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 April 2, 2000.
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:
2,663,605 shares of common stock, no par value, as of May 5,
2000.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [ X ]
Part I--Financial Information
ITEM I. FINANCIAL STATEMENTS
CUCOS INC.
BALANCE SHEET
April 2, 2000
UNAUDITED
Assets
Current Assets
Cash and Cash Equivalents $288,964
Receivables:
Trade, Less Allowance for Doubtful Accounts 171,666
Due from Affiliates 0
171,666
Inventories 171,517
Prepaid Expenses 223,768
Other Current Assets 3,968
TOTAL CURRENT ASSETS 859,883
Property, Equipment and Other
Equipment 2,512,234
Leasehold Improvements 3,553,926
6,066,160
Less Accumulated Depreciation and
Amortization and Impairment Reserves 3,923,777
2,142,383
Trade Receiables, Less Allowance, Less Current Portion 205,840
Deferred Costs Less Accumulated Amortization
of $89,772 232,402
Other Assets 74,423
TOTAL ASSETS $3,514,931
Liabilities and Shareholders' Equity
Current Liabilities
Notes Payable to Banks $100,000
Trade Accounts Payable 1,447,440
Accrued Expenses 532,379
Accrued Payroll 145,351
Current Portion of Long-Term Debt 352,272
TOTAL CURRENT LIABILITIES 2,577,442
Long-Term Debt, Less Current Portion 3,058,433
Deferred Revenue 212,423
Net Capital Deficiency
Convertible Preferred Stock, No Par Value - 1,000,000
Shares Authorized, 400,000 Issued and Outstanding 400,000
Common Stock, No Par Value - 20,000,000 Shares
Authorized, 2,663,605 Shares Issued and Outstanding 5,264,649
Additional Paid-in Capital 110,788
Retained Earnings (Deficit) (8,108,804)
NET CAPITAL DEFICIENCY (2,333,367)
TOTAL LIABILITIES AND NET CAPITAL DEFICIENCY $3,514,931
See Notes to Financial Statements
Part I--Financial Information
CUCOS INC.
STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
12 Weeks 12 Weeks 40 Weeks 40 Weeks
Ended Ended Ended Ended
Apr.2,2000 Apr.5,1999 Apr.2,2000 Apr.4,1999
Restaurant Operations
<S> <C> <C> <C> <C>
Sales of Food and Beverages $3,467,536 $4,594,403 $12,293,652 $15,539,140
Restaurant Expenses:
Cost of Sales 916,056 1,255,569 3,350,412 4,367,294
Restaurant Labor and Benefits 1,293,376 1,653,556 4,582,988 5,553,656
Other Operating Expenses 419,708 744,826 1,865,637 3,016,938
Occupancy Costs 387,233 543,782 1,306,917 1,789,424
Preopening Costs 0 0 0 54,525
Total Restaurant Expenses 3,016,373 4,197,733 11,105,954 14,781,837
Income from Restaurant Operations 451,163 396,670 1,187,698 757,303
Royalties and Franchise Revenues, Net
of Expenses of $322 and $356 24,591 28,430 96,826 101,915
Commissary and Other Income (4,689) 22,985 44,254 88,988
471,065 448,085 1,328,778 948,206
Operations Supervision Expenses 75,009 229,369 428,826 649,104
Corporate Expenses 250,773 598,526 919,641 1,432,699
Charges Related to Settlement with
Former Management 0 0 374,052 0
Charges Related to Closed Units and
Asset Impairment (28,716) 1,859,948 (100,334) 1,859,948
Operating Income (Loss) 173,999 (2,239,758) (293,407) (2,993,545)
Interest Expense 111,403 113,852 402,400 376,366
Income (Loss) Before Income Taxes 62,596 (2,353,610) (695,807) (3,369,911)
Income Taxes 0 1,983 0 2,651
Net Income (Loss) $62,596 $(2,355,593) $(695,807) $(3,372,562)
Weighted Average Shares of Common Stock --
Basic and Diluted 2,663,605 2,651,730 2,663,605 2,651,730
Net Income (Loss) Per Share -- Basic and
Diluted 0.02 (0.89) (0.26) (1.27)
</TABLE>
See Notes to Financial Statements
Part I--Financial Information
CUCOS INC.
STATEMENTS OF CASH FLOWS
UNAUDITED
<TABLE>
<CAPTION>
40 Weeks 40 Weeks
Ended Ended
Apr.2,2000 Apr.4,1999
<S> <C> <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES $(473,782) $356,471
INVESTING ACTIVITIES
Proceeds from Sale of Fixed Assets 58,600 1,283
Purchase of Property and Equipment (94,920) (154,616)
NET CASH USED IN INVESTING ACTIVITIES (36,320) (153,333)
FINANCING ACTIVITIES
Proceeds from Sale of Preferred Stock 400,000 0
Proceeds from Sale of Common Stock 11,875 0
Change in Short Term Debt Payable to Banks 100,000 (100,000)
Proceeds from Borrowing 0 74,364
Principal Payments on Borrowings (229,219) (316,023)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 282,656 (341,659)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (227,446) (138,521)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 516,410 626,653
CASH AND CASH EQUIVALENTS AT END OF PERIOD $288,964 $488,132
NON CASH FINANCING AND INVESTING ACTIVITIES
Property and Equipment Acquired Through a Capital Lease $48,349 $ 0
</TABLE>
See Notes to Financial Statements
Reclassifications have been made to conform to current classifications.
CUCOS INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. The Company: Cucos Inc. (the "Company") owns and franchises
Mexican restaurants under the name "Cucos". At April 2,
2000, twelve Company-owned restaurants and five franchised
restaurants were in operation. At the end of the Comparable
Quarter, there were fourteen company-owned and four
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 consists of
one sixteen-week quarter that ended October 17, 1999, two
twelve-week quarters ending January 9, 2000, and April 2,
2000, and one thirteen-week quarter that will end 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 generally accepted accounting
principals. 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 forty weeks ended April 2,
2000. 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 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. As of April 2,
2000, the commercial lender has agreed that the Company will be
permitted to make interest only payments on a month-to-month
basis, contingent upon the Company making good faith efforts
to sell the Company or its assets. The Company is
attempting to negotiate additional payment deferrals in
fiscal year 2000. There can be no assurances that the
Company will be able to obtain 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 February 3, 2000, the Company dismissed its appeal of the
judgment rendered in the case of "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. Mr. Elie V. Khoury dismissed his
reconventional demand against the Company. The Company and
Mr. Khoury entered into an agreement of full settlement and
release with respect to the matters involved in the lawsuit.
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.
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 twelve weeks ended April 2,
2000 (the "Current Quarter") decreased $1,126,867 (24.53%) to
$3,467,536 from $4,594,403 for the twelve weeks ended April 4,
1999 (the "Comparable Quarter"). This decline is due primarily
to twelve restaurants operating in the Current Quarter and
fifteen restaurants in operation during the Comparable Quarter.
Sales in the restaurants open throughout both periods ("existing
restaurants") declined $541,011 (13.5%). Guest counts in the
existing restaurants declined 15.5% in the Current Quarter versus
the Comparable Quarter. In addition, video poker revenues
declined 62.2% in the Current Quarter compared to the Comparable
Quarter. This reduction was due to the ban on video poker
devices in five parishes in which the Company operates in
Louisiana, which became effective June 30, 1999.
Two company-owned restaurants were closed during the First
Quarter of the Current Fiscal Year -- Birmingham, Alabama, on
July 18, 1999, and Montgomery, Alabama, on October 16, 1999.
Both restaurants were sold to former employees who are operating
the locations as franchisees of the Company. The Company owned
restaurant in Meridian, Mississippi, closed during the Third
Quarter of Fiscal Year 1999.
Sales of Food and Beverages for the Current Three Quarters ended
April 2, 2000, declined $3,245,488 (20.89%) to $12,293,652 from
$15,539,140 for the Comparable Three Quarters ending April 4,
1999. Sales of Food and Beverages in the existing restaurants
declined $1,456,975 (10.86%) for the Current Three Quarters
versus the Comparable Three Quarters. Guest counts in the
existing restaurants declined 14.91%. Included in the revenue
decline was a reduction in video poker revenues of $281,977
associated with the ban on devices in the five parishes.
Restaurant Expenses in the Current Quarter decreased $1,181,360
(28.14%) to $3,016,373 from $4,197,733 in the Comparable Quarter.
Restaurant Expenses in the existing restaurants open throughout
both period decreased 14.34% in the Current Quarter compared to
the Comparable Quarter.
Restaurant Expenses in the Current Three Quarters decreased
$3,675,883 (24.87%) to $11,105,954 from $14,781,837 in the
Comparable Three Quarters. Restaurant Expenses in the existing
restaurants open throughout both period decreased 12.16% in the
Current Three Quarters compared to the Comparable Quarter.
A summary of the components of restaurant expenses are:
Current Comparable
Description Quarter Quarter
Cost of Sales 26.42% 27.33%
Restaurant Labor and Benefits 37.30 35.99
Other Operating Expenses 12.10 16.21
Occupancy Costs 11.17 11.84
Total Restaurant Expenses 86.99% 91.37%
Income from Restaurant Operations increased to $451,163 in the
Current Quarter from $396,670 in the Comparable Quarter -- a net
improvement of $54,493 (13.74%). Income from restaurants open
throughout both periods decreased $35,569 (7.37%).
Income from Restaurant Operations for the Current Three Quarters
increased $430,395 (56.83%) to $1,187,698 from $757,303 in the
Comparable Three Quarters. Income from restaurants open
throughout both periods increased $31,857 (2.70%) to $1,211,968
from $1,180,111.
Net Royalties and Franchise Revenues decreased $3,839 (13.5%) to
$24,591 in the Current Quarter compared to $28,430 in the
Comparable Quarter. The decrease in royalty revenues in the
Current Quarter is primarily due to the closed franchised
restaurant in Des Moines, Iowa, which was open in the Comparable
Quarter. The two franchised restaurants opened during the
Current Fiscal Year have not generated royalty income at the
level of the Des Moines restaurant.
Net Royalties and Franchise Revenues for the Current Three
Quarters decreased $5,089 (4.99%) to $96,826 versus $101,915 for
the Comparable Three Quarters. The decline is a result of the
closed Des Moines franchised restaurant and the closure of the
Boynton Beach, Florida, franchised restaurant that closed at the
end of the Second Quarter of the Current Fiscal Year.
Commissary and Other Income declined $27,674 (120.4%) in the
Current Quarter versus the Comparable Quarter. The decrease is
primarily due to a reduction in the management fee income
associated with a franchised restaurant, the closure of the
Commissary and the resulting elimination of the internal sales,
reduced sales of Marketing items, and a reduction in finance
charges and interest income.
Commissary and Other Income declined $44,734 (50.27%) to $44,254
in the Current Three Quarters from $88,988 in the Comparable
Three Quarters. The decrease is primarily due to reduced
management fee income, finance charges, and interest income as
well as a reduction of sales from the Commissary.
Operations Expenses decreased $154,360 (67.3%) to $75,009 in the
Current Quarter from $229,369 in the Comparable Quarter. The
decline in expenses is primarily the result of a decrease in the
allowance for bad debt provision, and reduced costs associated
with management training, labor and benefits, and supervisory
expenses. During the Current Quarter, the Company settled with
the franchisee in Des Moines, Iowa. The $40,416 settlement was
fully reserved and did not result in additional charges to bad
debt.
Operations Expenses decreased $220,278 (33.94%) to $428,826 in
the Current Three Quarters from $649,104 in the Comparable Three
Quarters. This decrease is a result of reduced costs in
management training, supervisory expenses, and a decrease in the
allowance for bad debt provision.
Corporate Expenses decreased $347,753 (58.1%) to $250,773 in the
Current Quarter compared to $598,526 in the Comparable Quarter.
During the Current Three Quarters, Corporate Expenses declined
$513,058 (35.81%) to $919,641 from $1,432,699 in the Comparable
Three Quarters. This decline is attributable to reductions of
personnel in the marketing, construction, accounting, finance and
legal departments. In addition, during the Comparable Quarter,
the Company expensed one time non-cash charges of $250,000 for
legal fees, abandoned sites, and costs associated with television
commercial production.
The Company recorded a one-time expense of $374,052 in the
Current Three Quarters in connection with the settlement with the
former Board and the former Chairman and CEO. This expense includes
amounts attributable to the transfer of the Company's interest in
a franchise restaurant to Vincent J. Liuzza, Jr. and the
Company's forgiveness of debts owed to the Company by Mr. Liuzza
and his affiliates. There were no similar charges recorded in
the Current Quarter or the Comparable Quarter or Comparable Three
Quarters.
Charges Related to Closed Units during the Current Quarter
resulted in income of $28,716 versus expense of $1,859,948 during
the Comparable Quarter. The $28,716 resulted from an additional gain
that the Company recorded during the Current Quarter
on the sale of the Montgomery, Alabama assets. During the
Comparable Quarter, the Company adjusted the value of assets on
impaired properties located in Birmingham and Montgomery,
Alabama, and Meridian, Mississippi.
Charges Related to Closed Units during the first three quarters
of fiscal 1999 were $1,960,282. These charges resulted from
settlements that management negotiated with landlords, offset by
a gain on the sale of the Company's Montgomery, Alabama,
assets. No units were closed during the Current Three Quarters.
As a result of the above factors, the Operating Income in the
Current Quarter was $173,999 versus a loss of $2,239,758 in the
Comparable Quarter - an improvement of $2,413,757. Operating
loss was $293,407 for the Current Three Quarters and a loss of
$2,993,545 in the Comparable Three Quarters.
Interest Expenses decreased $2,449 (2.15%) to $111,403 in the
Current Quarter compared to $113,852 in the Comparable Quarter.
Interest expense increased $26,034 (6.92%) to $402,400 in the
Current Three Quarters compared to $376,366 in the Comparable
Three Quarters. This increase is due to additional interest
(enhancement charges) on the credit facility, which will be
discussed in detail in Part II.
The Income Before Income Taxes was $62,596 in the Current Quarter
compared to a Loss of $2,353,610 in the Comparable Quarter. Loss
Before Income Taxes in the Current Three Quarters was $695,807
versus $3,369,911 in the Comparable Three Quarters.
Income Tax Expense recorded in the Comparable Quarter and
Comparable Three Quarters was $1,983 and $2,651, respectively.
There were no expenses for Income Tax in the Current Quarter or
the Current Three Quarters.
The Net Income for the Current Quarter increased $2,421,192
(102.66%) to $62,596 versus a net loss in the Comparable Quarter
of $2,355,593. The Net Loss for the Current Three Quarters was
$695,807 compared to a Net Loss of $3,372,562 in the Comparable
Three Quarters.
LIQUIDITY AND CAPITAL RESOURCES
During the Current Three Quarters, the Company's operating
activities used $473,782 in cash, versus the Comparable Three
Quarters, when operating activities provided $356,471 in cash.
The Company reduced trade accounts payable by $714,638 partially
funded by a $200,000 advance payment of royalties from a
franchisee. During the Comparable Three Quarters, the Company
received $350,000 in advance payment of royalties and management
fees from the franchisee and advance video poker receipts from
the video poker vendor.
Cash used by Investing activities was $36,320 in the Current
Three Quarters compared to cash used of $153,333 in the
Comparable Three Quarters. The Company received $55,000 from the
sale of the leasehold improvements and equipment of the
Montgomery, Alabama, restaurant, which was franchised in October,
1999. Additional payments in the aggregate of $20,000 are due from the
franchisee in April and May, 2000.
Cash provided by Financing activities was $282,656 in the Current
Three Quarters compared to cash used of $341,659 in the
Comparable Three Quarters. The Company received $400,000 from the
sale of preferred stock, $100,000 from short term bank borrowings
and $11,875 from the sale of common stock during the Current
Three Quarters. Payments included principal payments on capital
leases as well as current and back installments on the Company's credit
facility with its commercial lendor. 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 required
principal and interest payments for May, June, and July, 1999,
until April, 2001, and to defer the 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 payments on October,
1, 1999, nor did it make its required principal and interest
payments on November 1, 1999, and was therefore in default on its
credit facility. However, on January 8, 2000, the Company did
make all required back and current payments on its credit
facility that resulted in a month-to-month forbearance agreement
based upon the progress made in selling or merging the Company.
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.
On February 3, 2000, the Company dismissed its appeal
of the judgment rendered in the case of "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. Mr. Elie V.
Khoury dismissed his reconventional demand against the
Company. The Company and Mr. Khoury entered into an
agreement of full settlement and release with respect
to the matters involved in the lawsuit.
ITEM 2. CHANGES IN SECURITIES.
As of the date hereof, the Company has issued 400,000
shares of Series A Convertible Preferred Stock. These
preferred shares, if they are not converted into Common
Stock, will have a $400,000 preference in any
liquidation of the Company before any amounts would be
paid to the holders of common stock.
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. As of the date hereof, the lender has
agreed that the Company will be permitted to make
interest payments only on a month-to-month basis,
contingent upon the Company making good faith efforts
to sell the Company or its assets. The Company is
attempting to negotiate additional payment deferrals in
fiscal year 2000. There can be no assurances that the
Company will be able to obtain 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 current 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, Thomas L. McCormick, and Calvin O. Cox.
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.
Current Report on Form 8-K filed 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)
/s/ James W. Osborn
Date: May 16, 2000 By: By: 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> APR-02-2000
<CASH> 288,964
<SECURITIES> 3,968
<RECEIVABLES> 505,818
<ALLOWANCES> 334,153
<INVENTORY> 171,517
<CURRENT-ASSETS> 859,883
<PP&E> 6,066,160
<DEPRECIATION> 3,923,777
<TOTAL-ASSETS> 3,514,931
<CURRENT-LIABILITIES> 2,577,442
<BONDS> 0
0
400,000
<COMMON> 5,264,649
<OTHER-SE> (2,333,367)
<TOTAL-LIABILITY-AND-EQUITY> 3,514,931
<SALES> 3,467,536
<TOTAL-REVENUES> 3,487,438
<CGS> 916,056
<TOTAL-COSTS> 3,016,373
<OTHER-EXPENSES> 294,770
<LOSS-PROVISION> 2,076
<INTEREST-EXPENSE> 111,403
<INCOME-PRETAX> 62,596
<INCOME-TAX> 0
<INCOME-CONTINUING> 62,596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 62,596
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
