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 March 2, 1997
________________________________
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 of 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, 1997 there were 24,275,876 shares of the
registrant's common stock outstanding.
Sequential Page No. 1
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PART I. FINANCIAL INFORMATION Page
____
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets
March 2, 1997 and November 30, 1996 3
Consolidated Statements of Operations
Quarter Ended March 2, 1997 and
February 29, 1996 5
Consolidated Statements of Cash Flows
Quarter Ended March 2, 1997 and
February 29, 1996 6
Notes to Consolidated Financial Statements
March 2, 1997 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
Sequential Page No. 2
PART 1
FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
March 2, November 30,
1997 1996
__________________________________
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 10,204,335 $ 14,919,008
Short-term investments 4,165,250 4,252,552
Receivables:
Trade accounts 11,172,544 8,620,498
Notes 2,411,572 2,429,967
Allowance for doubtful accounts
and impaired notes (1,209,645) (1,187,628)
_____________ _____________
12,374,471 9,862,837
Refundable income taxes 210,927 332,873
Deferred income taxes 1,451,190 1,451,190
Inventories 13,431,313 11,321,751
Prepaid expenses and other assets 1,935,408 1,742,801
Assets held for sale 781,680 822,583
_____________ _____________
TOTAL CURRENT ASSETS 44,554,574 44,705,595
PROPERTY, PLANT, AND EQUIPMENT:
Land 2,866,820 2,866,820
Buildings 23,644,654 23,581,923
Furniture, vehicles, and equipment 49,216,017 49,073,757
Leasehold improvements 3,511,636 3,511,509
Construction in progress 42,661 -
Allowances for depreciation (36,799,258) (35,694,982)
_____________ _____________
42,482,530 43,339,027
OTHER ASSETS:
Notes receivable, less current portion
(less allowance for doubtful and
impaired notes of $8,432,342 in 1997
and $8,494,396 in 1996) 5,991,212 6,131,070
Intangibles (less amortization of
$1,786,753 in 1997 and $1,731,199 in 1996) 4,447,188 4,485,689
Other 3,334,914 3,807,066
_____________ _____________
13,773,314 14,423,825
_____________ _____________
TOTAL ASSETS $100,810,418 $102,468,447
============= =============
</TABLE>
See notes to consolidated financial statements.
Sequential Page No. 3
TCBY ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
March 2, November 30,
1997 1996
_____________ _____________
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 3,619,436 $ 1,906,568
Accrued expenses 5,187,789 5,699,381
Current portion of long-term debt 3,171,448 3,171,448
_____________ _____________
TOTAL CURRENT LIABILITIES 11,978,673 10,777,397
LONG-TERM DEBT, less current portion 8,676,594 9,469,456
DEFERRED INCOME TAXES 3,001,101 3,001,101
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 -
1997 - 27,063,345; 1996 - 27,062,345 2,706,335 2,706,235
Additional paid-in capital 25,551,084 25,547,184
Retained earnings 64,190,862 65,165,190
_____________ _____________
92,448,281 93,418,609
Less treasury stock, at cost (2,679,469
shares in 1997 and 2,424,769 in 1996) (15,294,231) (14,198,116)
_____________ _____________
TOTAL STOCKHOLDERS' EQUITY 77,154,050 79,220,493
_____________ _____________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $100,810,418 $102,468,447
============= =============
</TABLE>
See notes to consolidated financial statements.
Sequential Page No. 4
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
March 2, February 29,
1997 1996
_________________________________
<S> <C> <C>
Sales $ 15,884,887 $ 15,052,899
Cost of sales 10,682,965 9,451,986
_____________ _____________
GROSS PROFIT 5,201,922 5,600,913
Franchising revenues:
Initial franchise and license fees 761,375 532,750
Royalty income 1,825,437 1,692,004
_____________ _____________
2,586,812 2,224,754
_____________ _____________
7,788,734 7,825,667
Selling, general, and administrative
expenses 7,527,396 8,659,113
_____________ _____________
INCOME (LOSS) FROM OPERATIONS 261,338 (833,446)
Other income (expense):
Interest expense (202,970) (262,754)
Interest income 303,085 275,778
Other income 25,701 43,996
_____________ _____________
125,816 57,020
_____________ _____________
INCOME (LOSS) BEFORE INCOME TAXES 387,154 (776,426)
Income tax expense (benefit) 135,503 (271,749)
_____________ _____________
NET INCOME (LOSS) $ 251,651 $ (504,677)
============= =============
Net Income (Loss) Per Share $ 0.01 $ (0.02)
============= =============
Average Shares Outstanding 24,471,597 25,563,836
============= =============
Cash Dividends Paid Per Share $ 0.05 $ 0.05
============= =============
</TABLE>
See notes to consolidated financial statements.
Sequential Page No. 5
TCBY ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
March 2, February 29,
1997 1996
________________________________
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 251,651 $ (504,677)
Adjustments to reconcile net income
(loss) to net cash (used in) provided
by operating activities:
Depreciation 1,314,020 1,295,965
Amortization of intangibles 54,254 47,705
Provision for doubtful accounts and
impaired notes 17,699 22,055
Gain on disposal of property and equipment - (2,864)
Changes in operating assets and liabilities:
Receivables (2,613,635) 29,444
Inventories (2,094,661) 476,295
Prepaid expenses (192,607) (168,154)
Assets held for disposal - 777,619
Intangibles and other assets 386,539 480,785
Accounts payable and accrued expenses 1,201,276 (1,319,161)
Income taxes 121,946 (279,054)
_____________ _____________
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (1,553,518) 855,958
INVESTING ACTIVITIES
Purchases of property, plant, and equipment (361,661) (597,575)
Proceeds from sales of property and equipment - 37,600
Origination of notes receivable (53,921) (48,364)
Principal collected on notes receivable 278,081 289,051
Purchases of short-term investments (720,000) (5,012,019)
Proceeds from maturity of short-term
investments 807,302 2,560,930
_____________ _____________
NET CASH USED IN
INVESTING ACTIVITIES (50,199) (2,770,377)
FINANCING ACTIVITIES
Proceeds from sale of Common Stock 4,000 -
Dividends paid (1,225,979) (1,281,719)
Purchases of treasury stock (1,096,115) (1,340,384)
Principal payments of long-term debt (792,862) (528,574)
NET CASH USED IN FINANCING ACTIVITIES (3,110,956) (3,150,677)
DECREASE IN CASH AND CASH EQUIVALENTS (4,714,673) (5,065,096)
Cash and cash equivalents at beginning
of period 14,919,008 5,565,654
_____________ _____________
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 10,204,335 $ 500,558
============= =============<PAGE>
</TABLE>
See notes to consolidated financial statements.
Sequential Page No. 6
TCBY ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 2, 1997
NOTE A -- FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited consolidated financial statements
have been prepared in accordance with generally accepted
accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the
quarter ended March 2, 1997 are not necessarily indicative
of the results that may be expected for the year ended
November 30, 1997. For further information, refer to the
consolidated financial statements and footnotes thereto
included in the Company's annual report on Form 10-K for the
year ended November 30, 1996.
In the first quarter of 1997, the Company changed to a
fiscal year consisting of 52 or 53 weeks, ending on the
Sunday nearest November 30.
NOTE B -- RECLASSIFICATIONS AND RESTATEMENT
Certain amounts in the 1996 consolidated financial
statements have been reclassified to conform to the 1997
presentation.
NOTE C -- INVENTORIES
<TABLE>
<CAPTION>
March 2, November 30,
1997 1996
___________ ___________
<S> <C> <C>
Manufacturing materials and
supplies $ 4,857,699 $ 3,794,175
Finished yogurt products and
other food products 4,178,067 2,947,515
Equipment and other products 4,395,547 4,580,061
___________ ___________
$13,431,313 $11,321,751
=========== ===========
</TABLE>
The increase in manufacturing materials and supplies is due
to seasonality and expanded private label sales of hardpack
and novelty products as described in Item 2.
Sequential Page No. 7
NOTE D -- ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
March 2, November 30,
1997 1996
___________ ____________
<S> <C> <C>
Rent $ 771,556 $ 960,371
Compensation 2,738,621 2,219,160
Other 1,677,612 2,519,850
___________ ____________
$ 5,187,789 $ 5,699,381
=========== ===========
</TABLE>
NOTE E -- CONTINGENCIES
A purported investor in a former franchisee claimed
approximately $26 million in trebled damages plus costs and
prejudgment interest from the former franchisee for alleged
fraudulent acts. The compensatory damages requested were
$8.7 million. The Company was also named in this suit as a
defendant. In April, 1997, summary judgment was granted by
the trial court in favor of the Company on the basis that as
a matter of law the Company could not be liable to the
purported investor; the Company anticipates an appeal by the
purported investor, but none has been filed as of the date
of this quarterly report on Form 10-Q.
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 its discussions with legal counsel,
that resolution of 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
quarter or year in which it were to be incurred, but the
Company cannot estimate the range of any reasonably possible
loss.
Sequential Page No. 8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's total sales for the first quarter of 1997
increased six percent from sales in the first quarter of
1996. As described below, this increase in sales is related
to increased sales of "TCBY"(Registered) frozen products and
specialty products as well as increased sales by the
Company's equipment distributor. These increases in sales
were partially offset by decreased sales for Company-owned
stores due to the franchising of most Company-owned
"TCBY"(Registered) stores during 1996. The Company's total
sales excluding "TCBY"(Registered) Company-owned units
increased 15 percent in 1997 compared to 1996. The
following table sets forth sales by category within the
Company's primary segments (food products and equipment) of
operation:
<TABLE>
<CAPTION>
(dollars in thousands)
1st Quarter 1st Quarter
1997 1996
_____________________ ____________________
Sales % Sales %
________ _____ ________ _____
<S> <C> <C> <C> <C>
Food Products:
______________
"TCBY"(Registered) frozen
product sales for distribution
to "TCBY"(Registered)
locations $ 8,631 54% $ 8,246 55%
Sales of specialty products 3,024 19% 2,177 14%
Retail sales by Company-
owned stores 165 1% 1,326 9%
________ _____ ________ _____
11,820 74% 11,749 78%
Equipment:
__________
Sales by the Company's
equipment distributor 3,000 19% 2,265 15%
Sales of manufactured
specialty vehicles 794 5% 784 5%
________ _____ ________ _____
3,794 24% 3,049 20%
Other 271 2% 255 2%
________ _____ ________ _____
Total Sales $ 15,885 100% $ 15,053 100%
======== ==== ======== ====<PAGE>
</TABLE>
Sales from the Company's food products segment include (i)
wholesale sales of frozen yogurt and ice cream products to
ProSource Distribution Services and to other foodservice
distributors, which distribute products to
"TCBY"(Registered) stores and non-traditional locations, and
sales to international master franchisees of frozen yogurt
and ice cream products and proprietary ingredients for the
manufacture of frozen yogurt products in the countries that
produce locally, (ii) sales of "TCBY"(Registered) frozen
packaged products and other dairy food products to customers
including supermarkets, convenience stores, dairies, food
service distributors, club stores, and private label
suppliers, and (iii) retail sales of yogurt, juices, and
related food items by Company-owned stores.
Sequential Page No. 9
Wholesale sales of frozen yogurt increased five percent
during the first quarter of 1997 as compared to the first
quarter of 1996. This increase is attributed primarily to
increased purchases by "TCBY"(Registered) non-traditional
locations.
The following table sets forth location activity for the
first quarter of 1997 and 1996 for "TCBY"(Registered) and
Juice Works(Registered) locations:
<TABLE>
<CAPTION>
NON-
FRANCHISED COMPANY INTERNATIONAL TRADITIONAL
STORES STORES LOCATIONS LOCATIONS L
1997 1996 1997 1996 1997 1996 1997 1996 19
_________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <
For the first quarter:
Locations open at
beginning of period 1,198 1,218 2 42 201 187 1,297 1,273 2
Opened 13 2 - - 11 16 70 47
Closed (18) (18) - (1) (2) (11) (47) (62)
Locations transferred - 6 - (15) - - - 9
_________________________________________________________
Locations open at
end of period 1,193 1,208 2 26 210 192 1,320 1,267 2
=========================================================
</TABLE>
Included in the franchised store information are 157 and 146
"TCBY"(Registered) stores closed for relocation or for the
season on March 2, 1997 and February 29, 1996, respectively.
The non-traditional locations include sites at airports,
travel plazas, convenience stores, colleges, hospitals,
theme parks, and stadiums. The Company continues to focus
on the development of locations in conjunction with
petroleum stores and other food concepts (co-branded
locations). The majority of the 70 non-traditional openings
in the first quarter of 1997 were co-branded. The Company's
current experience is that the volume of yogurt of these
locations will exceed that of some other types of
non-traditional locations with the exception of airports.
During the first quarter of 1997, 47 non-traditional
locations were closed. These locations generally purchased
low volumes of yogurt from the Company. The Company expects
that there may be additional closings of low volume
non-traditional locations as they are not efficient for the
Company to service or the customer to operate. These
closings are not expected to have a material impact on
yogurt sales, but will allow the Company's support services
to be more effective and efficient.
Sequential Page No. 10
Sales of specialty products increased 39 percent during the
first quarter of 1997 as compared to the first quarter of
1996. This increase is attributed primarily to increased
sales of private label products. The Company has pursued
private label opportunities to utilize the available
capacity at its manufacturing facility in Dallas. This
increase was partially offset by a decrease in the sale of
"TCBY"(Registered) hardpack products for the same periods.
The Company continues to focus on geographic regions where
the hardpack products can be delivered and marketed in an
efficient manner.
Retail sales by Company-owned stores declined 88 percent
during the first quarter of 1997 compared to the first
quarter of 1996. This decline resulted primarily from the
Company's decision, during the fourth quarter of 1995, to
franchise or close most of the "TCBY"(Registered)
Company-owned stores. The Company took this action as it
believes the stores will operate more effectively with local
ownership. The divestiture of the stores will lower sales
in the food products segment in 1997 as the Company operated
units for a portion of 1996. At March 2, 1997, and February
29, 1996, the Company operated two stores (one
"TCBY"(Registered) and one Juice Works(Registered)) and 26
"TCBY"(Registered) stores, respectively.
Sales in the Company's equipment segment include (i) sales
from the distribution of equipment to the foodservice
industry and (ii) sales of manufactured mobile kitchens and
other specialty vehicles primarily to businesses and
governments. Sales in the equipment segment increased 24
percent during the first quarter of 1997 over the same
period in the prior year. The change in sales is
attributable to increased sales at the Company's equipment
distributor due to international equipment orders and the
opening of non-traditional "TCBY"(Registered) locations,
some of which purchased a portion of their original
equipment packages from the Company.
As a percent of sales, cost of sales for the first quarter
of 1997 and 1996 for the Company and its two primary
segments are presented below:
<TABLE>
<CAPTION>
1997 1996
______________________________________________________
<S> <C> <C>
Food Products Segment 65% 60%
Equipment Segment 79% 80%
Company Total 67% 63%
</TABLE>
The increase in the food products segment cost of sales
percentage is due to a number of factors including the
Company's decision to franchise or close most of its
"TCBY"(Registered) Company-owned stores. These stores had a
lower cost of sales percentage than the other categories of
the food products segment noted above. Therefore, as such
stores were sold or closed, cost of sales as a percent of
sales increased in the food products segment. In addition,
sales of specialty
Sequential Page No. 11
products, which generally have a higher cost of sales
percentage than the other food segment categories, were a
larger component of the food products segment sales in the
first quarter of 1997 compared to the prior year primarily
because of increased sales to private label customers. The
increase in the cost of sales percentage for the food
segment was partially offset by a decrease in dairy prices.
Dairy prices, which represent a major component of the
Company's cost of sales, were lower in the first quarter of
1997 compared to the first quarter of 1996. The Company's
dairy costs are expected to be comparable in the second
quarter of 1997 to the costs in the same period of 1996.
Franchising revenues consist of initial franchise and
license fees and royalty income. In the first quarter of
1997, initial franchise and license fees increased 43
percent while royalty income increased eight percent from
the same period in 1996. This increase in franchise and
license fees results primarily from increased initial
international franchise fees. The increase in royalty
income relates to the growth in the number of franchises
operated by petroleum companies and their dealers or
distributors and international development.
Operating expenses decreased 13 percent in the first quarter
of 1997 compared to the same period in 1996. The decrease
is due to a reduction in operating expenses related to
corporate stores due to the franchising or closing of these
units as discussed above. As a percentage of combined sales
and franchising revenues, operating expenses were 41 percent
and 50 percent for the first quarter of 1997 and 1996,
respectively.
The key objective of the Company continues to be the
enhancement of shareholder value. As such, the Company's
executive management team will receive its full incentive
bonus only if the Company attains earnings per share of $.34
in 1997, which approximates a 30 percent increase over 1996.
The Company expects revenues from food products and
equipment sales to increase over 1996 due to continued
expansion of co-branded locations and other manufacturing
opportunities. Sales will be reduced somewhat by the
franchising of Company-owned units during 1996, as noted
above. Management will continue to evaluate operating costs
for efficiencies.
The Company and its representatives may from time to time
make written or oral forward-looking statements with respect
to their current views and estimates of future economic
circumstances, industry conditions, company performance, and
financial results. These forward-looking statements are
based on certain assumptions regarding the economy, unit
openings and closings, sales volumes per unit and other
manufacturing opportunities. Should the Company's
performance differ materially from the assumptions regarding
these areas, actual results could vary significantly from
the performance noted in the forward-looki ng statements.
Thus, the Company cautions readers not to place undue
reliance on any forward-looking statements, which speak only
as of the date made.
Sequential Page No. 12
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically generated cash from operations
sufficient to meet its normal operating requirements.
However, the Company generally experiences a decrease in
cash and cash equivalents in the first quarter as a result
of the seasonality of its business. The Company's cash and
short-term investments decreased approximately $4.8 million
during the first quarter of 1997. This decrease resulted
primarily from (i) purchases of treasury stock, (ii) an
increase in trade accounts receivable primarily attributed
to the normal increase in the first quarter along with
expansion in the private label market, (iii) an increase in
inventory due to raw goods and packaging materials related
to increased volume of hardpack and novelty products, and
(iv) a cash dividend of five cents per share or $1.3 million
paid in January 1997. The Company's foreseeable cash needs
for operations and capital expenditures are expected to be
met through cash flows from operations; however, the Company
has available a $5 million unsecured credit line to meet
seasonal cash needs.
In December 1995, the Company was authorized to repurchase
up to three million shares of its outstanding common stock.
Subsequently, repurchases have totaled 1,292,400 shares with
254,700 shares purchased in the first quarter of 1997. The
repurchases were funded with cash flows. Future repurchases
will be funded with cash flows from operations or long-term
financing.
On March 2, 1997, working capital was $32.6 million compared
to $33.9 million on November 30, 1996. The current ratio
was 3.7 to 1.0 on March 2, 1997 and 4.1 to 1.0 on November
30, 1996. The long-term debt to equity ratio was .11 to 1.0
at March 2, 1997 and .12 to 1.0 at November 30, 1996. The
Company has tangible net worth of $72.7 million at March 2,
1997.
On March 11, 1997, the Company's Board of Directors declared
a five cents per share dividend payable on April 10, 1997 to
the stockholders of record on March 27, 1997. The Company
will consider adjustments to the dividend rate after giving
consideration to return to stockholders, profitability
expectations and financing needs.
Sequential Page No. 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A purported investor in a former franchisee claimed approximately
$26 million in trebled damages plus costs and prejudgment interest
from the former franchisee for alleged fraudulent acts. The com-
pensatory damages requested were $8.7 million. The Company was
also named in this suit as a defendant. In April, 1997, summary
judgment was granted by the trial court in favor of the Company
on the basis that as a matter of law the Company could not be
liable to the purported investor; the Company anticipates an
appeal by the purported investor, but none has been filed as of
the date of this quarterly report on Form 10-Q.
<TABLE>
<CAPTION>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
<S> <C>
27 Article 5, Financial Data Schedule for the First
Quarter 1997 Form 10-Q
99(a) Press release, dated March 13, 1997, "TCBY
Reports Improved Operating Results for First
Quarter"
99(b) Press release, dated March 26, 1997, ""TCBY"
Treats(Service Mark) Stores and Subway Shops
Under One Roof to Satisfy Customers"
99(c) Press release, dated April 4, 1997, "TCBY and
Nathan's Announce Co-Branding Alliance"
</TABLE>
b) The Company did not file any Reports on Form 8-K
during the quarter ended March 2, 1997.
Sequential Page No. 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 by the undersigned thereunto duly
authorized.
TCBY ENTERPRISES, INC.
Date: 04/15/97 /s/ Frank D. Hickingbotham
__________________________
Frank D. Hickingbotham,
Chairman of the Board and
Chief Executive Officer
Date: 04/15/97 /s/ Gene Whisenhunt
__________________________
Gene Whisenhunt,
Executive Vice President
Chief Financial Officer
Sequential Page No. 15
EXHIBIT 27
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AS OF MARCH 2,
1997 AND THE CONSOLIDATED STATEMENT OF INCOME FOR THE
QUARTER ENDED MARCH 2, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> MAR-02-1997
<CASH> 10,204,335
<SECURITIES> 4,165,250
<RECEIVABLES> 13,584,116
<ALLOWANCES> 1,209,645
<INVENTORY> 13,431,313
<CURRENT-ASSETS> 44,554,574
<PP&E> 79,281,788
<DEPRECIATION> 36,799,258
<TOTAL-ASSETS> 100,810,418
<CURRENT-LIABILITIES> 11,978,673
<BONDS> 8,676,594
<COMMON> 2,706,335
0
0
<OTHER-SE> 74,447,715
<TOTAL-LIABILITY-AND-EQUITY> 100,810,418
<SALES> 15,884,887
<TOTAL-REVENUES> 18,471,699
<CGS> 10,682,965
<TOTAL-COSTS> 10,682,965
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 17,699
<INTEREST-EXPENSE> 202,970
<INCOME-PRETAX> 387,154
<INCOME-TAX> 135,503
<INCOME-CONTINUING> 251,651
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 251,651
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
Exhibit 99(a)
PRESS RELEASE
FOR IMMEDIATE RELEASE
THURSDAY
MARCH 13, 1997
CONTACT PERSON: STACY DUCKETT, VICE PRESIDENT
CORPORATION COMMUNICATIONS
(501) 688-8229
TCBY REPORTS IMPROVED OPERATING
RESULTS FOR FIRST QUARTER
LITTLE ROCK, AR - Thursday (March 13) - TCBY ENTERPRISES,
INC. (NYSE:TBY) today announced improved operating results
for the first quarter of 1997. Net income increased to
$251,651, or $.01 per share, from a net loss of $(504,677),
or $(.02) per share, in 1996. These results represent the
best first quarter performance experienced by the Company
since 1990.
Sales and franchising revenues were $18,471,699 as compared
to $17,277,653 for the same period last year. While this
represents a seven percent improvement in revenues, the
increase in sales and franchising revenues excluding
Company-owned units (which were franchised or closed during
1996) is 15 percent. The increase in sales and franchising
revenues is primarily attributable to improvements in sales
at Americana Foods and Riverport Equipment and Distribution
Company (Riverport) and increased international franchisee
fees. Americana Foods and Riverport benefited from the
Company's continued growth in co-branded locations.
As of March 2, 1997, there were 2,718 "TCBY"(Registered)
locations and 7 Juice Works(Registered) locations open, as
well as several thousand retail points-of-sale for
"TCBY"(Registered) products worldwide. In addition, there
were 314 "TCBY"(Registered) locations and 13 Juice
Works(Registered) locations under agreement for development.
Most of the "TCBY"(Registered) locations under development
will be co-branded location with other food or petroleum
operations. The first Juice Works(Registered) airport
locations will open in the San Diego and Chicago O'Hare
airports in the coming months.
The Company introduced its 1997 Marketing programs at its
International Franchise Conference held earlier this week.
The 1997 plans include national television, radio, and
newspaper advertising which will highlight new products and
product promotions. The conference also afforded TCBY
franchisees the opportunity to review co-branding
opportunities, preview new products, and attend break out
sessions addressing various areas of interest to assist in
their unit operations. The conference was attended by
franchisees from across the United States, including several
co-branding partners. In addition, over 30 countries were
represented by the international franchisees in attendance.
The Company's expansion worldwide continued during the first
quarter. Several new development agreements were signed
including those for Argentina, Finland, and Turkey.
Co-branding continues to extend to international markets as
locations were recently opened in conjunction with Hyatt
Regency in Aruba and Texaco in Jamaica.
"We are pleased with the first quarter results," said Frank
D. Hickingbotham, Chairman and Chief Executive Officer.
"The opportunities for continued growth and improvements are
numerous for our Company. We remain focused on improving
sales and overall profitability through expanded
distribution of our products worldwide."
A key objective of the Company continues to be the
enhancement of shareholder value. As such, the Company has
announced that its executive management team will only
receive their full incentive bonus if the Company attains
earnings per share of $.34 in 1997, which approximates a 30
percent increase over 1996. The Company expects revenues
from food products and equipment sales to increase over 1996
due to continued expansion of co-branded locations and other
manufacturing opportunities. Sales will be reduced somewhat
by the franchising of Company-owned units during 1996, as
noted above. Management will continue to evaluate operating
costs for efficiencies. These forward-looking statements
are based on certain assumptions regarding the economy, unit
openings and closings, sales volumes per unit and other
manufacturing opportunities. Should the Company's
performance differ materially from the assumptions regarding
these areas, actual results could vary significantly from
the performance noted in the forward looking statements.
The Board of Directors of the Company has declared a $.05
per share cash dividend. This dividend is payable April 10,
1997 to stockholders of record as of March 27, 1997.
In December, 1995, the Company announced the authorization
by its Board of Directors to purchase up to three million
shares of its outstanding common stock. To date, the
Company has purchased over 1.3 million shares under this
authorization. Purchases have been made utilizing the
Company's cash from operations.
TCBY Enterprises, Inc., through subsidiary companies,
manufactures and sells soft serve frozen yogurt, hardpack
frozen yogurt, hardpack ice cream, and frozen novelty
products, and markets foodservice equipment. The Company is
the world's largest manufacturer-franchisor of frozen
yogurt. The Company, through subsidiaries, develops
locations and products under the "TCBY"(Registered) and
Juice Works(Registered) brands.
TCBY Enterprises, Inc.
Selected Financial Highlights
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
March 2, February 29,
1997 1996
<S> <C> <C>
Operating Results
Sales & Franchising Revenues $18,472 $ 17,278
Net Income (Loss) $ 252 $ (505)
Net Income (Loss) Per Share $ .01 $ (.02)
Average Shares Outstanding 24,472 25,564
Dividends Paid Per Share $ .05 $ .05
</TABLE>
<TABLE>
<CAPTION>
March 2 November 30
1997 1996
<S> <C> <C>
Financial Position
Current Assets $ 44,555 $ 44,706
Current Liabilities $ 11,979 $ 10,777
Property, Plant & Equipment, Net $ 42,483 $ 43,339
Total Assets $100,810 $102,468
Long-term Debt, less current portion $ 8,677 $ 9,469
Stockholders' Equity $ 77,154 $ 79,220
</TABLE>
-30-
Exhibit 99(b)
PRESS RELEASE
FOR IMMEDIATE RELEASE
WEDNESDAY
MARCH 26, 1997
CONTACT PERSONS: STACY DUCKETT, VICE PRESIDENT
CORPORATE COMMUNICATIONS
TCBY ENTERPRISES, INC.
(501) 688-8229
JARED NIXON, ext. 1329
MICHELE KLOTZER, ext. 1302
SUBWAY
(203) 877-4281
"TCBY" TREATS(Service Mark) STORES AND SUBWAY SHOPS
UNDER ONE ROOF TO SATISFY CUSTOMERS
LITTLE ROCK, AR - Wednesday (March 26, 1997) - TCBY
ENTERPRISES, INC. (NYSE:TBY) today announced that its
subsidiary, TCBY Systems, Inc., has signed a landmark
agreement with Doctor's Associates Inc., the franchisor of
Subway(Registered) restaurants in the United States. The
alliance clears the way for co-branded locations for
Subway(Registered) and "TCBY" Treats(Service Mark) stores.
Within the next few months, customers will be able to visit
many locations that offer the full spectrum of
Subway(Registered) sandwiches and salads, and an array of
"TCBY"(Registered) frozen yogurt, sorbet, ice cream, cakes
and pies.
"This arrangement provides fantastic benefits, giving
Subway(Registered) owners the ability to leverage the power
of another brand. Because TCBY is a proven leader in the
frozen dessert category, the two product lines compliment
each other nicely," says John Skerritt, co-branding
development manager for Doctor's Associates Inc.
"Since both concepts are well known for their variety of
deliciously tempting choices and many lower fat menu
selections, it seems to be a natural fit for the two
franchise companies," says Skerritt. He adds, "With nearly
11,000 Subway(Registered) sandwich shops in the United
States alone, the development potential for these
dual-branded locations is enormous."
Under the terms of the agreement, approved Subway owners
wishing to add the "TCBY" Treats(Service Mark) concept to
their location would become TCBY franchisees as well. The
two concepts would share the same space, labor and
management to maximize operations efficiency. Of course,
each would maintain its separate identity in terms of
uniforms, decor, menu and color scheme. This alliance
represents dual-branding opportunities for new site
development and existing locations for both brands.
"We are very excited to be working with Subway(Registered),"
said Jim Sahene, President, TCBY Systems, Inc. "This
alliance will be beneficial to both brands and both
franchise systems. The development opportunities are
tremendous." Sahene added, "We welcome the Subway
franchisees to our system and look forward to developing
this alliance."
The Subway(Registered) restaurant system is the world's
second largest fast food franchise with more than 12,600
sandwich shops in 59 countries. World-wide sales for the
Subway(Registered) franchises were $3.2 billion (U.S.) in
1996.
TCBY Enterprises, Inc., through subsidiary companies,
manufactures and sells soft serve frozen yogurt, hardpack
frozen yogurt, hardpack ice cream, and frozen novelty
products, and markets foodservice equipment. The Company is
the world's largest manufacturer-franchisor of frozen
yogurt. The Company, through subsidiaries, develops
locations and products under the "TCBY"(Registered) and
Juice Works(Registered) brands.
-30-
Exhibit 99(c)
PRESS RELEASE
FOR IMMEDIATE RELEASE
FRIDAY
APRIL 4, 1997
CONTACT PERSON: STACY DUCKETT, VICE PRESIDENT
CORPORATE COMMUNICATIONS
TCBY ENTERPRISES, INC.
(501) 688-8229
CARL PALEY, SENIOR VICE PRESIDENT
OF DEVELOPMENT
NATHAN'S FAMOUS, INC.
(516) 338-8500 ext. 230
TCBY AND NATHAN'S
ANNOUNCE CO-BRANDING ALLIANCE
LITTLE ROCK, AR - Friday (April 4, 1997) - TCBY ENTERPRISES,
INC. (NYSE:TBY) and Nathan's Famous, Inc. today announced a
co-branding partnership that targets development in
traditional and non-traditional captive market venues. This
alliance allows for the inclusion of Nathan's signature all
beef hot dogs, toppings, and a variety of other menu items
in certain existing "TCBY" Treats(Service Mark) shops as
well as the addition of the "TCBY" Treats(Service Mark)
concept into select Nathan's Restaurants. The success
demonstrated by "TCBY"(Registered) and Nathan's units
operating together largely was the catalyst that prompted
this alliance.
"We are very excited about this project with Nathan's", said
Jim Sahene, President, TCBY Systems, Inc. "We are not
limiting our co-branding effort with Nathan's to existing
units, we expect to perpetuate this concept with new
locations as well. Nathan's affords us additional access to
some great opportunities."
"The combined use of the two brands will not only serve to
benefit the operator, it has distinct beneficial
implications to TCBY and Nathan's resulting from the success
of the development strategy," said Wayne Norbitz, President
and Chief Operating Officer of Nathan's Famous, Inc. "Both
brands enjoy excellent consumer acceptance and this liaison
affords enhanced marketing and distribution opportunities
domestically and abroad," continued Norbitz.
The Nathan's Famous system currently is comprised of 235
outlets including 25 company-owned units, located in twenty
states and the District of Columbia all featuring its world
famous, all beef hot dogs.
TCBY Enterprises, Inc., through subsidiary companies,
manufactures and sells soft serve frozen yogurt, hardpack
frozen yogurt, hardpack ice cream, and frozen novelty
products, and markets foodservice equipment. The Company is
the world's largest manufacturer-franchisor of frozen
yogurt. The Company, through subsidiaries, develops
locations and products under the "TCBY"(Registered) and
Juice Works(Registered) brands.
-30-
