-owned restaurants for the thirteen weeks ended
September 30, 2000 declined 12.5% to $11,239,666 from $12,838,407 recorded
during the comparable prior year period. Comparable sales per restaurant
declined by 9.2% from the same period last year, reflecting the effects of
operational issues in certain markets, lower catering sales, as well as
continuing competitive pressures. In addition, the number of company-owned
restaurants declined from 101 at the end of the first quarter of fiscal 2000 to
95 at the end of the first quarter of fiscal 2001. At the end of fiscal 2000
there were 97 restaurants. During the current quarter one restaurant was closed
and a second restaurant was contracted for sale. Management expects to sell or
franchise additional restaurants during the balance of the fiscal year; present
expectations are that approximately three more restaurants will be sold, and
three to five more will be franchised, by the end of the current fiscal year.
TOTAL COST OF RESTAURANT OPERATIONS
The components of cost of restaurant operations for the thirteen week
periods ended September 30, 2000 and October 2, 1999, respectively, are shown
in the following table:
<TABLE>
<CAPTION>
For the thirteen week periods ended
=================================================================
September 30, 2000 October 2, 1999
============================ ============================
Amount % of Net Amount % of Net
Sales Sales
============================ ============================
<S> <C> <C> <C> <C>
Food and Paper $ 3,730,826 33.2% $ 4,528,676 35.3%
Labor 2,734,187 24.3 2,978,412 23.2
Store Expenses 3,220,516 28.7 3,528,459 27.5
Restaurant Depreciation 543,039 4.8 631,040 4.9
----------- -------- ----------- --------
$10,228,568 91.0% $11,666,587 90.9%
=========== ======== =========== ========
</TABLE>
Cost of restaurant operations declined 12.3% to $10,228,568 from
$11,666,587 incurred during the comparable prior year quarter. Cost of food and
paper as a percent of net sales declined from 35.3% to 33.2% due to improved
buying practices. Labor as a percent of net sales
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<PAGE> 14
increased to 24.3% from 23.2% during the prior year quarter primarily due to
the relatively fixed nature of these expenses. Store expenses, which include
mostly fixed expenses such as rent, taxes and insurance, declined by 8.7% but
increased as a percent of sales to 28.7% compared to 27.5% during the
comparable period. Depreciation and amortization declined 13.9% to $543,037
from $631,040 primarily due to impairment adjustments recorded in fiscal 2000
and the fact that six fewer restaurants were in operation at the end of the
first quarter of fiscal 2001 compared to the same time in fiscal 2000. All of
these factors resulted in an increase in the cost of restaurant operations as a
percent of net sales to 91.0% for the first quarter of fiscal 2000 compared to
90.9% for the comparable prior year period.
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist of overhead expenses
associated with each of the Company's operating divisions, expenses associated
with catering operations and corporate administration. Each of these expense
categories declined compared to the prior year due to fewer restaurants and
lower sales, as well as certain cost savings actions and certain nonrecurring
income of $84,881. Total general and administrative expenses declined $293,523
or 21.8% compared to the comparable prior year period.
FRANCHISE OPERATIONS
A brief summary of franchise operations for the first quarter of
fiscal 2000 compared to the comparable prior year period follows:
<TABLE>
<CAPTION>
September 30, October 2,
Description 2000 1999
================================== ============= ==========
<S> <C> <C>
Royalty income $ 58,311 $52,372
Initial franchise fees 10,000 --
--------- -------
Total franchise revenues 68,311 52,372
Franchise expenses 161,363 39,607
--------- -------
Franchise income (loss) $ (93,052) $12,765
========= =======
</TABLE>
During the first quarter of fiscal 2001 there were 18 franchised
restaurants in operation compared to 17 at the end of the first quarter of
fiscal 2000. Royalty income increased 11.3% to $58,311, compared to $52,372
recorded in the comparable prior year quarter.
Franchise expenses increased to $161,363 in the first quarter of fiscal
2001 compared to $39,607 in the first quarter of fiscal 2000. This is
primarily due to relocation expenses of $39,450 for the new Vice President
of Business Development for his move from Phoenix to Birmingham, consulting fees
of $33,106 for concept research, and increased travel of $15,615 to review
certain markets that are under consideration for sale or franchising.
TAXES ON INCOME
The effective tax rate for each of the thirteen weeks ended September
30, 2000 and October 2, 1999 was -0- percent.
GAIN (LOSS) FROM SALE OF ASSETS
During the quarter, one restaurant and certain other fixed assets were
sold resulting in a net gain of $495 for the quarter compared to a loss of
$24,157 for the first quarter of fiscal 2000.
INTEREST (EXPENSE)
12
<PAGE> 15
Interest expense was $43,686 compared to $16,088 incurred during the
comparable prior year quarter primarily due to significantly higher average
daily balances on the line of credit and a higher interest rate. At the end of
the first quarter of fiscal 2001 there was a $1,078,605 balance on the line
compared to $1,427,392 at year-end and to $398,004 at the end of the first
quarter of fiscal 1999. See Note 9 for additional details.
IMPACT OF INFLATION
In most cases, management has been able to pass on the impact of wage
and food inflation through modest price increases, but there is no assurance
that it will be able to do so in the future.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has generated most of its cash from
operations, and to a lesser extent from bank borrowings on the Company's
short-term line of credit. Cash flow from operations, equity financings and
bank borrowings have historically funded expansion. The Company currently does
not have long-term debt. In the future the Company anticipates that it may rely
on long-term debt or lease financing to fund the purchase of point-of-sale
management information systems, remodeling or Company expansion.
At the end of the first quarter liquidity was improved compared to
year-end results but decreased compared to the comparative prior year quarter.
The current ratio was .55 to 1.00 compared to .53 to 1.00 at the end of fiscal
2000 and .68 to 1.00 at the end of the first quarter of fiscal 1999.
The Company's principal capital requirements are for the remodeling of
Company stores and to a lesser degree, for new restaurants. Capital
expenditures for these purposes were $173,872 compared to $105,611 expended
during the comparable prior year quarter.
The Company has historically met its capital need from short-term bank
borrowings and internally generated funds. Cash provided by operations for the
first quarter of fiscal 2001 was $281,151 compared to $32,062 used by
operations for the comparable prior year quarter.
---------
PART II: OTHER INFORMATION
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule, submitted to the
Securities and Exchange Commission in electronic
format
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter
ended September 30, 2000.
13
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
DATE: WALL STREET DELI, INC.
November 13, 2000 /s/ Jeffrey V. Kaufman
---------------------------------------
JEFFREY V. KAUFMAN
President and Chief Executive Officer
November 13, 2000 /s/ Thomas J. Sandeman
---------------------------------------
THOMAS J. SANDEMAN
Chief Financial Officer
14
