August 15, 1997
OFIS Filer Support
SEC Operations Center
6842 General Green Way
Alexandria, VA 22312-2413
Dear Sirs:
Pursuant to regulations of the Securities and Exchange Commission,
submitted herewith for filing on behalf of Family Steak Houses of Florida,
Inc. is the Company's Quarterly Report on Form 10-Q for the Fiscal Quarter
ended July 2, 1997.
This filing is being effected by direct transmission to the Commission's
Edgar System.
Very truly yours,
Michael J. Walters
Secretary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter ended July 2, 1997
Commission File No. 0-14311
FAMILY STEAK HOUSES OF
FLORIDA, INC.
Incorporated under the laws of IRS Employer Identification
Florida No. 59-2597349
2113 FLORIDA BOULEVARD
NEPTUNE BEACH, FLORIDA 32266
Registrant's Telephone No. (904) 249-4197
Indicate by check mark whether the registrant 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_____
Title of each class Number of shares outstanding
Common Stock 11,031,000
$.01 par value As of August 5, 1997
FAMILY STEAK HOUSES OF FLORIDA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 2, 1997
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q,
and do not include all 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 of the results for the interim periods have been
included. Operating results for the thirteen and twenty-six week
periods ended July 2, 1997 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31,
1997. For further information, refer to the financial statements and
footnotes included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 1, 1997.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
intercompany profits, transactions and balances have been eliminated.
Note 2. Earnings Per Share
Earnings per share for the thirteen and twenty-six weeks ended July 2,
1997 and July 3, 1996 were computed based on the weighted average
number of common and common equivalent shares outstanding. Common
equivalent shares are represented by shares under option and stock
warrants.
SFAS No. 128 Required Disclosure
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128. "Earnings per Share"
which will require the Company to disclose Basic and Diluted earnings
per share on the face of the income statement. Basic earnings per
share excludes dilution, and is computed by dividing income available
to common stockholders by the weighted-average number of common shares
outstanding for the period. The Company will adopt SFAS 128 for the
fiscal year ended December 31, 1997. Application of this statement in
the second quarter of 1997 would have no material effect on earnings
per share as reported in the financial statements.
Note 3. Legal Proceedings
On May 13, 1997, the Company received notice from Aetna Life Insurance
Company, the mortgage holder of the property at which the Company's
Clearwater, Florida restaurant is located, that Aetna intended to
foreclose on the property and terminate the Company's lease due to a
default by the landlord on the mortgage. In July 1997, Aetna filed a
Motion for Summary Judgment of Foreclosure with the Circuit Court of
the 6th Judicial Court in Pinellas County. Should Aetna's motion be
granted, the Company would be forced to close the restaurant and would
realize a loss of approximately $372,000 on the write-off of leasehold
improvements at the Clearwater location. The Company intends to
vigorously defend its interest in the foreclosure action. However,
there can be no assurance that the Company will be successful in this
defense.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Quarter Ended July 2, 1997 versus July 3, 1996
The Company experienced a decrease in total sales during the
second thirteen weeks of 1997 compared to the second thirteen weeks of
1996. Same-store sales (average unit sales in restaurants that have
been open for at least 18 months and operating during comparable weeks
during the current and prior year) in the second quarter of 1997
decreased 8.9% from the same period in 1996, compared to a decrease of
5.2% from 1996 as compared to 1995.
Management believes that the decrease in same-store sales is
primarily due to the effects of increasing competition, including
several new or remodeled restaurants opened by competitors in areas
close to Company restaurants. Management is seeking to improve sales
trends by focusing on improved restaurant operations, retraining
restaurant employee staffs, remodeling certain restaurants, and
devising competitive strategies to offset the effects of new
competition.
Historically, the third and fourth quarters of each fiscal year
are less profitable for the Company than the first and second
quarters. If year-to-date sales trends continue, the Company will
continue to incur losses in the third and/or fourth quarters.
The costs and expenses of the Company's restaurants include food
and beverage, payroll and benefits, depreciation and amortization,
repairs, maintenance, utilities, supplies, advertising, insurance,
property taxes and rents. The Company's food, beverage, payroll and
benefit costs are believed to be higher than the industry average as a
percentage of sales as a result of the Company's philosophy of
providing customers with high value of food and service for every
dollar a customer spends. In total, food and beverage, payroll and
benefits, depreciation and amortization and other operating expenses
as a percentage of sales increased to 89.0% in the second quarter of
1997, from 86.2% in the same quarter of 1996, primarily due to an
increase in payroll and benefits costs as a percentage of sales.
Food and beverage costs as a percentage of sales increased to
39.5% in the second quarter of 1997 from 39.0% in the same period of
1996, primarily due to an upgrade in variety and cost of the Company's
buffet menu.
Payroll and benefits as a percentage of sales increased to 29.1%
in the second quarter of 1997 from 27.6% in the same quarter of 1996,
primarily due to the decrease in same-store sales, which resulted in
reduced efficiencies in labor scheduling.
Other operating expenses as a percentage of sales increased to
15.9% in the second quarter of 1997 from 15.4% in 1996, primarily due
to the decline in same-store sales. Depreciation and amortization
increased as a percentage of sales in the second quarter of 1997
compared to 1996, as a result of additions to property and equipment
over the last 12 months, and due to the decline in same-store sales.
General and administrative expenses as a percentage of sales were
7.9% in the second quarter of 1997, compared to 6.1% in the same
quarter of 1996. The increase was due to costs incurred in response to
the Bisco takeover attempt (see "Recent Developments"). Interest
expense increased to $398,400 during the second quarter of 1997 from
$384,500 in 1996. The increase was due primarily to interest cost
asssociated with a new restaurant opened in January 1997.
The effective income tax rates for the quarters ended July 2,
1997 and July 3, 1996 were (20.0%) and 17.8%, respectively.
Net loss for the second quarter of 1997 was $254,100, compared to
net earnings of $192,300 in 1996. Loss per share was $.02 for 1997,
compared to earnings per share of $.02 in 1996. The loss in the second
quarter was primarily due to the costs associated with the Bisco
takeover attempt, and to the decline in same-store sales.
Six Months Ended July 2, 1997 versus July 3, 1996
For the six months ended July 2, 1997, total sales decreased .8%
compared to the same period of 1996. Same-store sales decreased 7.0%
for the six months ended July 2, 1997. Management believes the
decrease was primarily due to increased competition.
Food and beverage costs for the six month period ended July 2,
1997 was 39.1%, compared to 39.5% for the same period in 1996. Payroll
and benefits increased from 27.2% in 1996 to 28.2% in 1997. The
increase was primarily due to the decrease in same-store sales, which
resulted in decreased efficiencies in labor scheduling.
For the six months ended July 2, 1997, other operating expenses
increased to 15.1% from 14.9% in 1996, primarily due to the decline in
same-store sales. Depreciation and amortization increased as a
percentage of sales for the six month period ended July 2, 1997,
compared to the same period of 1996, due to additions to property and
equipment over the past year and the decline in same-store sales.
For the six months ended July 2, 1997, general and administrative
expenses increased to 6.7% of sales from 5.8% for the same period in
1996 due to the costs associated with the Bisco takeover attempt.
Interest expense increased for the first six months of 1997 to
$788,900 from $775,500 for the same period in 1996, due to additional
interest cost from the addition of a new restaurant in January 1997.
The effective income tax rates for the six-month periods ended
July 2, 1997 and July 3, 1996 were 20.1% and 16.1% respectively.
Net earnings for the six months ended July 2, 1997 were $98,700
or $.01 per share, compared to net earnings of $453,400, or $.04 per
share for the same period in 1996.
The Company's operations are subject to some seasonal
fluctuations. Revenues per restaurant generally increase from January
through April and decline from September through December. Operating
results for the quarter ended July 2, 1997 are not necessarily
indicative of the results that may be expected for the fiscal year
ending December 31, 1997.
Recent Developments
In May 1997, the Company signed a letter of intent to purchase
land on which the Company intends to construct its 26th Ryan's
restaurant. The purchase of the property is contingent upon completion
of due diligence by the Company regarding the suitability of the
property for construction. The Company expects to open the restaurant
in the first quarter of 1998.
On March 6, 1997, Bisco Industries, Inc. ("Bisco"), a shareholder
of the Company, launched an unsolicited tender offer designed to
acquire approximately 24% of the Company's common stock. If the tender
offer is successful, Bisco and its affiliates will own a total of
approximately 34% of the Company's outstanding common stock. The
tender offer is subject to a number of conditions, including the non-
applicability of a Florida law which restricts a shareholder's ability
to vote the Company's shares if the shareholder acquires 20% or more
of the Company's outstanding shares, unless a majority of the
Company's shareholders agree to grant voting rights to this
shareholder.
On April 30, 1997, Bisco filed a Consent Solicitation Statement
requesting that the Company's shareholders approve several amendments
to the Company's bylaws designed to allow Bisco to complete its tender
offer. Bisco failed to obtain the necessary consents from
shareholders, and the solicitation deadline expired on June 30, 1997.
The Company's Board of Directors opposes the Bisco tender offer
and opposed the Bisco consent solicitation, and has implemented
several measures designed to protect the Company's shareholders
against the potential adverse effects of an unsolicited takeover.
As of July 11, 1997, approximately 2.4 million shares of the
Company's common stock had been tendered to Bisco. On July 11, 1997
Bisco announced that it was extending the tender offer until October
31, 1997. If the Bisco tender offer is successful, management is
uncertain of the impact on the Company's future operations. Bisco has
detailed several possible actions they might take if successful in the
tender offer, including disposing of the Company's restaurant
operations.
On July 24, 1997, Bisco notified the Company that it was
demanding a special meeting of shareholders be called for the purpose
of voting on Bisco sponsored resolutions to: (i) amend the Company's
bylaws to require that the Board of Directors redeem the Company's
Shareholder Rights Plan and prohibit the adoption of similar plans in
the future without shareholder approval, (ii) amend the Company's
bylaws to opt out of the Florida Control Share Act, and remove three
outside directors and replace them with Bisco nominees. The Company is
currently considering whether Bisco's demand for a special meeting of
shareholders is lawful. If the Bisco proposals are adopted by the
Company's shareholders, Bisco would effectively obtain complete
control of the Company.
Possible Delisting of Securities from The Nasdaq Stock Market.
The Company's common stock is currently quoted on the Nasdaq
National Market. On November 6, 1996, the Nasdaq National Market
proposed changes to the listing and maintenance requirements which
were submitted to the Securities and Exchange Commission for final
approval on February 28, 1997. If the current proposal is approved
without modification, the Company's qualification for continued
listing on the Nasdaq National Market would require that (i) the
Company maintain at least $4.0 million in net tangible assets, (ii)
the minimum bid price of the Common Stock be $1.00 or more per share,
(iii) there be at least 750,000 shares in the public float, valued at
a minimum $5.0 million or more, (iv) the Common Stock have at least
two active market makers and (v) the Common Stock be held by at least
400 holders.
If the Company is unable to satisfy the Nasdaq National Market's
maintenance requirements, the Company's securities may be delisted
from the Nasdaq National Market. In such event, trading, if any, in
the Common Stock would thereafter be conducted in the over-the-counter
markets in the so-called "pink sheets" or the National Association of
Securities Dealers, Inc.'s "Electronic Bulletin Board". Consequently,
the liquidity of the Company's securities could be impaired, not only
in the number of shares that could be bought and sold, but also
through delays in the timing of the transactions, a reduction in the
number and quality of security analysis' and the news media's coverage
of the Company, lower prices for the Company's securities than might
otherwise be attained and in a larger spread between the bid and asked
prices for the Company's securities.
In addition, the Company's securities were to be delisted from
the Nasdaq National Market, the Company's securities could become
subject to Rule 15g-9 under the Exchange Act relating to penny stocks,
which imposes additional sales practice requirements on broker-dealers
which sell such securities to persons other than established customers
and "accredited investors" ( generally, individuals with net worth in
excess of $1,000,000 or annual incomes exceeding $200,000, or $300,000
together with their spouses). Commission regulations define a "penny
stock" to be any equity security that is not listed on The Nasdaq
Stock Market or a national securities exchange and that has a market
price (as therein defined) of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain
exceptions. If the Company's securities were subject to the rules on
penny stocks, the market liquidity for the Company's securities could
be adversely affected.
The Company's stock has consistently had a bid price of less than
$1.00 in recent years. If the proposed NASDAQ regulations are adopted
(as expected by NASDAQ), the Company's stock could be "delisted"
approximately six months after the effective date of adoption.
Management is evaluating options to maintain its listing on the
NASDAQ National Market. However, there can be no assurance that the
Company's stock will be traded on this market after January 1998.
Liquidity and Capital Resources
Substantially all of the Company's revenues are derived from cash
sales. Inventories are purchased on credit and are converted rapidly
to cash. Therefore, the Company does not carry significant
receivables or inventories. As a result, working capital requirements
for continuing operations are not significant.
At July 2, 1997, the Company had a working capital deficit of
$277,600, compared to a working capital deficit of $616,800 at January
1, 1997. The decrease in the working capital deficit during the first
six months in 1997 was due primarily to the reclassification of a
mortgage receivable from long-term to current.
Cash provided by operating activities decreased to $1,151,800 in
the first six months of 1997 from $1,769,500 in the same period of
1996. This decrease is primarily due to lower net earnings, and to
increases in certain current assets as a result of timing differences
in transactions which occurred in 1997.
The Company spent approximately $1,436,500 in the first six
months of 1997 for restaurant equipment and improvements. Capital
expenditures for 1997 and 1998, based on present costs and plans for
expansion, are estimated to be $3,100,000 (not including the sales-
leaseback financing for the new restaurant as discussed above) and
$4,100,000 respectively. The Company projects that cash generated from
operations will be sufficient to fund these improvements.
In December 1996, the Company entered into a $15.36 million Loan
Agreement with FFCA Mortgage Corporation ("FFCA"). The Loan Agreement
governs eighteen Promissory Notes payable to FFCA. Each Note is
secured by a mortgage on a Company restaurant property. The Promissory
Notes provide for a term of twenty years and an interest rate equal to
the thirty-day LIBOR rate plus 3.75%, adjusted monthly. The Loan
Agreement provides for various covenants, including the maintenance of
prescribed debt service coverages. As of July 2, 1997, the outstanding
balance due under the loan was $15,226,700.
The Company used the proceeds of the FFCA loan to retire its
Notes with Cerberus Partners, L.P. ("Cerberus") and its loans with the
Daiwa Bank Limited and SouthTrust Bank of Alabama, N.A. The Company
realized a discount on the retirement of the Cerberus Notes, which was
partially offset by unamortized debt issuance costs. The resulting
gain of $348,500, net of income taxes, has been accounted for as an
extraordinary item 1n 1996. In addition, the Company retired Warrants
for 1,050,000 shares of the Company's common stock previously held by
Cerberus. Cerberus continues to hold Warrants to purchase 700,000
shares of the Company's common stock at an exercise price of $.40 per
share.
Also in December 1996, the Company entered into a separate loan
agreement with FFCA under which it may borrow up to an additional
$4,640,000 in 1997. This additional financing would be evidenced by
four additional Promissory Notes secured by mortgages on four Company
restaurant properties. The terms and conditions of this loan agreement
are substantially identical to those of the loan agreement described
above. In July 1997, the Company made an agreement with FFCA extending
the expiration date of funding for the agreement through June 1998.
Impact of Inflation
Costs of food, beverage, and labor are the expenses most affected
by inflation in the Company's business. Although inflation has not
had a significant impact on the Company in the past, there can be no
assurance that it will not in the future. A significant portion of
the Company's employees are paid at the federally established
statutory minimum wage. On August 8, 1996, President Clinton signed
into law a bill which will raise the federally mandated minimum wage
by $.50 per hour on October 1, 1996, and by an additional $.40 per
hour on September 1, 1997.
The Company raised sales prices approximately 3.0% in 1996 in
order to offset the effect of higher payroll and benefit costs. Sales
prices have not been increased to date in 1997, but the Company may
raise sales prices in response to the September 1997 minimum wage
increase.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 13, 1997, the Company received notice from Aetna Life
Insurance Company, the mortgage holder of the property at
which the Company's Clearwater, Florida restaurant is
located, that Aetna intended to foreclose on the property
and terminate the Company's lease due to a default by the
landlord on the mortgage. In July 1997, Aetna filed a Motion
for Summary Judgment of Foreclosure with the Circuit Court
of the 6th Judicial Court in Pinellas County. Should Aetna's
motion be granted, the Company would be forced to close the
restaurant and would realize a loss of approximately
$372,000 on the write-off of leasehold improvements at the
Clearwater location. The Company intends to vigorously
defend its interest in the foreclosure action. However,
there can be no assurance that the Company will be
successful in this defense.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On July 2, 1997, the Company held its annual meeting of
shareholders to elect directors to serve for the
upcoming year.
(b) The following table sets forth the number of votes for
and against each of the nominees for director.
Nominee For Against
Lewis E. Christman, Jr. 5,946,185 3,112,411
Robert J. Martin 5,935,190 3,123,406
Joseph M. Glickstein, Jr. 5,947,352 3,111,244
Richard M. Gray 5,950,245 3,108,351
Edward B. Alexander 5,937,759 3,120,837
All nominees for director were elected by the affirmative
vote of a majority of the 9,058,596 shares of the Company's
common stock represented in person or by proxy at the annual
meeting of shareholders.
(c) The following table sets forth the number of votes for,
against or withheld, and number of abstentions and non-
votes, regarding the following proposals;
1) Proposal to increase the Company's authorized common
shares:
For Against Abstain Non-Votes
3,145,119 3,433,827 121,893 3,050,757
A majority vote of the Company's outstanding shares
(approximately 5,515,000 shares) was required to pass
the above proposal. Since the proposal failed to
receive this number of "for" votes, it failed to pass.
2) Shareholder proposal to opt out of the Florida Control
Share Act:
For Against Abstain Non-Votes
3,877,845 2,536,666 217,726 2,426,359
A majority vote of the Company's outstanding shares
(approximately 5,515,000 shares) was required to pass
the above proposal. Since the proposal failed to
receive this number of "for" votes, it failed to pass.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report
on Form 10-Q, and this list comprises the Exhibit Index.
No. Exhibit
27.01 Financial Data Schedule.
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.
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Registrant)
/s/ Lewis E. Christman
Date: August 12, 1997 Lewis E. Christman, Jr.
President and CEO
/s/ Edward B. Alexander
Date: August 12, 1997 Edward B. Alexander
Vice President of Finance
(Principal Financial and Accounting
Officer)
/s/ Michael J. Walters
Date: August 12, 1997 Michael J. Walters
Controller / Secretary
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.
FAMILY STEAK HOUSES OF FLORIDA, INC.
(Registrant)
____________________________________
Date: August 12, 1997 Lewis E. Christman, Jr.
President and CEO
____________________________________
Date: August 12, 1997 Edward B. Alexander
Vice President of Finance
(Principal Financial and Accounting
Officer)
____________________________________
Date: August 12, 1997 Michael J. Walters
Controller / Secretary
Family Steak Houses of Florida, Inc.
Consolidated Results of Operations
(Unaudited)
<TABLE>
<CAPTION> For The Quarters Ended
=======================
July 2, July 3,
1997 1996
=======================
<S> <C> <C>
Sales $9,447,200 $9,815,100
Cost and expenses:
Food and beverage 3,728,700 3,824,800
Payroll and benefits 2,748,000 2,712,300
Depreciation and amortization 430,100 413,200
Other operating expenses 1,497,500 1,507,500
General and administrative ex 744,200 602,400
Franchise fees 283,200 294,200
Loss from disposition of equi 61,000 1,700
9,492,700 9,356,100
----------- -----------
(Loss) earnings from operati (45,500) 459,000
Interest and other income 126,400 117,800
Interest expense (398,400) (384,500)
----------- -----------
(Loss) earnings before incom (317,500) 192,300
(Benefit) provision for income (63,400) --
----------- -----------
Net (loss)earnings ($254,100) $192,300
=========== ===========
Net (loss) earnings per common and
equivalent share ($0.02) $0.02
=========== ===========
Weighted average common shares
and equivalents 11,641,000 12,011,000
=========== ===========
See accompanying notes to consolidated financial state
</TABLE>
Family Steak Houses of Florida, Inc.
Consolidated Results of Operations
(Unaudited)
<TABLE>
<CAPTION> For The Six Months Ended
========================
July 2, July 3,
1997 1996
========================
<S> <C> <C>
Sales $20,006,300 $20,174,800
Cost and expenses:
Food and beverage 7,816,900 7,975,000
Payroll and benefits 5,645,400 5,495,600
Depreciation and amortization 845,200 838,500
Other operating 3,014,700 3,001,300
General and administrative 1,332,000 1,162,300
Franchise fees 599,800 604,800
Disposition of equipment 78,300 20,300
19,332,300 19,097,800
----------- -----------
(Loss) earnings from operations 674,000 1,077,000
Interest and other income 238,400 238,900
Interest expense (788,900) (775,500)
----------- -----------
(Loss) earnings before income
taxes 123,500 540,400
(Benefit) provision for income
taxes 24,800 87,000
----------- -----------
Net (loss)earnings $98,700 $453,400
=========== ===========
Net (loss) earnings per common and
equivalent share $0.01 $0.04
=========== ===========
Weighted average common shares
and equivalents 11,616,000 12,062,000
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
Family Steak Houses of Florida, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION> July 2, January 1,
1997 1997
======================
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $2,335,700 $1,750,800
Investments 600,300 1,093,100
Receivables 130,400 566,100
Current portion of mortgages re 526,300 120,600
Income taxes receivable 83,000 --
Inventories 231,200 202,300
Prepaid and other current asset 385,900 247,200
----------- -----------
Total current assets 4,292,800 3,980,100
Mortgages receivable 624,400 1,089,100
Property and equipment:
Land 9,094,700 9,089,200
Buildings and improvements 19,880,500 19,676,500
Equipment 12,784,800 12,240,400
----------- -----------
41,760,000 41,006,100
Accumulated depreciation (15,281,800)(14,656,200)
----------- -----------
Net property and equipment 26,478,200 26,349,900
Property held for resale 552,800 552,800
Other assets, deferred charges,
net of accumulated amortization 820,400 831,600
----------- -----------
$32,768,600 $32,803,500
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,620,200 $1,183,000
Accounts payable - construction -- 411,800
Accrued liabilities 2,668,700 2,582,100
Income taxes payable -- 84,800
Current portion of long-term
debt 279,000 332,700
Current portion of obligation
under capital lease 2,500 2,500
----------- -----------
Total current liabilities 4,570,400 4,596,900
Long-term debt 14,949,400 15,107,200
Obligation under capital lease 1,057,200 1,058,600
Deferred income taxes 11,500 --
Deferred revenue 43,100 43,100
----------- -----------
Total liabilities 20,631,600 20,805,800
Shareholders' equity:
Preferred stock of $.01 par;
authorized 10,000,000 shares;
none issued -- --
Common stock of $.01 par;
authorized 20,000,000 shares;
outstanding 11,031,000 in 1997
and 10,920,700 in 1996 110,300 109,200
Additional paid-in capital 8,137,900 8,098,400
Retained earnings 3,888,800 3,790,100
----------- -----------
Total shareholders' equity 12,137,000 11,997,700
----------- -----------
$32,768,600 $32,803,500
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE>
Family Steak Houses of Florida, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION. For the Six Months En
==========
July 2, July 3,
1997 1996
========== ==========
<S> <C> <C>
Operating activities:
Net earnings $98,700 $453,400
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 845,200 838,500
Directors' fees in the form of
stock options 10,000 10,000
Amortization of loan discount -- 27,800
Amortization of loan fees 11,000 44,900
Loss on disposition of equipment 78,300 20,300
Decrease (increase) in:
Receivables (40,400) 12,900
Income taxes receivable (83,000) --
Inventories (28,900) 9,300
Prepaids and other current assets (138,700) 31,300
Other assets (50,900) --
Increase (decrease) in:
Accounts payable 437,200 229,100
Accrued liabilities and deferred revenu 86,600 68,000
Income taxes payable (84,800) 24,000
Deferred income taxes 11,500 --
---------- ----------
Net cash provided by operating activities 1,151,800 1,769,500
---------- ----------
Investing activities:
Proceeds from sale of property and equipmen -- 555,300
Principal receipt on notes receivable 59,000 152,100
Sale of investments 492,800 --
Purchase of investments -- (554,000)
Capital expenditures (1,436,500) (388,200)
---------- ----------
Net cash used by investing activities (884,600) (234,800)
---------- ----------
Financing activities:
Payments on long-term debt (211,500) (789,900)
Construction draw on capital lease 500,100 --
Payments on capital lease (1,400) --
Proceeds from the issuance of common stock 30,600 8,200
---------- ----------
Net cash provided (used) by financing
activities 317,800 (781,700)
---------- ----------
Net increase in cash and cash equivalents 585,000 753,000
Cash and cash equivalents - beginning of
period 1,750,800 711,400
---------- ----------
Cash and cash equivalents - end of period $2,335,700 $1,464,400
========== ==========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $719,100 $704,300
Cash paid during the period for income ta $181,000 $38,000
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This fincial data schedule contains summary financial information
extracted from the Company's 1997 Form 10Q for the Quarter ended
July 2, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-1997
<PERIOD-END> JUL-02-1997
<CASH> 2335700
<SECURITIES> 600300<F1>
<RECEIVABLES> 656700
<ALLOWANCES> 0
<INVENTORY> 231200
<CURRENT-ASSETS> 4292800
<PP&E> 41760000
<DEPRECIATION> 15281800
<TOTAL-ASSETS> 3278600
<CURRENT-LIABILITIES> 4570400
<BONDS> 0
0
0
<COMMON> 110300
<OTHER-SE> 12026700
<TOTAL-LIABILITY-AND-EQUITY> 32768600
<SALES> 9447200
<TOTAL-REVENUES> 9447200
<CGS> 3728700
<TOTAL-COSTS> 9492700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 398400
<INCOME-PRETAX> (317500)
<INCOME-TAX> (63400)
<INCOME-CONTINUING> (254100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (254100)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
<FN>
<F1>Represents investments in certificates of deposits with maturities
of less than one year.
</FN>
</TABLE>
