SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 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 0-14837
ELMER'S RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0836824
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11802 S.E. Stark St.
P.O. Box 16595
Portland, Oregon 97216
(Address of principal executive offices) (Zip Code)
(503) 252-1485
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Number of shares of Common Stock outstanding at August 4, 1996:
1,499,263.
<PAGE>
ELMER'S RESTAURANTS, INC.
INDEX
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets, 1
June 30, 1996 (Unaudited) and
March 31, 1996
Condensed Consolidated Statements of Income, 2
three months ended June 30, 1996 and 1995
(Unaudited)
Condensed Consolidated Statements of Cash Flows, 3
three months ended June 30, 1996 and 1995
(Unaudited)
Note to Condensed Consolidated Financial 4
Statements (Unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5-7
PART II. OTHER INFORMATION AND SIGNATURE
Item 6. Exhibits and Reports on Form 8-K 8
Signatures 8
<PAGE>
ELMER'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 1996 March 31, 1996
ASSETS (Unaudited) (Note)
Cash and cash equivalents $1,366,285 $1,370,829
Accounts receivable 179,918 115,857
Inventories 197,929 192,028
Prepaid expenses and deposits 169,951 149,573
--------- ---------
Total current assets 1,914,083 1,828,287
Property, buildings and
equipment - net 4,838,200 4,941,410
Other assets 101,845 99,291
Intangible assets - net 1,135,251 1,159,533
--------- ---------
Total assets $7,989,379 $8,028,521
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable - current portion $ 464,608 $ 412,831
Accounts payable 581,582 643,905
Other current liabilities 284,361 250,145
--------- ---------
Total current liabilities 1,330,551 1,306,881
Long-term liabilities 3,629,540 3,792,808
--------- ---------
Total liabilities 4,960,091 5,099,689
--------- ---------
Common stock 1,620,240 1,620,240
Retained earnings 1,409,048 1,308,592
--------- ---------
Total shareholders' equity 3,029,288 2,928,832
--------- ---------
Total liabilities and
shareholders' equity $7,989,379 $8,028,521
========= =========
NOTE: The balance sheet at March 31, 1996 has been taken from the
audited financial statements at that date and condensed.
(1)
<PAGE>
ELMER'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months
Ended
June 30,
1996 1995
REVENUES:
Restaurant sales $3,770,800 $3,723,923
Franchise operations 161,584 164,393
--------- ---------
3,932,384 3,888,316
--------- ---------
COSTS AND EXPENSES:
Cost of restaurant sales 2,330,460 2,292,618
Occupancy costs 246,212 230,953
Depreciation and
amortization 171,462 175,315
General and administrative
expenses 957,000 931,207
--------- ---------
3,705,134 3,630,093
INCOME FROM OPERATIONS
BEFORE OTHER INCOME
(EXPENSE) 227,250 258,223
OTHER INCOME (EXPENSE):
- ----------------------
Other income 14,027 15,820
Interest expense (89,071) (100,068)
--------- ---------
Income before income taxes 152,206 173,975
Provision for income taxes (51,750) (59,150)
--------- ---------
NET INCOME $ 100,456 $ 114,825
========= =========
PER SHARE DATA:
Net income $ .07 $ .07
========= =========
Weighted average number of
common shares outstanding 1,499,263 1,585,188
========= =========
(2)
<PAGE>
ELMER'S RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
June 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 100,456 $ 114,825
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 147,180 147,700
Amortization 24,282 27,615
Changes in assets and liabilities:
Accounts receivable (64,061) (22,672)
Inventories (5,901) (4,411)
Prepaid expenses and deposits (20,378) (5,141)
Accounts payable (62,323) (2)
Other current liabilities 34,216 (4,150)
---------- ----------
Net cash provided by operating
activities 153,471 253,764
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, buildings
and equipment (43,970) (122,503)
---------- ----------
Net cash used by investing activities (43,970) (122,503)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable -0- 1,202,500
Payments on notes payable (111,491) (1,092,871)
Repurchase of common stock -0- (298,585)
Other assets (2,554) (20,098)
---------- ----------
Net cash used by financing activities (114,045) (209,054)
---------- ----------
Net decrease in cash and cash equivalents (4,544) (77,793)
Cash and cash equivalents, beginning of period 1,370,829 1,269,267
---------- ----------
Cash and cash equivalents, end of period $1,366,285 $1,191,474
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 89,071 $ 111,345
========== ==========
Income taxes $ 2,000 $ 26,200
========== ==========
(3)
<PAGE>
ELMER'S RESTAURANTS, INC.
-------------------------
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
The accompanying financial statements are unaudited. However, in the
opinion of management, such financial statements reflect all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the results of operations for the periods being reported.
These condensed unaudited financial statements should be read in
conjunction with the Company's latest audited financial statements and
notes thereto.
(4)
<PAGE>
ELMER'S RESTAURANTS, INC.
-------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
FINANCIAL CONDITION
The Company's working capital at June 30, 1996 totaled$583,532, which
is an increase of $62,126 from working capital of $521,406 at March 31,
1996.
Cash provided by operations totaled $153,471 for the three months
ended June 30, 1996, compared to $253,764 for the three months ended June
30, 1995. The primary reasons for the decrease were a decrease in net
income of approximately $15,000, an increase in accounts receivable and
prepaid expenses and the timing of payment of certain liabilities. Cash
used to repay indebtedness and acquire assets amounted to $155,461.
The Company believes that the cash and cash equivalents on hand at
June 30, 1996, together with funds provided by operations, will be
sufficent to fund the Company's existing operations.
RESULTS OF OPERATIONS
- ---------------------
Revenues
--------
Revenues increased $44,068 (1.1%) for the three months
ended June 30, 1996 (the first quarter of the Company's fiscal year),
compared to the corresponding period of fiscal 1995. This increase
resulted from a $46,877 (1.3%) increase in revenue from restaurant
sales.
There were eleven Company-owned restaurants at June 30, 1996.
(5)
<PAGE>
Costs and Expenses
------------------
Costs and expenses increased $75,041 (2.1%) for the three months ended
June 30, 1996, compared to the three months ended June 30, 1995, primarily
due to the operations of the Company-owned restaurants. Cost of restaurant
sales as a percentage of restaurant sales was approximately 61.8% for the
three months ended June 30, 1996 and 61.6% for the three months ended June
30, 1995. Occupancy costs increased $15,259 (6.6%) for the three months
ended June 30, 1996, compared to the three months ended June 30, 1995.
Depreciation and amortization decreased $3,853 (2.2%) for the three months
ended June 30, 1996, compared to the three months ended June 30, 1995, as a
result of fewer capital expenditures and certain assets becoming fully
depreciated. General and administrative expenses as a percentage of
revenues were 24.3% for the three months ended June 30, 1996, and 23.9% for
the three months ended June 30, 1995.
Income From Operations
----------------------
Income from operations decreased $30,973 (12.0%) for the three months
ended June 30, 1996, compared to the three months ended June 30, 1995, due
primarily to increased costs and expenses of restaurant operations.
Other Income and Expense
------------------------
Other income decreased $1,793 (11.3%) for the three
(6)
<PAGE>
months ended June 30, 1996, compared to the three months ended June 30,
1995, due primarily to the fluctuation of interest rates on the investments
held by the Company.
Interest expense decreased $10,997 (11.0%) for the three months ended
June 30, 1996, compared to the three months ended June 30, 1995, due
primarily to the decrease in principle balance of the notes payable.
Income Taxes
------------
The Company's income tax rate was approximately 34% of income before
income taxes for the three months ended June 30, 1996, and for the three
months ended June 30, 1995.
(7)
<PAGE>
(b) Reports on Form 8-K
None
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.
Date: August 12, 1996 ELMER'S RESTAURANTS, INC.
---------------
By ANITA GOLDBERG
------------------------------------------
Anita Goldberg, President
By JUANITA NELSON
------------------------------------------
Juanita Nelson, Asst. Sec./Controller
(Principal Accounting Officer)
(8)
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------
27 Financial Data Schedule
(9)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF ELMER'S RESTAURANTS, INC. AND SUBSIDIARIES AS OF
JUNE 30, 1996 AND MARCH 31, 1996, AND THE RELATED CONSOLIDATED STATEMENTS OF
INCOME CHANGES IN SHAREHOLDERS' EQUITY AND CASH FLOWS FOR EACH OF THE THREE
MONTHS IN THE PERIOD ENDED JUNE 30, 1996 AND 1995, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 1,366,285
<SECURITIES> 0
<RECEIVABLES> 184,918
<ALLOWANCES> (5,000)
<INVENTORY> 197,929
<CURRENT-ASSETS> 1,914,083
<PP&E> 11,113,247
<DEPRECIATION> (6,275,047)
<TOTAL-ASSETS> 7,989,379
<CURRENT-LIABILITIES> 1,330,551
<BONDS> 3,524,540
1,620,240
0
<COMMON> 0
<OTHER-SE> 1,409,048
<TOTAL-LIABILITY-AND-EQUITY> 7,989,379
<SALES> 3,770,800
<TOTAL-REVENUES> 3,932,384
<CGS> 2,330,460
<TOTAL-COSTS> 3,705,134
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 89,071
<INCOME-PRETAX> 152,206
<INCOME-TAX> 51,750
<INCOME-CONTINUING> 100,456
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,456
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
