PAGE 1
UNITED STATES SECURITIES AND 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 February 28, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission file number 1-10046
TCBY ENTERPRISES, INC.
(Exact name or registrant as specified in its charter)
Delaware 71-0552115
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 West Capitol Avenue Little Rock, Arkansas 72201
(Address of principal executive offices) (Zip Code)
(501) 688-8229
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 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
On March 31, 1994 there were 25,490,578 shares of the
registrant's common stock outstanding.
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<PAGE> PAGE 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PART I. FINANCIAL INFORMATION Page
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
February 28, 1994 and November 30, 1993 3
Consolidated Statements of Income
Three months ended February 28, 1994
and February 28, 1993 5
Consolidated Statements of Cash Flows
Three months ended February 28, 1994
and February 28, 1993 6
Notes to Consolidated Financial Statements
February 28, 1994 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
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<PAGE> PART 1
FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
February 28, November 30,
1994 1993
-------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 1,108,860 $ 10,167,074
Short-term investments 15,035,611 14,826,289
Receivables:
Trade accounts 13,617,146 10,859,638
Notes 2,708,193 2,577,182
Allowance for doubtful accounts
and notes (657,283) (650,547)
------------ ------------
15,668,056 12,786,273
Refundable income taxes 1,075,530 487,394
Deferred income taxes 611,914 611,914
Inventories 13,388,839 11,476,837
Prepaid expenses and other assets 2,454,161 2,539,461
------------ ------------
TOTAL CURRENT ASSETS 49,342,971 52,895,242
PROPERTY, PLANT AND EQUIPMENT
Land 4,127,523 3,879,175
Buildings 23,177,938 22,519,574
Furniture, vehicles and equipment 50,697,436 49,932,263
Leasehold improvements 10,915,409 11,020,257
Construction in progress 1,394,439 743,493
Allowances for depreciation
and amortization (35,721,856) (34,179,906)
------------ ------------
54,590,889 53,914,856
OTHER ASSETS
Notes receivable, less current portion
(less allowance for doubtful notes
1994 - $1,533,660;1993 - $1,517,943) 10,079,085 10,146,885
Intangibles (less amortization
1994 - $2,861,869; 1993 - $2,705,816) 7,439,075 7,044,549
Other 5,656,676 4,689,604
------------ ------------
23,174,836 21,881,038
------------ ------------
TOTAL ASSETS $127,108,696 $128,691,136
============ ============
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
February 28, November 30,
1994 1993
------------- -------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,141,872 $ 1,199,737
Accrued expenses 5,144,076 5,276,677
Deferred franchise fee income 277,074 265,227
Current portion of long-term debt 2,095,902 2,092,761
------------ ------------
TOTAL CURRENT LIABILITIES 9,658,924 8,834,402
LONG-TERM DEBT, less current portion 10,959,352 11,486,736
DEFERRED INCOME TAXES 3,138,784 3,138,784
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
Preferred stock, par value $.10 per share;
authorized 2,000,000 shares - -
Common stock, par value $.10 per share;
authorized 50,000,000 shares; issued-
1994 - 26,807,272; 1993 - 26,804,385 2,680,727 2,680,439
Additional paid-in capital 24,271,848 24,255,981
Retained earnings 85,810,260 87,705,993
------------ ------------
112,762,835 114,642,413
Less treasury stock, at cost
(1,317,069 shares in 1994 and 1993) (9,411,199) (9,411,199)
------------ ------------
103,351,636 105,231,214
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $127,108,696 $128,691,136
============ ============
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February 28,
1994 1993
-------------------------------
<S> <C> <C>
Sales $ 22,587,248 $ 20,987,494
Cost of sales 13,336,265 11,445,698
------------ ------------
GROSS PROFIT 9,250,983 9,541,796
Franchising revenues:
Initial franchise and license fees 107,812 224,000
Royalty income 1,563,523 1,592,799
------------ ------------
Total franchising revenues 1,671,335 1,816,799
------------ ------------
10,922,318 11,358,595
Selling, general and administrative
expenses 12,035,886 12,570,200
------------ ------------
(1,113,568) (1,211,605)
Interest expense (162,830) (234,473)
Interest income 288,207 347,845
Litigation settlement and costs - (160,000)
Other income 35,615 49,339
------------ ------------
160,992 2,711
------------ ------------
LOSS BEFORE INCOME TAXES (952,576) (1,208,894)
Income taxes:
Current (331,209) (420,334)
Deferred - -
------------ ------------
(331,209) (420,334)
------------ ------------
NET LOSS $ (621,367) $ (788,560)
------------ ------------
NET LOSS PER SHARE $ (0.02) $ (0.03)
------------ ------------
Average shares outstanding 25,489,439 25,632,787
============= =============
Cash dividends paid per share $ 0.05 $ 0.05
------------- ------------
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
February 28,
1994 1993
-------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (621,367) $ (788,560)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,910,653 1,932,912
Amortization of intangibles 156,053 122,270
Provision for doubtful accounts 205,497 274,549
Gain on disposal of property and
equipment (153,400) -
Changes in operating assets and liabilities:
Accounts receivable (2,940,552) (2,442,510)
Inventories (1,912,002) 361,769
Prepaid expenses 85,300 (1,041,646)
Intangibles and other assets (1,575,238) (281,146)
Accounts payable and accrued expenses 809,534 373,401
Deferred revenues 11,847 (122,750)
Income taxes (588,136) (493,460)
------------ ------------
NET CASH USED IN OPERATING ACTIVITIES (4,611,811) (2,105,171)
INVESTING ACTIVITIES
Purchases of property, plant and equipment (2,722,498) (1,524,738)
Proceeds from sale of property and equipment 346,799 -
Origination of notes receivable (806,500) (266,654)
Principal collected on notes receivable 727,572 526,831
Purchases of short-term investments (1,695,732) (7,484,647)
Proceeds from sale of short-term
investments 1,486,410 8,948,583
------------ ------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (2,663,949) 199,375
FINANCING ACTIVITIES
Proceeds from sale of common stock 16,155 -
Dividends paid (1,274,366) (1,282,889)
Retirement of long-term debt (524,243) (637,193)
------------ ------------
NET CASH USED IN FINANCING ACTIVITIES (1,782,454) (1,920,082)
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (9,058,214) (3,825,878)
Cash and cash equivalents at beginning
of period 10,167,074 17,055,288
------------ ------------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 1,108,860 $ 13,229,410
============= ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
PAGE 7
TCBY ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FEBRUARY 28, 1994
NOTE A -- FINANCIAL STATEMENT PRESENTATION
The notes to the consolidated financial statements do not
include all notes which would be included in the annual report
to stockholders and reference to the footnotes contained in the
annual report to stockholders for the year ended November 30,
1993, will give additional information on such items as
significant accounting policies, long-term debt, income taxes,
lease commitments, contingencies and employee benefit plans.
However, in the opinion of management, all footnotes have been
included for disclosures required for compliance with the
Securities and Exchange Commission rules, as contained in
Accounting Series Release No. 177. Also in the opinion of
management, all adjustments (consisting of normal recurring
accruals) which are necessary for a fair statement of the
results for the interim periods have been included.
NOTE B -- RECLASSIFICATION
Certain amounts in the 1993 consolidated financial statements
have been reclassified to conform to the 1994 presentation.
NOTE C -- INVENTORY
<TABLE>
<CAPTION>
February 28, November 30,
1994 1993
------------ ------------
<S> <C> <C>
Manufacturing materials and
supplies $ 4,925,917 $ 3,775,732
Finished yogurt products and
other food products 3,978,214 3,281,552
Equipment and other products 4,484,708 4,419,553
------------ ------------
$13,388,839 $11,476,837
=========== ===========
</TABLE>
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<PAGE>
PAGE 8
NOTE D -- ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
February 28, November 30,
1994 1993
------------ ------------
<S> <C> <C>
Rent $ 972,862 $ 1,031,718
Compensation 1,487,468 1,714,336
Other 2,683,746 2,530,623
------------ ------------
$ 5,144,076 $ 5,276,677
=========== ===========
</TABLE>
NOTE E -- CONTINGENCIES
A purported investor in a former franchisee has claimed
approximately $26 million in damages from the former franchisee
for alleged fraudulent acts; in subsequent discussion with the
plaintiff's counsel, the damages requested have been refined to
$8.7 million. The Company has also been named in this suit as a
defendant and has cross-claimed the former franchisee. The
Company believes the plaintiff's claims to be without merit, and
the Company is vigorously contesting the suit. Other than as
set forth above, there is no material litigation pending against
the Company. Various legal and administrative proceedings are
pending against the Company which are incidental to the business
of the Company. The ultimate legal and financial liability of
the Company in connection with such proceedings and that
discussed above cannot be estimated with certainty, but the
Company believes, based upon its examination of these matters,
its experience to date, and discussions with counsel, that these
proceedings will have no material adverse effect upon the
Company's financial condition, either individually or in the
aggregate; of course, any substantial loss pursuant to any
litigation might have a material adverse impact upon results of
operations in the fiscal quarter or year in which it were to be
incurred, but the Company cannot estimate the range of any
reasonable possible loss.
Sequential Page No. 8
<PAGE> PAGE 9
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Total sales for the first quarter of fiscal 1994 increased 7.6
percent from sales for the first quarter of fiscal 1993.
The following table sets forth sales by category within the
Company's primary segments of operation:
<TABLE>
<CAPTION>
Three Months Ended February 28
% of % of
1994 Sales 1993 Sales
---- ----- ---- -----
<S> <C> <C> <C> <C>
Food Products:
Yogurt sales to Martin-
Brower and other food
service distributors $ 8,459 37% $ 9,407 45%
Retail sales by Company-
owned stores 4,087 18% 5,367 26%
Yogurt sales to the retail
grocery trade 6,448 29% 1,774 8%
-------- ---- -------- ----
18,994 84% 16,548 79%
Equipment:
Sales by the Company's
equipment distributor 2,939 13% 1,823 9%
Sales of manufactured
specialty vehicles 444 2% 2,306 11%
-------- ---- -------- ----
3,383 15% 4,129 20%
Other 210 1% 310 1%
-------- ---- -------- ----
Total Sales $ 22,587 100% $ 20,987 100%
======== ==== ======== ====
</TABLE>
($ rounded to nearest thousand)
Sales from the Company's food products segment include (i)
wholesale sales of frozen yogurt products to the Martin-Brower
Company, which distributes yogurt and other products to "TCBY"
stores, and to other food service distributors, which distribute
to non-traditional locations such as airports, on-premises
business cafeterias, hospitals, sporting arenas, toll road
plazas, etc., (ii) retail sales of yogurt and related food items
by Company-owned stores, and (iii) sales of "hardpack" frozen
yogurt and refrigerated "traditional style" yogurt for
distribution to retail groceries. First quarter sales in the
food products segment increased from $16.5 million in fiscal
1993 to $19.0 million in fiscal 1994. The food products segment
represented 84 percent of the Company's total sales in the first
quarter of fiscal 1994 as compared to 79 percent in fiscal 1993.
Within the food products segment, wholesale sales of frozen
yogurt declined 10 percent during the
Sequential Page No. 9
<PAGE>
PAGE 10
first quarter of fiscal 1994 from the same quarter in fiscal
1993. This is attributed to a reduction in the number of
traditional "TCBY" stores open during the first quarter of
fiscal 1994 along with a reduction in the average amount of
yogurt purchased by those stores. This reduction was partially
offset by a greater number of non-traditional locations open
during the first quarter of fiscal 1994 compared to the same
period in fiscal 1993. The Company expects a continuation of
growth in non-traditional locations during the remainder of
fiscal 1994, while the combined number of franchised and
Company-owned stores stabilizes.
The table below sets forth location activity for the first
quarter of fiscal 1994 and 1993.
<TABLE>
<CAPTION>
FRANCHISEE COMPANY NON-TRADITIONAL
STORES STORES LOCATIONS TOTAL
1994 1993 1994 1993 1994 1993 1994 1993
-----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the first three months:
Locations open at
beginning of period 1,364 1,401 121 147 989 292 2,474 1,840
Opened/Added 11 15 0 1 83 132 94 148
Closed (31) (44) (1) 0 (38) (3) (70) (47)
Net locations purchased
(sold) between fran-
chisees and Company 1 0 (1) 0 0 0 0 0
----------------------------------------------------
Locations open at
February 28 1,345 1,37 119 148 1,034 421 2,498 1,941
====================================================
</TABLE>
Included in locations open are 175 and 161 "TCBY" stores closed
for relocation or for the season at February 28, 1994 and
February 28, 1993, respectively.
Sales by Company-owned stores declined 24 percent during the
first quarter of fiscal 1994 as compared to the same period in
fiscal 1993. This decline results primarily from a reduction of
Company-owned stores operated during the period. The Company
expects the number of Company-owned stores to stabilize during
fiscal 1994. However, the Company will continue to evaluate
opportunities to refranchise stores.
Sales of yogurt to the retail grocery trade increased 363
percent during the first quarter of fiscal 1994 as compared to
the first quarter of fiscal 1993. This increase is a result of
expanded geographic distribution of both hardpack and
traditional style yogurt products. The Company plans to
continue to expand the distribution of yogurt products in the
retail grocery trade during the remainder of fiscal 1994.
Sales from the Company's equipment segment include (i) sales
from the distribution of equipment to the food service industry
Sequential Page No. 10
<PAGE>
PAGE 11
and (ii) sales of manufactured mobile kitchens and other
specialty vehicles primarily to businesses and governments.
Sales in the equipment segment decreased 18 percent during the
first quarter of fiscal 1994 from $4.1 million during the first
quarter of fiscal 1993 to $3.4 million during the first quarter
of fiscal 1994. Sales by the equipment segment represented 15
percent of the Company's total sales during the first quarter of
fiscal 1994 as compared to 20 percent during the first quarter
of fiscal 1993. This decrease in sales results primarily from
the completion in the second quarter 1993 of an $11 million
contract with a foreign government that was accounted for on a
percentage of completion basis. The Company's equipment
manufacturing subsidiary has not entered into any additional
contracts of this magnitude. The decrease was partially offset
by a 61 percent increase in sales for the Company's equipment
distribution subsidiary primarily due to the acquisition of
AIMCO Equipment Company in April 1993.
Same store sales (the comparison of fiscal 1994 individual
traditional "TCBY" store sales with sales by the same stores
operating during the same period of fiscal 1993) decreased 2.4
percent in the first quarter of fiscal 1994. Same store sales
for Company-owned stores decreased 4.6 percent and franchised
stores decreased 2.4 percent in the first quarter of fiscal
1994. The decline in same store sales, that began in 1990, has
had an adverse impact on the financial condition of franchised
and Company-owned stores, and contributed to store closings in
the past three years. The restaurant industry continues to be
highly competitive. The Company is continuing its efforts to
reverse the decline in same store sales through menu extensions,
national and local media advertising, store decor upgrades and
relocations. Even with the successful implementation of these
programs, store closings may occur.
The ratio of cost of sales to sales was 59 percent for the first
quarter of fiscal 1994 as compared to 55 percent for the first
quarter of fiscal 1993. The increase in the cost of sales to
sales ratio is attributed primarily to a change in sales mix and
increased milk prices. The sales mix within the food products
segment changed with retail sales through Company-owned stores
declining while wholesale sales to the retail grocery trade and
private label customers, which are made at a higher cost of
sales to sales ratio, increased. The ratio of cost of sales to
sales for the food products segment and equipment segment in the
first quarter of fiscal 1994 was 56.7 percent and 76 percent,
respectively, compared to 48.9 percent and 80.5 percent,
respectively, in the first quarter of fiscal 1993. A major
component of the Company's cost of sales of food products is
milk. Milk prices in the first quarter of fiscal 1994
increased 13% from prices in the first quarter of fiscal 1993.
Milk prices are expected to remain above last year levels due to
increased demand for dairy products.
Franchising revenues consist of initial franchise and license
fees and royalty income. In the first quarter of fiscal 1994,
initial franchise and license fees decreased 52 percent and
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<PAGE>
PAGE 12
royalty income decreased 2 percent from fiscal 1993. The
decrease in franchise and license fees results primarily from a
reduction in the amount of international license fees
recognized. The decline in royalty income results from a
decline in the sales of yogurt to "TCBY" stores noted above.
Selling, general and administrative (SG&A) expenses decreased 4
percent in the first quarter of fiscal 1994 compared to the
first quarter of fiscal 1993. This decrease is due primarily to
a reduction in the number of Company-owned stores operating
during the first quarter of fiscal 1994 (see location activity
schedule above) which results in a decrease in the amount of
total operating expenses within Company-owned stores. The
decrease referred to above was partially offset by (i) an
increase in expenses incurred by the Company in an effort to
expand the geographic distribution of the Company's yogurt
products within the retail grocery trade and the continued
development of non-traditional locations, and (ii) an increase
in expenses related to the operation of AIMCO. As a percentage
of combined sales and franchising revenues, SG&A expenses were
50 percent and 55 percent for the first quarter of fiscal 1994
and 1993, respectively. The Company plans to continue the
development of sales opportunities in non-traditional locations
and to the retail grocery trade. This will result in increased
sales personnel and selling costs.
Interest expense decreased approximately $72,000 in the first
quarter of fiscal 1994 compared to the first quarter of fiscal
1993. This decrease is due to a reduction in the principal
balances of outstanding long-term debt and a reduction in the
average interest rate paid.
Interest income decreased approximately $60,000 for the first
quarter of fiscal 1994 compared to the same period of fiscal
1993. The decrease is due to reductions in the outstanding
balances and yields on interest earning assets.
Litigation settlement and costs decreased $160,000 in the first
quarter of fiscal 1994 compared to the first quarter of fiscal
1993. The prior year balance relates to the final expenses
incurred by the Company relating to the defense and settlement
of various lawsuits brought against the Company by certain
shareholders during fiscal year 1992.
Income taxes as a percentage of income (loss) before income
taxes was 34.8 percent in the first quarter of fiscal 1993.
This compares to an effective rate of 34.3 percent recorded for
the fiscal year ended November 30, 1993.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically generated cash from operations
sufficient to meet its normal operating requirements. However,
the Company normally experiences a decrease in cash and cash
equivalents in the first quarter as a result of the seasonality
of the Company's business. The Company's cash and short-term
Sequential Page No. 12
<PAGE>
PAGE 13
investments decreased approximately $8.9 million in the first
quarter of fiscal 1994. This decrease resulted primarily from
(i) the net loss for the first quarter of fiscal 1994, (ii) an
increase in trade accounts receivable, other assets, and
inventories primarily attributed to the normal increase in these
accounts in the first quarter along with expansion into the
Private Label and Retail Grocery Trade markets, (iii) purchases
of property, plant and equipment including the purchase of the
building previously being leased by AIMCO, and (iv) a cash
dividend of five cents per share or $1.3 million paid in January
1994.
On February 28, 1994, working capital was $39.7 million compared
to $44.1 million on November 30, 1993. The current ratio was
5.11 to 1.0 on February 28, 1994 and 5.99 to 1.0 on November 30,
1993. The long-term debt to equity ratio was .11 to 1.0 at
February 28, 1994 and November 30, 1993. The Company has a
tangible net worth of $95.9 million at February 28, 1994.
On March 18, 1994, the Company's Board of Directors declared a
five cents per share dividend payable on April 15, 1994 to the
stockholders of record on April 1, 1994. The Company will
consider adjustments to the dividend rate after giving
consideration to return to stockholders, profitability
expectations and financing needs.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There were no changes from previously reported litigation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
28(a) - Press release, dated March 15, 1994, "TCBY Launches
Operations in Middle East"
28(b) - Press release, dated March 21, 1994, "TCBY Reports
Improved Sales and Revenues and Operating Results for the First
Quarter"
b) The Company did not file any reports on Form 8-K during the
three months ended February 28, 1994.
Sequential Page No. 13
<PAGE>
PAGE 14
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 of the undersigned thereunto duly authorized.
TCBY ENTERPRISES, INC.
Date: 04/09/94 /s/ Frank D. Hickingbotham
Frank D. Hickingbotham,
Chairman of the Board and
Chief Executive Officer
Date: 04/09/94 /s/ Gale Law
Gale Law,
Senior Vice President,
Chief Financial Officer
Sequential Page No. 14
<PAGE>
EXHIBIT 28(a)
PRESS RELEASE
FOR IMMEDIATE RELEASE
TUESDAY, MARCH 15, 1994
CONTACT PERSON: STACY DUCKETT, DIRECTOR
CORPORATE COMMUNICATIONS
(501) 688-8229
TCBY LAUNCHES OPERATIONS IN MIDDLE EAST
LITTLE ROCK, AR - MARCH 15, 1994 - TCBY's aggressive plans for
expansion into the Middle East have been launched with the
opening of three new franchised stores in Cairo, Bahrain, and
Qatar, according to Hartsell Wingfield, president of TCBY
International.
An additional 52 retail outlets are planned to open by 1998 in
Bahrain, Egypt, Kuwait, Qatar, Saudi Arabia, and the United Arab
Emirates (U.A.E.) through five major franchisees with TCBY
Systems, Inc. The company is also investigating possible
opportunities in Turkey and Israel.
Wingfield, who expects to have 20 franchised stores operating in
the Middle East by the end of 1994, reports that "initial sales
of frozen yogurt in the region have exceeded all expectations."
Calling the Middle East "a tremendous growth area for us," the
Little Rock, Arkansas-based executive says TCBY plans "to be a
major force in the frozen dessert market there. We have been
able to identify significant partners who can effectively
develop the region with the timely signing of franchisees in
each country."
The five master franchisees, who are forming a cooperative to
develop the region, include:
*The Onyx Co., which opened the Middle East's first TCBY store
in August, 1993 in Bahrain. The Company plans a second opening
in March, 1994.
*MES, which opened a Cairo, Egypt outlet last October, opens two
additional units in the spring of 1994 and 15 more over the next
four years. MES also will distribute TCBY products through
major retail grocery chains and kiosks in hotels in Egypt.
<PAGE>
*SHARACO (Saudi Resorts and Hotels Areas Co.), will launch 21
stores and multiple kiosks by 1998, beginning with three store
openings this spring in Riyadh and Jeddah, Saudi Arabia.
*Sterling Catering Services, which controls 50% of every retail
food dollar spent in Qatar, last October opened the first of
three TCBY locations in that country and will develop eight
units in the U.A.E. A Sterling spokesman called the TCBY
opening "the most successful of any franchise we own."
*MAPCO (Marketing Projects For Trade and Contracting), a major
retail distribution company based in Kuwait City, has agreed to
open three TCBY outlets in Kuwait and will distribute TCBY
retail products in that country.
With more than 2,500 franchised and company-owned locations in
22 countries and all 50 states, TCBY is the world's largest
franchisor, licensor and operator of frozen yogurt stores.
-30-
<PAGE>
EXHIBIT 28(b)
PRESS RELEASE
FOR IMMEDIATE RELEASE
MONDAY
MARCH 21, 1994
CONTACT PERSON: STACY DUCKETT, DIRECTOR
CORPORATE COMMUNICATIONS
(501) 688-8229
TCBY REPORTS IMPROVED SALES AND REVENUES AND
OPERATING RESULTS FOR THE FIRST QUARTER
LITTLE ROCK, AR - March 21, 1994 - TCBY Enterprises, Inc.,
(NYSE:TBY) announced sales and franchising revenues for the
first quarter ended February 28, 1994, improved 6.4 percent
compared to the same period last year. Earnings improved for
the sixth consecutive quarter over comparable quarters of the
previous years. Sales and franchising revenues for the first
quarter of 1994 were $24,258,583 compared to $22,804,293 in the
first quarter of 1993. Operations resulted in a net loss of
$621,367 or $.02 per share in the first quarter of fiscal 1994,
which was an improvement compared to a net loss of $788,560 or
$.03 per share in the first quarter of fiscal 1993.
Same store sales for Company-owned and franchised stores
combined decreased 2 percent in the first quarter of fiscal 1994
from the first quarter of 1993. Same store sales for franchised
stores decreased 2 percent, while same store sales for
Company-owned stores decreased 5 percent in the first quarter.
Same store sales comparisons do not include sales from over
1,000 non-traditional locations.
At February 28, 1994, there were 2,498 stores and
non-traditional locations open, compared to 1,941 at the end of
first quarter 1993. This represents a net increase of 557
locations.
TCBY continued its growth in the area of retail sales. As of
February 28, 1994 TCBY traditional style yogurt and TCBY
hardpack frozen yogurt products were available in over 30 major
national markets. The Company's expansion into the retail
market continues to bolster the strong awareness of the TCBY
brand in consumer markets.
The Company introduced its 1994 marketing programs at its
International Franchise Conference held in Nashville, Tennessee
the week of March 14. The Company announced that its 1994
marketing plans will be built around a return to national
television.
"These improved results reflect continuing attention to expense
reduction, new marketing strategies, additional product
introductions and continued expansion into non-traditional
loca
<PAGE>
tions," said Frank D. Hickingbotham, Chairman of the Board and
Chief Executive Officer.
The Board of Directors of the Company today declared a $.05 per
share cash dividend. This dividend is payable on April 15, 1994
to stockholders of record as of April 1, 1994.
The Company manufactures and sells soft serve frozen yogurt,
hardpack frozen yogurt, novelty products, and foodservice
equipment. TCBY is the largest franchisor, licensor and
operator of frozen yogurt stores in the world.
TCBY Enterprises, Inc.
Selected Financial Highlights
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
February 28
1994 1993
<S> <C> <C>
Operating Results
Sales & Franchising Revenues $ 24,259 $ 22,804
Net Income (Loss) $ ( 621) $ ( 789)
Net Income (Loss) Per Share $ (.02) $ (.03)
Average Shares Outstanding 25,489 25,633
Dividends Paid Per Share $ .05 $ .05
February 28 November 30
1994 1993
Financial Position
Current Assets $ 49,343 $ 53,817
Current Liabilities $ 9,659 $ 8,834
Property, Plant & Equipment, Net $ 54,591 $ 53,915
Total Assets $127,109 $128,691
Long-term Debt $ 10,959 $ 11,487
Stockholders' Equity $103,352 $105,231
-30-
</TABLE>
