SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[x] Quarterly Report under Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended October 17, 1999.
OR
[ ] Transition Report Pursuant to Section 13 Or 15 (D) of the
Securities Exchange Act Of 1934
Commission file number 0-12701
For the transition period from _______________ to _____________
-----------------------------
CUCOS INC.
(Exact name of small business issuer as specified in its charter)
LOUISIANA 72-0915435
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
110 Veterans Blvd., Suite 222, Metairie, Louisiana 70005
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code--504-835-0306
Check whether the issuer: (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Exchange Act during the
post 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 [ ]
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
2,651,730 shares of common stock, no par value, as of December 1,
1999.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
Part I--Financial Information
ITEM I. FINANCIAL STATEMENTS
CUCOS INC.
BALANCE SHEET
Oct. 17, 1999
UNAUDITED
Assets
Current Assets
Cash and Cash Equivalents $376,020
Receivables:
Trade, Less Allowance for Doubtful Accounts 231,650
Due from Affiliates 61,068
292,718
Inventories 198,926
Prepaid Expenses 130,330
Other Current Assets 128,408
TOTAL CURRENT ASSETS 1,126,402
Property, Equipment and Other
Equipment 2,526,250
Leasehold Improvements 3,526,558
6,052,808
Less Accumulated Depreciation and Amortization and
Impairment Reserves 3,729,910
2,322,898
Due from Affiliates 53,589
Investment in LaMexiCo, LLC 242,163
Deferred Costs Less Accumulated Amortization 246,379
Other Assets 243,798
TOTAL ASSETS $4,235,229
Liabilities and Shareholders' Equity
Current Liabilities
Trade Accounts Payable $1,795,367
Accrued Expenses 568,767
Accrued Payroll 174,681
Current Portion of Long-Term Debt 219,975
Long-term Debt in Default 3,105,030
TOTAL CURRENT LIABILITIES 5,863,820
Long-Term Debt, Less Current Portion 290,228
Deferred Revenue 277,998
Net Capital Deficiency
Preferred Stock, No Par Value - 1,000,000 Shares
Authorized, None Issued or Outstanding -
Common Stock, No Par Value - 20,000,000 Shares
Authorized, 2,651,730 Shares Issued and Outstanding 5,252,774
Additional Paid-in Capital 110,788
Retained Earnings (Deficit) (7,560,379)
NET CAPITAL DEFICIENCY (2,196,817)
TOTAL LIABILITIES AND NET CAPITAL DEFICIENCY $4,235,229
See Notes to Financial Statements
Part I--Financial Information
[CAPTION]
<TABLE>
CUCOS INC.
STATEMENTS OF OPERATIONS
UNAUDITED
16 Weeks 16 Weeks
Ended Ended
Oct. 17, 1999 Oct. 18, 1998
Restaurant Operations
<S> <C> <C>
Sales of Food and Beverages $5,399,329 $6,313,367
Restaurant Expenses:
Cost of Sales 1,505,151 1,792,358
Restaurant Labor and Benefits 2,002,657 2,242,371
Other Operating Expenses 946,624 1,315,372
Occupancy Costs 547,760 717,177
Preopening Costs 43,620
-
Total Restaurant Expenses 5,002,192 6,110,898
Income from Restaurant Operations 397,137 202,469
Royalties and Franchise Revenues, Net of Expenses
of $445 and $1,246 49,383 42,473
Commissary and Other Income 32,574 37,488
479,094 282,430
Operations Supervision Expenses 197,893 267,442
Corporate Expenses 350,214 439,246
Charges Related to Closed Units and Asset Impairment (72,968) 0
Operating Income (Loss) 3,955 (424,258)
Interest Expense 151,336 151,873
Loss Before Income Taxes (147,381) (576,131)
Income Taxes 0 0
Net Loss $ (147,381) $(576,131)
Weighted Average Shares of Common Shares and Common
Share Equivalents Outstanding - Basic and Diluted 2,651,730 2,306,000
Net (Loss) Per Share - Basic and Diluted ($0.06) ($0.25)
</TABLE>
See Notes to Financial Statements
Part I--Financial Information
[CAPTION]
<TABLE>
CUCOS INC.
STATEMENTS OF CASH FLOWS
UNAUDITED
16 Weeks 16 Weeks
Ended Ended
Oct. 17, 1999 Oct. 18, 1998
<S> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $(96,310) $72,188
INVESTING ACTIVITIES
Sale of Property and Equipment 25,000 0
Purchases of Property and Equipment (44,389) (62,958)
NET CASH USED IN INVESTING ACTIVITIES (19,389) (62,958)
FINANCING ACTIVITIES
Proceeds from Borrowings - 74,364
Principal Payments on Borrowings (24,691) (129,270)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (24,691) (54,906)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (140,390) (45,676)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 516,410 626,653
CASH AND CASH EQUIVALENTS AT END OF PERIOD $376,020 $580,977
NON CASH FINANCING AND INVESTING ACTIVITIES:
Property and equipment acquired through a capital lease $48,349 $ -
</TABLE>
See Notes to Financial Statements
CUCOS INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. The Company: Cucos Inc. (the "Company") owns and franchises
Mexican restaurants under the name "Cucos". At October 17,
1999, twelve Company-owned restaurants and five franchised
restaurants were in operation. At the end of the Comparable
Quarter, there were fifteen company-owned and five
franchised restaurants in operation.
2. Fiscal Year: The Company uses a 52/53 week year for
financial reporting purposes with the Company's fiscal year
ending on the Sunday closest to June 30 of each year.
Fiscal 2000 will end on July 2, 2000, and will consist of
one sixteen-week quarter ending October 17, 1999, and two
twelve-week quarters ending January 9, 2000, and April 2,
2000, and one thirteen-week quarter ending July 2, 2000.
Fiscal 2000 will have a 53 week year, while fiscal year 1999
was a 52 week year.
3. The accompanying unaudited financial statements have been
prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. Certain information and
footnote disclosures normally included in the financial
statements have been omitted pursuant to such rules and
regulations. It is suggested that these financial
statements be read in conjunction with the Company's Annual
Report for the fiscal year ended June 27, 1999. In the
opinion of management, these financial statements contain
all normal recurring adjustments necessary to fairly present
the financial results for the sixteen weeks ended October
17, 1999. Operating results for the period shown are not
necessarily indicative of the operating results expected for
the full fiscal year ending July 2, 2000.
4. Per share amounts are based on the weighted average number
of shares of common stock and dilutive common stock
equivalents outstanding.
5. The Company has a credit facility with a commercial lending
institution. This credit facility consists of a term loan to
be repaid in monthly payments through December 2007, and is
secured by restaurant operating properties. In May 1999, the
Company and its commercial lender entered into a forbearance
agreement whereby the commercial lender agreed to defer the
Company's requirement to make required principal and
interest payments for May, June and July 1999 until April
2001, and to defer required principal payments for August,
September and October 1999 until April 2001. The deferred
payments will bear interest at 14.6% until paid. The Company
did not make its required interest payment on October 1,
1999, nor did it make its required principal and interest
payment on November 1, 1999, and is therefore in default on
its credit facility. Under the terms of the credit facility,
the amount outstanding, $3,105,000 at October 17, 1999,
begins to bear interest at 14.6%, is immediately due, and
the lender may take possession of the assets pledged as
collateral, which represent substantially all of the assets
of the Company. The Company is attempting to negotiate a
waiver of the credit facility default, and obtain additional
payment deferrals in fiscal year 2000. There can be no
assurances that the Company will be able to obtain a waiver
or additional deferrals.
6. Because of the Company's recurring losses from operations,
its net capital deficiency, and its default on its credit
facility, there is substantial doubt about the Company's
ability to continue as a going concern. The Company has
taken steps to refocus its operations, reverse sales
declines and increase restaurant profitability. However,
considering, among other things, the Company's historical
operating losses and the current lack of commitments from
third parties to provide short-term or long-term financial
resources, there can be no assurance that this action will
have the expected effect on the Company's results of
operations and its cash flows in fiscal 2000.
7. On November 23, 1998, the Company filed a lawsuit against
Elie V. Khoury, a Cucos franchisee and former employee and
officer of the Company, to enforce non-competition
agreements and other agreements involving a prohibition
against the hiring of Company employees. The petition,
entitled, "Cucos, Inc. Vs. Elie V. Khoury", being Civil
Action No. 532-296 on the docket of the 24th Judicial
District court for the Parish of Jefferson, State of
Louisiana, sought a permanent injunction and damages from
the defendant. On December 7, 1998, Mr. Khoury filed an Answer
and Reconventional Demand, alleging that because of the
Company's interference with his, "choice of vocation" he had
incurred damages, injury and loss, as well as future
damages, for which he prayed for unspecified damages from
the Company. A judgment was entered by the court on February
9, 1999, in favor of Mr. Khoury and against the Company,
dismissing the Company's claims against Mr. Khoury. The Judgment
did not address Mr. Khoury's Reconventional Demand for damages.
This matter is now on appeal to the Fifth Circuit Court of
Appeal, State of Louisiana, No. 99-CA-714. The Company
believes that the resolution of the Reconventional Demand
will not have a material adverse effect on the Company's
financial position or results of operations.
A contractor built a restaurant for a franchisee and
affiliated company, L.B.G., Inc. The contractor was not paid
by L.B.G. Inc. and the contractor has sued the Company for
$65,000. The Company believes it will prevail in this
matter.
On April 11, 1990, a franchisee filed a complaint against
the Company and certain of its officers alleging breach of
contract and misrepresentation and seeks damages in excess
of $1.6 million. There has been no activity in this
litigation for more than eight years except for a discovery
request filed in January, 1997, which avoided a dismissal of
the litigation for non-prosecution. The Company believes it
will prevail in this matter.
The Company has various other lawsuits arising from its
normal operations for which the Company carries appropriate
levels of insurance. It is the opinion of management that
the outcome of these matters will not have a material
adverse effect on the Company's financial position or
results of operations.
8. Certain reclassifications of previously reported amounts
have been made to conform to current classifications.
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales of Food and Beverage for the sixteen weeks ended October
17, 1999 (the "Current Quarter") decreased $914,038 (14.5%) to
$5,399,329 from $6,313,367 for the sixteen weeks ended October
18, 1998 (the "Comparable Quarter"). This decline is due
primarily to thirteen restaurants operating in the Current
Quarter, compared to fifteen restaurants in operation during the
Comparable Quarter. Sales in the restaurants open throughout
both periods ("existing restaurants") declined 6.9%. Guest
counts in the existing restaurants declined 13.2% in the Current
Quarter compared to the Comparable Quarter. In addition, video
poker revenues declined 14.5% in the Current Quarter compared to
the Comparable Quarter. This decline was due to the ban on video
poker devices in five parishes in which the Company operates in
Louisiana. The ban became effective June 30, 1999.
Two company-owned restaurants were closed during the Current
Quarter -- Birmingham, Alabama, on July 18, 1999, and Montgomery,
Alabama, on October 16, 1999. Certain of the assets and the
leasehold interests from both restaurants were sold for $75,000
to former employees who are operating the locations as
franchisees of the Company. There were twelve company-owned
restaurants at the end of the Current Quarter.
Restaurant Expenses in the Current Quarter decreased $1,108,706
(18.1%) to $5,002,192 from $6,110,898 in the Comparable Quarter.
Restaurant Expenses in the existing restaurants decreased 8% in
the Current Quarter compared to the Comparable Quarter. During
the Comparable Quarter, programs were instituted to improve the
guest experience and added substantially to restaurant expenses.
These programs included non-recurring expenditures related to
advertising and promotional activities. In addition, several
restaurants experienced closures due to Hurricane Georges in the
Comparable Quarter.
A summary of the components of restaurant expenses are:
Current Comparable
Description Quarter Quarter
Cost of Sales 27.88% 28.39%
Restaurant Labor and Benefits 37.09 35.52
Other Operating Expenses 17.53 20.83
Occupancy Costs 10.14 11.36
Preopening Costs 0.00 0.69
Total Restaurant Expenses 92.64% 96.79%
Net Royalties and Franchise Revenues increased $6,910 (16.3%) to
$49,383 in the Current Quarter, compared to $42,473 in the
Comparable Quarter. During the Current Quarter, the franchised
restaurant in Des Moines, Iowa closed, and two company-owned
restaurants were converted to franchises. The foregoing,
combined with the closure of the franchised restaurant in Boynton
Beach, Florida during the Third Quarter of Fiscal Year 1999,
resulted in five franchise restaurants open at the end of the
Current and Comparable Quarters.
Operations Expenses declined $69,549 (26.1%) to $197,893 in the
Current Quarter from $267,442 in the Comparable Quarter. The
decrease in expenses is primarily the result of reduced costs
associated with supervision management and restaurant management
training labor and benefits.
Corporate Expenses decreased $89,032 (20.3%) to $350,214 in the
Current Quarter, compared to $439,246 in the Comparable Quarter.
This decline is attributable to reductions of personnel in the
marketing, construction, accounting and legal departments and
other cost reduction actions.
Charges Related to Closed Units recorded income during the
Current Quarter of $72,968. Settlements negotiated with
landlords to release the Company of its obligations for two
underperforming closed units resulted in forgiveness of accrued
expenses for those units. Additionally, the Company recorded a
gain on the sale of the Montgomery, Alabama, assets of $25,000 in
the Current Quarter.
Interest Expense was virtually unchanged with $151,336 in the
Current Quarter, compared to $151,873 in the Comparable Quarter.
LIQUIDITY AND CAPITAL RESOURCES
During the Current Quarter, the Company's operating activities
used $96,310 in cash, compared to the Comparable Quarter, when
operated activities provided $72,188 in cash. In the Company's
recent history, despite its net losses, the Company's operating
activities have provided cash flow, in large part because of the
Company's ability to extend its trade accounts payable terms.
During the Current Quarter, however, the Company reduced its
trade accounts payable by $367,000. This reduction in trade
accounts payable was partially offset by a $200,000 advance of
royalties and management fees from a franchisee. Presently, the
Company has no commitments from third parties to provide short-
term borrowings.
Net cash used by investing activities was $19,389 in the Current
Quarter compared to $62,598 in the Comparable Quarter. During the
Current Quarter, the Company received a down payment of $25,000
from the sale of leasehold improvements and equipment of the
Montgomery restaurant, which was franchised in October 1999. An
additional payment of $50,000 is due from the franchisee in
January 2000. The Company currently has no plans for expansion,
but may consider new locations as they become available and if
appropriate financing is available. Presently, the Company has no
commitments from third parties to provide financing for
expansion.
Net cash used in financing activities was $24,691 in the Current
Quarter and included principal payments on capital leases. The
Company has a credit facility with a commercial lending
institution. This credit facility consists of a term loan to be
repaid in monthly payments through December 2007, and is secured
by the restaurant operating properties. In May 1999, the Company
and its commercial lender entered into a forbearance agreement
whereby the commercial lender agreed to defer the Company's
requirement to make required principal and interest payments for
May, June and July 1999 until April 2001, and to defer required
principal payments for August, September and October 1999 until
April 2001. The deferred payments will bear interest at 14.6%
until paid. The Company did not make its required interest
payment on October 1, 1999, nor did it make its required
principal and interest payment on November 1, 1999, and is
therefore in default on its credit facility. Under the terms of
the credit facility, the amount outstanding, $3,105,000 at
October 17, 1999 begins to bear interest at 14.6%, is immediately
due, and the lender may take possession of the assets pledged as
collateral, which represent substantially all of the assets of
the Company. The Company is attempting to negotiate a waiver of
the credit facility default, and obtain additional payment
deferrals in fiscal year 2000. There can be no assurances that
the Company will be able to obtain a waiver or additional
deferrals.
Because of the Company's recurring losses from operations, its
net capital deficiency, and its default on its credit facility,
there is substantial doubt about the Company's ability to
continue as a going concern. The Company has taken steps to
refocus its operations, reverse sales declines and increase
restaurant profitability. However, considering, among other
things, the Company's historical operating losses and the current
lack of commitments from third parties to provide short-term or
long-term financial resources, there can be no assurance that
this action will have the expected effect on the Company's results
of operations and its cash flows in fiscal 2000.
IMPACT OF YEAR 2000
Some of the Company's older computer programs were written using
two digits rather than four to define the applicable year. As a
result, those computer programs have time-sensitive software that
recognize a date using "00" as the year 1900 rather than the year
2000. This could cause a system failure or miscalculations
causing disruptions of operations, including, among other things,
a temporary inability to process transactions, send invoices, or
engage in similar normal business activities (Year 2000 Issues).
The Company has completed an assessment and will have to modify
or replace hardware and software so that certain of its computer
systems, primarily its general ledger and accounting packages,
will function properly with respect to dates in the year 2000
and thereafter. In 1998, the Company replaced substantially all
of its restaurant point of sales systems and believes these new
systems do not have any year 2000 issues. The total Year 2000
project cost is estimated at approximately $50,000 all of which
had been incurred at October 17, 1999. These costs were
primarily for the purchase of new software and hardware that will
be capitalized. The Company financed these costs through a
capital lease. Not included in this amount are any costs to
remedy Year 2000 non-compliance of the Company's telephone
systems, which the Company became aware of during the Current
Quarter. The Company is in the process of assessing the impact,
remedies and contingency plans associated with this non-
compliance.
The project is estimated to be completed not later than December
31, 1999, which is prior to any anticipated impact on its
operating systems. The Company believes that with modifications
to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its
computer systems. However, if such modifications and conversions
are not made, or are not completed timely, the Year 2000 Issue
could have a material adverse impact on the operations of the
Company.
The costs of the project and the date on which the Company
believes it will complete the Year 2000 modifications are based
on management's best estimates, which were derived utilizing
numerous assumptions of future events, continued availability of
certain resources and other factors. However, there can be no
guarantee that these estimates will be achieved and actual
results could differ materially from those anticipated. Specific
factors that might cause such material differences include, but
are not limited to, the availability and cost of personnel
trained in this area and the availability of software and
hardware.
The Company has initiated communications with all of its
significant suppliers to determine the extent to which the
Company's interface systems are vulnerable to those third
parties' failure to remediate their own Year 2000 Issues. There
is no guarantee that the systems of other companies on which the
Company's systems rely will be timely converted and would not
have an adverse effect on the Company's systems.
The Company has no contingency plans, but will consider the need
to create one in the event circumstances arise to indicate the
Company may not be able to complete certain aspects of its plans
related to Year 2000 Issues.
FORWARD-LOOKING STATEMENTS
Forward-looking statements regarding management's present plans
or expectations for new unit openings, remodels, other capital
expenditures, the financing thereof, and disposition of impaired
units, involve risks and uncertainties relative to return
expectations and related allocation of resources, and changing
economic or competitive conditions, as well as the negotiation of
agreements with third parties, which could cause actual results
to differ from present plans or expectations, and such
differences could be material. Similarly, forward-looking
statements regarding management's present expectations for
operating results involve risk and uncertainties relative to
these and other factors, such as advertising effectiveness and
the ability to achieve cost reductions, which also would cause
actual results to differ from present plans. Such differences
could be material. Management does not expect to update such
forward-looking statements continually as conditions change, and
readers should consider that such statements speak only as to the
date hereof.
Part II-Other Information
ITEM 1. LEGAL PROCEEDINGS.
None, except as previously reported.
ITEM 2. CHANGES IN SECURITIES.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The Company has a credit facility with a commercial
lending institution. This credit facility consists of a
term loan to be repaid in monthly payments through
December 2007, and is secured by the restaurant
operating properties. In May 1999, the Company and its
commercial lender entered into a forbearance agreement
whereby the commercial lender agreed to defer the
Company's requirement to make required principal and
interest payments for May, June and July 1999 until
April 2001, and to defer required principal payments
for August, September and October 1999 until April
2001. The deferred payments will bear interest at 14.6%
until paid. The Company did not make its required
interest payment on October 1, 1999, nor did it make
its required principal and interest payment on November
1, 1999 and December 1, 1999 and is therefore in
default on its credit facility. $139,500 of principal
and interest payments are in arrears at December 1,
1999. Under the terms of the credit facility, the
entire amount outstanding, $3,105,000 at October 17,
1999 begins to bear interest at 14.6%, is immediately
due, and the lender may take possession of the assets
pledged as collateral, which represent substantially
all of the assets of the Company. The Company is
attempting to negotiate a waiver of the credit facility
default, and obtain additional payment deferrals in
fiscal year 2000. There can be no assurances that the
Company will be able to obtain a waiver or additional
deferrals.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of
stockholders during the period covered by this report.
However, effective on Friday, November 5, 1999, the
holders of a majority of the Company's outstanding
common stock, acting by written consent, removed six
members of the board of directors, and elected a new
group of directors. The new board is composed of Frank
J. Ferrara, Jr. (Chairman and the sole continuing
director), James W. Osborn, Joseph S. Feth, Lee W.
Randall, Elias Daher and Thomas L. McCormick.
The first action of the new board was to replace the
management team of Vincent J. Liuzza, Jr., Glenda
Liuzza, Margaret Liuzza, Thomas J. Grace, and Daniel L.
Earles with a new senior management team composed of
James Osborn and Elias Daher. Jim Osborn has more than
30 years of experience as an executive in the family
restaurant industry, including his service as Vice
President of Operations of Cucos from 1987 to 1989.
Elias Daher has 15 years of experience in restaurant
operations, serving most recently as Regional Vice
President of Operations of Cucos from September, 1998,
through October, 1999, and as Vice President of
Operations of Cucos since November, 1999. It is
expected that the cost savings resulting from the
change in executives will be approximately $230,000
annually.
The new board unanimously redeemed the Company's "dead
hand" shareholder rights plan (or "poison pill") that
was put in place by the prior board.
New management immediately had to face extremely
serious challenges. The Company had failed to make its
last two required payments under its long-term credit
facility. Payments to landlords and vendors were in
arrears. The Company was unable to raise additional
capital or credit because of certain contracts
between the Company and the Liuzza family members and
their affiliated companies. The contracts between the
Company and the Liuzza group hinder a sale of the
Company. Accordingly, the board determined that it was
necessary to the continued viability of the Company to
enter into a contract with Vincent J. Liuzza, Jr.,
Glenda Liuzza, the Liuzza-related companies and the
previous directors of the Company to rescind certain
contracts and to settle all differences between them.
The Company is now engaged in comprehensive settlement
discussions with these parties. The outcome of those
discussions may be affected by actions of third parties
over which the Company has no control. Moreover, there
can be no assurance that these discussions will be
successful or that, if successful, the discussions will
be resolved in time to permit the Company to be
revitalized.
If the Company is able to achieve a comprehensive
settlement agreement with the Liuzza parties, the
Company intends to raise additional capital, in the
short term, and to actively seek a merger partner in
the longer term.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits.
27 - Financial Data Schedule
b. Reports on Form 8-K.
Filed 8-K with Securities and Exchange Commission
on November 12, 1999.
INDEX TO EXHIBITS
The following exhibits are filed with this Quarterly
Report or is incorporated herein by reference:
Exhibit Number Title
27 Financial Data Schedule
CUCOS INC.
SIGNATURE
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.
CUCOS INC.
(Registrant)
James W. Osborn
Date: December 1, 1999 By:/s/
James W. Osborn, President and
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-02-2000
<PERIOD-END> OCT-17-1999
<CASH> 376,020
<SECURITIES> 3,968
<RECEIVABLES> 647,823
<ALLOWANCES> 355,105
<INVENTORY> 198,926
<CURRENT-ASSETS> 1,126,402
<PP&E> 6,052,808
<DEPRECIATION> 3,729,910
<TOTAL-ASSETS> 4,235,229
<CURRENT-LIABILITIES> 5,863,820
<BONDS> 0
0
0
<COMMON> 5,252,774
<OTHER-SE> (2,196,817)
<TOTAL-LIABILITY-AND-EQUITY> 4,235,229
<SALES> 5,399,329
<TOTAL-REVENUES> 5,781,286
<CGS> 1,505,151
<TOTAL-COSTS> 5,002,192
<OTHER-EXPENSES> 497,371
<LOSS-PROVISION> 2,768
<INTEREST-EXPENSE> 151,336
<INCOME-PRETAX> (172,381)
<INCOME-TAX> 0
<INCOME-CONTINUING> (172,381)
<DISCONTINUED> 0
<EXTRAORDINARY> 25,000
<CHANGES> 0
<NET-INCOME> (147,381)
<EPS-BASIC> .06
<EPS-DILUTED> .06
</TABLE>
