August 13, 1999
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 June 30, 1999.
This filing is being effected by direct transmission to the Commission's
Edgar Systems.
Very truly yours,
Edward B. Alexander
CFO
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 June 30, 1999
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 2,409,029
$.01 par value As of August 6, 1999
FAMILY STEAK HOUSES OF FLORIDA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(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 June 30, 1999 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 29,
1999. 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 December 30, 1998.
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
Basic earnings per share for the thirteen weeks ended June 30, 1999
and July 1, 1998 were computed based on the weighted average number of
common shares outstanding. Diluted earnings per share for those
periods have been computed based on the weighted average number of
common shares outstanding, giving effect to all dilutive potential
common shares that were outstanding during the period. Dilutive shares
are represented by shares under option and stock warrants.
Note 3. New Accounting Pronouncement and Reclassification
At March 31, 1999, the Company adopted the provisions of the American
Institute of Certified Public Accountants' Statement of Position
("SOP") 98-5, "Reporting on the Costs of Start-Up Activities". SOP 98-
5 requires pre-opening costs to be expensed as incurred. Accordingly,
all unamortized pre-opening costs at March 31, 1999, amounting to
$13,700, were charged to 1999 depreciation and amortization. For the
three months and year-to-date ended June 30, 1999, all pre-opening
costs are included in "other operating expenses" and the current and
prior year's amortization of pre-opening costs was reclassified
accordingly.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Quarter Ended June 30, 1999 versus July 1, 1998
The Company experienced an increase in total sales during the
second thirteen weeks of 1999 compared to the second thirteen weeks of
1998. 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 1999
increased 1.7% from the same period in 1998, compared to an increase
of 1.1% from 1998 as compared to 1997. In addition to the same-store
sales increase, total sales increased due to the opening of new stores
in June 1998 and April 1999.
Management believes that the increase in same-store sales is
primarily due to significant increases in sales at certain restaurants
remodeled by the Company. These remodels included installation of
scatter bars at three restaurants, which resulted in significant same-
store sales gains at these locations. These increases were somewhat
offset by decreases in sales at other Company restaurants caused by
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 one additional restaurant, and devising competitive
strategies to offset the effects of new competition. Management plans
to sell restaurants which are not meeting sales and profit
expectations, and has listed six restaurants for sale. In addition,
one restaurant not listed for sale was sold in July 1999. Proceeds
from any sales of individual restaurants would be used either to
reduce long-term debt or build new restaurants with more competitive
facilities in superior locations.
Due primarily to the negative effects of increasing competition
on the Company's sales and profitability, in March 1998 the Company
announced that it had retained an investment banking firm specializing
in the restaurant industry to assist the Company in identifying and
evaluating strategic opportunities which would enhance shareholder
value. This agreement has expired and management does not currently
believe that any strategic transaction will occur in the near future.
However, the Company may continue to investigate and evaluate
strategic transactions in the future.
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 would
likely incur losses in the third and/or fourth quarters.
The costs and expenses of the Company's restaurants include food
and beverage, payroll, payroll taxes and employee 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 88.8%
in the second quarter of 1999, from 87.1% in the same quarter of 1998,
primarily due to an increase in payroll and benefits costs as a
percentage of sales.
Food and beverage costs as a percentage of sales decreased to
38.9% in the second quarter of 1999 from 39.2% in the same period of
1998, primarily due to sales price increases implemented by the
Company in 1999.
Payroll and benefits as a percentage of sales increased to 29.2%
in the second quarter of 1999 from 27.8% in the same quarter of 1998,
primarily due to a reduction of $100,000 in the Company's workers'
compensation reserve in 1998, and to high payroll costs associated
with the opening of a new restaurant in April 1999.
Other operating expenses as a percentage of sales increased to
15.9% in the second quarter of 1999 compared to 15.6% in 1998,
primarily due to a change in accounting for opening costs of new
restaurants (see Note 3 to the financial statements). Depreciation and
amortization was 4.5% as a percentage of sales in the second quarters
of 1999 and 1998.
General and administrative expenses as a percentage of sales were
6.6% in the second quarter of 1999, compared to 6.4% in the same
quarter of 1998. The increase was due primarily to costs incurred in
1999 from the proxy contest with Bisco Industries, Inc. in connection
with the Company's 1999 Annual Meeting of Shareholders (see "Recent
Developments"). Interest expense increased to $428,800 during the
second quarter of 1999 from $412,900 in 1998. The increase was due
primarily to the borrowing of $2.6 million under the Company's credit
facility in 1999.
The effective income tax rates for the quarters ended June 30,
1999 and July 1, 1998 were 0.0% and 20.0%, respectively.
Net loss for the second quarter of 1999 was $192,500, compared to
net earnings of $23,400 in 1998. Loss per share was $.08 for 1999,
compared to net earnings per share of $.01 in 1998.
Six Months Ended June 30, 1999 versus July 1, 1998
For the six months ended June 30, 1999, total sales increased
4.5% compared to the same period of 1998. Same-store sales increased
0.6% for the six months ended June 30, 1999.
Food and beverage costs as a percentage of sales for the six
month periods ended June 30, 1999 and July 1, 1998 were 38.9%. Payroll
and benefits as a percentage of sales increased to 28.5% in 1999 from
27.7% in 1998. The increase was primarily due to lower workers'
compensation costs in 1998.
For the six months ended June 30, 1999, other operating expenses
decreased to 15.1% from 15.3% in 1998, primarily due to lower electric
and gas utilities costs. Depreciation and amortization increased as a
percentage of sales for the six month period ended June 30, 1999,
compared to the same period of 1998, due to additions to property and
equipment over the past year.
For the six months ended June 30, 1999, general and
administrative expenses increased to 6.2% of sales from 6.1% for the
same period in 1998. Interest expense increased for the first six
months of 1999 to $811,200 from $808,400 for the same period in 1998,
due to additional interest cost from the borrowing of $2.6 million
under the Company's credit facility, but offset by the Company
capitalizing interest expense of $42,700 in 1999.
The effective income tax rates for the six-month periods ended
June 30, 1999 and July 1, 1998 were 0.0% and 20.0%, respectively.
Net earnings for the six months ended June 30, 1999 were $41,300
or $.02 per share, compared to net earnings of $188,000, or $.08 per
share for the same period in 1998.
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 June 30, 1999 are not necessarily
indicative of the results that may be expected for the fiscal year
ending December 29, 1999.
Recent Developments
Status of Listing of Company Securities on Nasdaq Resolved
The Company had previously announced that the status of the
listing of its common stock was in jeopardy with the Nasdaq SmallCap
Market due to a failure to meet a requirement to maintain a minimum
bid price of $1.00 or more per share. Nasdaq notified the Company on
June 22, 1999 that the stock had met the $1.00 minimum bid price
requirement, and therefore the Company's stock listing would be
maintained. The trading symbol of the stock was changed from RYFLC to
RYFL.
Change in Control of Board of Directors
In July 1999, the Company held its Annual Meeting of Shareholders
for the purpose of electing its Board of Directors for the next year.
Four nominees of Bisco Industries, Inc., the Company's largest
shareholder, were elected following a proxy contest with the previous
Board of Directors. During the annual meeting, members of the previous
Board of Directors, Mr. Lewis E. Christman, Jr., Mr. Edward B.
Alexander, Mr. Richard M. Gray, Mr. Joseph M. Glickstein, Jr. and Mr.
G. Alan Howard resigned as directors. As a result, there are now three
vacancies on the Company's Board of Directors.
Following the annual meeting, four management employees resigned
from the Company and received change in control payments as required
by the terms of their employment agreements with the Company. The
change in control payments totaled approximately $900,000 and will
have a material impact on the Company's earnings for the third quarter
and for the year. The Company subsequently reached agreements with
these four employees to retain their services on an "at will" basis
with the same salaries and benefits in effect prior to the
resignations.
Following the annual meeting, the new Board of Directors approved
the redemption by the company of its outstanding "poison pill". The
record date for the redemption of the rights is August 16, 1999. The
holders of the outstanding rights as of the record date will receive
$.005 per right in cash, resulting in an expense to the Company of
approximately $12,000, plus administrative costs. The Board also
approved a resolution providing that Florida's Control Share statute
will not apply to further acquisitions of shares of the Company's
common stock by Mr. Ceiley, Bisco Industries, Inc. or their
affiliates. Mr. Ceiley had previously indicated to the Board that he
was interested in acquiring an additional 10% interest in the Company
in open market transactions or privately negotiated purchases.
Restaurant Closures
In July 1999, the Company sold a restaurant in Jacksonville,
Florida, and closed the restaurant in August 1999. The sale will
result in an estimated pre-tax gain of approximately $270,000 in the
third quarter of 1999.
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 June 30, 1999, the Company had a working capital surplus of
$342,500, compared to a working capital deficit of $744,100 at
December 30, 1998. The increase in the working capital during the
first six months in 1999 was due primarily to increases in cash
provided from new borrowings under the Company's long-term debt
agreement and to cash generated from operations.
Cash provided by operating activities decreased to $1,213,800 in
the first six months of 1999 from $1,959,200 in the same period of
1998. This decrease is primarily due to decreases in certain current
assets and to increases in certain current liabilities which occurred
in 1998, but not in 1999.
The Company spent approximately $2,291,500 in the first six
months of 1999 for property and equipment. Total capital expenditures
for 1999, based on present costs and plans for expansion, are
estimated to be $4,500,000. The Company projects that cash generated
from operations, plus additional borrowing under the Company's credit
facility 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 June 30, 1999, the
outstanding balance due under the loan was $14,193,300.
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. In addition,
the Company retired Warrants for 210,000 shares of the Company's
common stock previously held by Cerberus. Cerberus continues to hold
Warrants to purchase 140,000 shares of the Company's common stock at
an exercise price of $2.00 per share.
Also in December 1996, the Company entered into a separate loan
agreement with FFCA under which it borrowed an additional $2,590,000 in
1998. This additional financing is evidenced by three additional Promissory
Notes secured by mortgages on three Company restaurant properties. The
terms and conditions of this loan agreement are substantially identical to
those of the loan agreement described above. As of June 30, 1999, the
outstanding balance under this loan was $2,540,800.
In October 1998, the Company received two commitments for new
financing from FFCA. The Company borrowed a total of $2.6 million in 1999
under the first commitment, which is secured by mortgages on two Company
restaurant properties. As of June 30, 1999, the outstanding balance under
this loan was $2,596,200.
The second commitment was for construction financing for two new
restaurants to be built in 1999. Terms of this commitment include funding
of a maximum of $1,600,000 per restaurant. Any request for funding must be
submitted to FFCA before the expiration date of October 1, 1999. Other
terms and conditions of these loan agreements are substantially identical
to those of the $15.36 million Loan Agreement described above.
Proceeds from the two new loan commitments should be sufficient to
satisfy the Company's capital requirements through the second quarter of
2000. The Company's ability to build additional restaurants or make other
capital improvements after 1999 is dependent on its ability to secure
additional new financing.
The preceding discussion of liquidity and capital resources contains
certain forward-looking statements. Forward-looking statements involve a
number of risks and uncertainties identified from time to time in the
Company's annual report, quarterly filings, and public announcements.
INFORMATION SYSTEMS AND THE YEAR 2000
General. The Company uses and is dependent upon a significant number of
computer software programs and operating systems to conduct its business.
Such programs and systems include those developed and maintained by the
Company, software and systems purchased from outside vendors and software
and systems used by the Company's third party providers. The Company
recognizes that the Year 2000 (Y2K) issue is one of the most complex data
processing problems faced by businesses worldwide.
State of Readiness. The Company's approach to Y2K compliance includes a
standard set of methods and tools to coordinate and drive the project to
completion. The approach consists of six phases:
1. Assessment - Defining each system and process to determine if
there are date dependencies and how to resolve them.
2. Remediation - Implementing the steps identified in the assessment
phase to repair date errors.
3. Testing - Developing and implementing test scripts to determine
if remediated code is correct.
4. Implementation - Moving all approved changes from testing into
production.
5. Check-Off - Formally acknowledging that each process has been
implemented and is functioning correctly.
6. Clean Management - Employing procedures and practices to prevent
the reintroduction of non-compliant applications, products and
processes into the operating environment, once Y2K has been
achieved.
Testing and remediation of critical systems is underway. The Company
is having its accounting software revised and rewritten and expects to have
all of the new software installed by the end of the third quarter of 1999.
The Company is currently behind schedule in testing the components of the
revised software that has been rewritten to date, but expects to be able to
complete testing by the end of 1999. It is also testing cash registers and
other systems at its restaurants and expects to fix or replace any Y2K
noncompliant equipment and systems in the next several months. The Company
believes that there are no material impediments to its goal of Y2K
readiness.
The Company has relationships with vendors, customers and other
third parties that rely on software and systems that may not be Y2K
compliant. With respect to such third parties, Y2K compliance matters
will not be within the Company's direct control. There can be no
assurance that Y2K compliance failures by such third parties will not
have a material adverse effect on the Company's results of operations,
although the Company is in contact with these third parties in
connection with its contingency planning. To date the Company has not
received any responses from its Y2K inquiries of vendors which would
lead management to believe that there will be any adverse impact on
Company operations.
Due to the unique nature of the problem and lack of historical
experience, it is difficult to predict with certainty what will happen
after December 31, 1999. The Company may encounter unanticipated third
party failures, a failure to have successfully concluded system remediation
efforts and other problems. Any of these events may have a material adverse
impact on the Company's results of operations, financial condition or cash
flows. Potential sources of risk include the inability of principal
suppliers to be Year 2000 ready, which could result in delays in product
deliveries from suppliers, and disruption of the distribution channel,
including transportation vendors. The amount of any potential losses
related to these occurrences cannot be reasonably estimated at this time.
The most likely worst case scenario for the Company is that a
significant number of our restaurants will be temporarily unable to operate
due to public infrastructure failures and/or food supply problems. Some
restaurants may have problems for extended periods of time. Communications
between the corporate headquarters and the restaurants could also be
disrupted. The failure of restaurants to operate would result in reduced
revenues and cash flows for the Company during the disruption period. Loss
of restaurant sales would be partially mitigated by reduced costs.
The total cost to the company of these Y2K compliance activities is
expected to be approximately $100,000, of which approximately $20,000 has
been spent to date. These costs and the date on which the company plans to
complete the Y2K modifications and testing are based on management's best
estimates, which were derived using numerous assumptions about future
events, including the continued availability of certain resources, third-
party modification plans and other factors. They do not include the cost
of third party's Y2K efforts or of implementing the contingency plan.
However, there can be no guarantee that these estimates will be achieved,
and actual results could differ from those plans
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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 21, 1999, 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 Withheld
Edward B. Alexander 702,853 18,280
Glen F. Ceiley 1,670,090 116,781
Lewis E. Christman, Jr. 700,973 20,160
Jay Conzen 1,669,779 117,092
Joseph M. Glickstein, Jr. 677,939 43,194
Richard M. Gray 701,003 20,130
G. Alan Howard 679,169 41,964
Steven Catanzaro 1,062,804 2,934
William Means 1,062,584 3,154
The Company is unable to determine the number of broker non-
votes.
Glen F. Ceiley, Jay Conzen, Steven Catanzaro and William Means
were elected as directors by the affirmative vote of a majority
of the 1,789,078 shares of the Company's common stock represented
in person or by proxy at the annual meeting of shareholders.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of the report on
Form 10-Q, and the list comprises the Exhibit Index.
Exhibit 11.1
The table below details the number of shares and common stock equivalents
used in the computation of basic and diluted earnings per share:
Three Months Ended Six Months Ended
6/30/99 7/1/98 6/30/99 7/1/98
Basic:
Weighted average common
shares outstanding used
in computing basic
earnings per share 2,409,000 2,370,000 2,398,000 2,324,000
========= ========= ========= =========
Basic (loss) earnings
per share $ (0.08) $ 0.01 $ .02 $ .08
========= ========= ========= =========
Diluted:
Weighted average common
shares outstanding 2,409,000 2,370,500 2,401,800 2,343,100
Effects of shares
issuable under stock
plans using the treasury
method - 21,200 1,200 20,000
Effects of warrants
issuable using the
treasury method - 34,300 33,900
Shares used in computing --------- ---------- ---------- ---------
diluted earnings
per share 2,409,000 2,426,000 2,403,000 2,397,000
========= ========= ========= =========
$ (0.08) $ 0.01 $ .02 $ .08
========= ========= ========= =========
27.01 Financial Data Schedule
(b) On August 2, 1999, the Company filed a report on Form 8-K
regarding the election by shareholders of a new Board of
Directors, and the redemption by the new Board of the
Company's "poison pill" through the redemption of all
outstanding rights.
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, 1999 Lewis E. Christman, Jr.
President and CEO
/s/ Edward B. Alexander
-------------------------
Date: August 12, 1999 Edward B. Alexander
Vice President of Finance
(Principal Financial and Accounting
Officer)
Family Steak Houses of Florida, Inc.
Consolidated Results of Operations
(Unaudited)
<TABLE>
For The Quarters Ended
------------------------
<CAPTION> June 30, July 1,
1999 1998
----------- -----------
<C> <C>
<S>
Sales $10,143,100 $9,703,800
Cost and expenses:
Food and beverage 3,944,500 3,803,500
Payroll and benefits 2,963,500 2,695,000
Depreciation and amortization 456,700 438,000
Other operating expenses 1,612,800 1,516,400
General and administrative expenses 674,500 619,300
Franchise fees 303,700 290,600
Loss on store closings 25,000 --
Loss from disposition of equipment 20,100 42,300
----------- ----------
10,000,800 9,405,100
Earnings from operations 142,300 298,700
Interest and other income 94,000 143,500
Interest expense (428,800) (412,900)
----------- ----------
Earnings (loss) before income taxes (192,500) 29,300
Provision for income taxes -- 5,900
----------- ----------
Net earnings (loss) ($192,500) $23,400
=========== ==========
Basic earnings (loss) per share ($0.08) $0.01
=========== ==========
Diluted earnings (loss) per share ($0.08) $0.01
=========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
Family Steak Houses of Florida, Inc.
Consolidated Results of Operations
(Unaudited)
<TABLE>
For The Six Months Ended
--------------------------
<CAPTION> June 30, July 1,
1999 1998
------------- ------------
<C> <C>
<S>
Sales $20,289,500 $19,694,400
Cost and expenses:
Food and beverage 7,886,700 7,671,000
Payroll and benefits 5,788,400 5,460,000
Depreciation and amortization 963,700 868,600
Other operating expenses 3,067,000 3,014,000
General and administrative expenses 1,256,200 1,203,700
Franchise fees 607,700 590,200
Loss on store closings 25,000 --
Loss from disposition of equipment 34,800 83,500
------------- ------------
19,629,500 18,891,000
------------- ------------
Earnings from operations 660,000 803,400
Interest and other income 192,500 239,900
Interest expense (811,200) (808,400)
------------- ------------
Earnings (loss) before income taxes 41,300 234,900
Provision for income taxes -- 46,900
------------- ------------
Net earnings (loss) $41,300 $188,000
============= ============
Basic earnings (loss) per share $0.02 $0.08
============= ============
Diluted earnings (loss) per share $0.02 $0.08
============= ===========
See accompanying notes to consolidated financial statements.
</TABLE>
Family Steak Houses of Florida, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
June 30, December 30,
<CAPTION> 1999 1998
-------------- ---------------
<C> <C>
<S>
ASSETS
Current assets:
Cash and cash equivalents $2,897,500 $1,910,200
Investments 1,005,700 644,000
Receivables 112,300 107,000
Current portion of mortgages receivable 74,400 71,100
Income taxes receivable 60,200 60,200
Inventories 263,700 333,400
Prepaid and other current assets 291,600 296,600
-------------- ---------------
Total current assets 4,705,400 3,422,500
Mortgages receivable 199,600 237,600
Property and equipment:
Land 8,326,900 8,882,100
Buildings and improvements 21,783,500 21,236,600
Equipment 12,220,000 12,528,600
-------------- ---------------
42,330,400 42,647,300
Accumulated depreciation (15,790,600) (16,509,400)
-------------- ---------------
Net property and equipment 26,539,800 26,137,900
Property held for sale 2,360,900 1,463,400
Other assets, principally deferred charges,
net of accumulated amortization 847,900 830,700
-------------- ---------------
$34,653,600 $32,092,100
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,428,300 $1,381,000
Accrued liabilities 2,489,300 2,412,000
Current portion of long-term debt 442,000 370,500
Current portion of obligation under capital lease 3,300 3,100
-------------- ---------------
Total current liabilities 4,362,900 4,166,600
Long-term debt 18,888,400 16,574,300
Obligation under capital lease 1,051,000 1,052,700
Deferred revenue 19,300 23,200
-------------- ---------------
Total liabilities 24,321,600 21,816,800
Shareholders' equity:
Preferred stock of $.01 par;
authorized 10,000,000 shares;
none issued -- --
Common stock of $.01 par;
authorized 4,000,000 shares; outstanding
2,409,000 in 1999 and 2,371,600
shares in 1998 24,100 23,700
Additional paid-in capital 8,609,700 8,594,700
Retained earnings 1,698,200 1,656,900
-------------- ---------------
Total shareholders' equity 10,332,000 10,275,300
-------------- ---------------
$34,653,600 $32,092,100
============== ===============
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 Ended
--------------------------
June 30, July 1,
1999 1998
------------ -------------
<C> <C>
<S>
Operating activities:
Net earnings $41,300 $188,000
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation and amortization 963,700 868,600
Directors' fees in the form of
stock options 7,500 7,500
Amortization of loan fees 13,700 11,900
Loss on disposition of equipment 34,800 83,500
Decrease (increase) in:
Receivables (5,300) 24,500
Income taxes receivable -- 297,900
Inventories 69,700 16,000
Prepaids and other
current assets 5,000 17,600
Other assets (37,300) (101,900)
Increase (decrease) in:
Accounts payable 47,300 590,400
Accrued liabilities 77,300 (95,700)
Income taxes payable -- 54,200
Deferred revenue (3,900) (3,300)
------------ -------------
Net cash provided by operating activities 1,213,800 1,959,200
------------ -------------
Investing activities:
Proceeds from notes receivable 34,700 91,700
Net purchases of investments (361,700) (43,700)
Proceeds from sale of property
held for sale -- 13,200
Capital expenditures (2,291,500) (2,342,900)
------------ -------------
Net cash used by investing activities (2,618,500) (2,281,700)
------------ -------------
Financing activities:
Payments on long-term debt (214,400) (181,500)
Proceeds from issuance of long-term debt 2,600,000 1,290,000
Payments on capital lease (1,500) (1,200)
Proceeds from the issuance of common stock 7,900 315,900
------------ -------------
Net cash provided by financing activities 2,392,000 1,423,200
------------ -------------
Net increase in cash and cash equivalents 987,300 1,100,700
Cash and cash equivalents - beginning of period 1,910,200 696,000
------------ -------------
Cash and cash equivalents - end of period $2,897,500 $1,796,700
============ =============
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $841,700 $915,800
============ ============
Cash paid during the period for income taxes $0 $0
============ ============
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the Company's 1999 Form 10-Q for the Quarter ended June 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1999
<PERIOD-END> JUN-30-1999
<CASH> 2897500
<SECURITIES> 1005700<F1>
<RECEIVABLES> 112300
<ALLOWANCES> 0
<INVENTORY> 263700
<CURRENT-ASSETS> 4705400
<PP&E> 42330400
<DEPRECIATION> 15790600
<TOTAL-ASSETS> 34653600
<CURRENT-LIABILITIES> 4362900
<BONDS> 18888400
0
0
<COMMON> 24100
<OTHER-SE> 10307900
<TOTAL-LIABILITY-AND-EQUITY> 34653600
<SALES> 10143100
<TOTAL-REVENUES> 10143100
<CGS> 3944500
<TOTAL-COSTS> 10000800
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 428800
<INCOME-PRETAX> (192500)
<INCOME-TAX> 0
<INCOME-CONTINUING> (192500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (192500)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
<FN>
<F1>Represents investments in certificates of deposits with maturities of less than
one year.
</FN>
</TABLE>
