<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-KA
CURRENT REPORT
----------
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 21, 1997
EATERIES, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C> <C>
Oklahoma 0-14968 73-1230348
(State or other jurisdiction of (Commission file number) (IRS Employer
incorporation) Identification Number)
</TABLE>
3240 W. Britton Road, Suite 202
Oklahoma City, Oklahoma 73120
(Address of principal executive offices, including zip code)
(405) 755-3607
(Registrant's telephone number including area code)
<PAGE> 2
This Amendment No. 1 supplements the Current Report on Form 8-K filed on
December 8, 1997 (the "Form 8-K") by Eateries, Inc. ("Eateries"). At the time of
filing the Form 8-K, it was impracticable for Eateries to provide the financial
statements of the business acquired and pro forma financial information required
by Item 7 (a) and (b).
Item 2. Acquisition or Disposition of Assets.
On November 21, 1997, Eateries, through its wholly-owned subsidiary,
Fiesta Restaurants, Inc., completed the acquisition from Famous Restaurants,
Inc. and its subsidiaries of substantially all of the assets comprising 17
Garcia's Mexican Restaurants, Casa Lupita Restaurants and Carlos Murphy's
Restaurants located throughout the continental United States. The purchase price
for the assets was approximately $10,150,188 of which $8,631,415 was paid in
cash at closing and the balance represented estimated liabilities of the Sellers
assumed by Eateries. This purchase price was determined through negotiations
between the parties. Substantially all of the cash portion of the purchase price
was funded by a loan to Eateries from NationsBank in Oklahoma City, Oklahoma.
Neither Eateries nor any of its affiliates, officers or directors is affiliated
with any of the sellers. Eateries intends to continue to use the acquired assets
in the same business in which they were used prior to the acquisition.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
1. Statement of assets acquired and liabilities
assumed of the restaurants included in the Asset
Purchase Agreement among Fiesta Restaurants,
Inc., a wholly-owned subsidiary of Eateries,
Inc., and Famous Restaurants, Inc. as of November
13, 1997 together with report of independent
public accountants
2. Statements of revenues and direct operating
expenses of the restaurants included in the Asset
Purchase Agreement among Fiesta Restaurants,
Inc., a wholly-owned subsidiary of Eateries,
Inc. and Famous Restaurants, Inc. for each of
the three fiscal years in the period ended
December 29, 1996, together with report of
independent public accountants and for the forty
weeks ended October 6, 1996, and October 5, 1997
(unaudited)
(b) Pro forma financial information.
Included in this Report are the following pro forma
financial statements of Eateries, Inc.:
1. Pro forma condensed balance sheet at September
28, 1997 (unaudited)
2. Pro forma condensed statement of income for the
year ended December 29, 1996 (unaudited)
<PAGE> 3
3. Pro forma condensed statement of income for the
thirty-nine weeks ended September 28, 1997
(unaudited)
4. Notes to pro forma condensed financial statements
(unaudited)
(c) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
2.1 Asset Purchase Agreement dated as of November 14, 1997 (1)
23.1 Consent of Arthur Andersen LLP
</TABLE>
(1) Filed as exhibit to Registrant's Current Report on Form 8-K dated December
8, 1997.
<PAGE> 4
ITEM 7(A) 1.
FIESTA RESTAURANTS, INC.
STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED OF
THE RESTAURANTS INCLUDED IN THE ASSET PURCHASE
AGREEMENT AMONG FIESTA RESTAURANTS, INC., A
WHOLLY-OWNED SUBSIDIARY OF EATERIES, INC., AND FAMOUS
RESTAURANTS, INC. AS OF NOVEMBER 14, 1997 TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 5
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Eateries, Inc.:
We have audited the accompanying statement of assets acquired and liabilities
assumed of the restaurants included in the Asset Purchase Agreement among
Fiesta Restaurants, Inc., a wholly-owned subsidiary of Eateries, Inc., and
Famous Restaurants, Inc. as of November 14, 1997. This statement is the
responsibility of Eateries, Inc.'s management. Our responsibility is to express
an opinion on this statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the statement. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the statement referred to above presents fairly, in all material
respects, the assets acquired and liabilities assumed included in the Asset
Purchase Agreement among Fiesta Restaurants, Inc., a wholly-owned subsidiary of
Eateries, Inc., and Famous Restaurants, Inc. as of November 14, 1997, in
conformity with generally accepted accounting principles.
Oklahoma City, Oklahoma,
February 5, 1998
<PAGE> 6
STATEMENT OF ASSETS ACQUIRED
AND LIABILITIES ASSUMED OF
THE RESTAURANTS INCLUDED IN THE ASSET
PURCHASE AGREEMENT AMONG FIESTA RESTAURANTS, INC.,
A WHOLLY-OWNED SUBSIDIARY OF EATERIES, INC., AND
FAMOUS RESTAURANTS, INC.
AS OF NOVEMBER 14, 1997
<TABLE>
<S> <C>
ASSETS ACQUIRED:
Current assets:
Cash and cash equivalents $ 41,900
Receivables -
Inventories 942,340
Other current assets 158,016
------------
Total current assets 1,142,256
------------
Property and equipment:
Land and buildings 3,579,000
Furniture and equipment 1,055,000
Leasehold improvements 375,000
------------
Total property and equipment 5,009,000
Goodwill 3,958,434
Other noncurrent assets 390,000
------------
Total noncurrent assets 9,357,434
------------
Total assets to be acquired 10,499,690
------------
LIABILITIES ASSUMED:
Current liabilities:
Accounts payable 498,595
Accrued liabilities-
Compensation 515,025
Taxes, other than income 170,470
Other 334,683
------------
Total current liabilities 1,518,773
Noncurrent liabilities -
------------
Total liabilities 1,518,773
------------
Net assets acquired $ 8,980,917
============
</TABLE>
The accompanying note is an integral part of this statement
<PAGE> 7
NOTE TO STATEMENT OF ASSETS ACQUIRED AND
LIABILITIES ASSUMED OF THE RESTAURANTS
INCLUDED IN THE ASSET PURCHASE AGREEMENT
AMONG FIESTA RESTAURANTS, INC., A WHOLLY-OWNED
SUBSIDIARY OF EATERIES, INC., AND FAMOUS RESTAURANTS, INC.
1. Basis of Presentation
The accompanying statement presents the assets acquired and
liabilities assumed by Fiesta Restaurants, Inc. ("Fiesta"),
a wholly-owned subsidiary of Eateries, Inc. ("Eateries"),
from Famous Restaurants Inc. ("Famous"), under the Asset
Purchase Agreement (the "Agreement") dated November 14,
1997. Under the Agreement, Fiesta acquired seventeen
restaurants operating under the names Garcia's Mexican
Restaurants (10), Casa Lupita Restaurants (5), and Carlos
Murphy's (2). Additionally, Fiesta acquired substantially
all of the assets and assumed certain liabilities related to
the Famous corporate headquarters. The total purchase price
for the assets was approximately $10,500,000, including
transaction costs. The transaction has been accounted for as
a purchase business combination and as such, all assets and
liabilities have been valued at current market value based
upon estimates by the management of Eateries or appraisals
obtained in connection with the transaction. The
accompanying statement reflects the allocation of purchase
price as of November 14, 1997.
<PAGE> 8
ITEM 7(A) 2.
FAMOUS RESTAURANTS, INC.
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES OF THE
RESTAURANTS INCLUDED IN THE ASSET PURCHASE AGREEMENT AMONG
FIESTA RESTAURANTS, INC., A WHOLLY-OWNED SUBSIDIARY OF EATERIES,
INC., AND FAMOUS RESTAURANTS, INC. FOR EACH OF THE THREE FISCAL
YEARS IN THE PERIOD ENDED DECEMBER 29, 1996 TOGETHER WITH REPORT
OF INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE> 9
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Eateries, Inc.:
We have audited the accompanying statements of revenues and direct operating
expenses of the restaurants included in the Asset Purchase Agreement among
Fiesta Restaurants, Inc., a wholly-owned subsidiary of Eateries, Inc., and
Famous Restaurants, Inc. (the "Restaurants") for each of the three fiscal years
in the period ended December 29, 1996. These statements are the responsibility
of Famous Restaurants, Inc.'s management. Our responsibility is to express an
opinion on these statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statements of revenues and direct
operating expenses are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statements of revenues and direct operating expenses. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
The accompanying statements of revenues and direct operating expenses were
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and, as described in Note 1, exclude
amortization of goodwill, interest, income tax expenses, and certain corporate
overhead expenses as these expenses would not be comparable to those resulting
from the proposed future operations of the Restaurants.
In our opinion, the statements of revenues and direct operating expenses
referred to above present fairly, in all material respects, the revenues and
direct operating expenses of the Restaurants for each of the three fiscal years
in the period ended December 29, 1996.
Oklahoma City, Oklahoma,
October 31, 1997
<PAGE> 10
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES OF THE
RESTAURANTS INCLUDED IN THE ASSET PURCHASE AGREEMENT AMONG
FIESTA RESTAURANTS, INC., A WHOLLY-OWNED SUBSIDIARY OF
EATERIES, INC., AND FAMOUS RESTAURANTS, INC.
<TABLE>
<CAPTION>
For the Fiscal Years Ended For the Forty Weeks Ended
---------------------------------------------- ---------------------------------
January 1, December 31, December 29, October 5, October 6,
1995 1995 1996 1997 1996
------------ ------------ ------------ ------------- -------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Food and beverage sales $ 30,239,763 $ 30,317,866 $ 32,099,178 $ 25,464,164 $ 24,851,921
Other 67,398 60,497 68,230 64,633 59,198
------------ ------------ ------------ ------------- -------------
Total revenues 30,307,161 30,378,363 32,167,408 25,528,797 24,911,119
------------ ------------ ------------ ------------- -------------
Direct operating expenses:
Cost of sales 8,044,160 8,087,490 8,578,169 6,609,186 6,684,405
Operating expenses 18,878,497 19,445,684 20,412,382 16,034,888 15,753,378
Depreciation and amortization
892,425 906,830 832,884 636,723 653,337
Corporate overhead 2,126,842 2,140,986 1,784,418 1,317,993 1,412,280
------------ ------------ ------------ ------------- -------------
Total direct operating
expenses 29,941,924 30,580,990 31,607,853 24,598,790 24,503,400
------------ ------------ ------------ ------------- -------------
Revenues in excess of direct
operating expenses $ 365,237 $ (202,627) $ 559,555 $ 930,007 $ 407,719
============ ============ ============ ============= =============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE> 11
NOTES TO STATEMENTS OF REVENUES AND
DIRECT OPERATING EXPENSES OF THE RESTAURANTS
INCLUDED IN THE ASSET PURCHASE AGREEMENT AMONG
FIESTA RESTAURANTS, INC., A WHOLLY-OWNED SUBSIDIARY OF
EATERIES, INC., AND FAMOUS RESTAURANTS, INC.
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES:
Basis of Presentation
The accompanying statements present revenues and direct operating expenses of
seventeen restaurants located throughout the United States, which operate under
the names Garcia's Mexican Restaurants (10), Casa Lupita Restaurants (5), and
Carlos Murphy's restaurants (2), that are included in the Asset Purchase
Agreement among Fiesta Restaurants, Inc. ("Fiesta"), a wholly-owned subsidiary
of Eateries, Inc. ("Eateries") , and Famous Restaurants, Inc. (Collectively
"the restaurants").
The accompanying statements of revenues and direct operating expenses were
prepared on the accrual basis of accounting and relate only to the Restaurants
described above. These historical results may not be indicative of future
operations. The statements were prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
a Form 8-K of Eateries in connection with its acquisition of the Restaurants.
The statements do not include amortization of goodwill, interest, Federal and
state income taxes and certain corporate overhead expenses because such amounts
would not be indicative of those expenses which will be incurred by Eateries.
The unaudited statements of revenues and direct operating expenses for the forty
weeks ended October 5, 1997 and October 6, 1996, in the opinion of management,
were prepared on a basis consistent with the audited statements of revenues and
direct operating expenses of the Restaurants for each of the three fiscal years
in the period ended December 29, 1996, and include all adjustments, consisting
only of normal recurring accruals, necessary to present fairly the revenues and
direct operating expenses for the indicated periods.
Fiscal Year
The accompanying statements of revenues and direct operating expenses were
prepared using a 52/53 week fiscal year. Each of the fiscal years presented
include activity for 52 weeks.
Revenues
Revenues from the Restaurants are recognized at the time such services are
rendered and primarily include charges for food, beverage and related
promotional items.
Cost of Sales
Cost of sales consists primarily of food, beverages and bar supplies.
Inventories are valued at the lower of cost, on a first-in, first-out basis, or
market.
<PAGE> 12
Advertising Costs
Costs incurred in connection with advertising and marketing of the Restaurants
are expensed as incurred. Such costs amounted to $843,288, $978,991 and
$1,229,035 in the fiscal years ended January 1,1995, December 31, 1995 and
December 29, 1996, respectively.
Pre-opening Costs
The costs related to the opening of restaurant locations are expensed when
incurred.
Real Estate Leases
Certain of the Restaurants' long-term noncancellable operating leases for
restaurant facilities include scheduled base rental increases over the term of
the lease. The total amount of the base rental payments is charged to expense on
the straight-line method over the term of the lease.
Depreciation and Amortization
Property and equipment are stated at cost and are depreciated and amortized over
the lesser of the estimated useful lives of the assets or the remaining term of
any related leases, such as a land lease, using the straight-line method.
Estimated useful lives are as follows:
<TABLE>
<S> <C>
Buildings 12 - 20 years
Furniture and equipment 4 - 20 years
Leasehold improvements 10 years
</TABLE>
Corporate Overhead
Corporate overhead consists of expenses related to corporate officer and
employee payroll and related benefits, training, occupancy, and management
information systems. In each fiscal year, these costs were allocated to the
Restaurants based on the number of restaurants in the corporate group. Corporate
overhead excluded from the allocation were costs associated with the development
and promotion of new concepts unrelated to the Restaurants and specifically
identifiable costs related to the shutdown or disposition of other units.
Use of Estimates
The preparation of the statements of revenues and direct operating expenses in
conformity with generally accepted accounting principles requires Famous
Restaurants, Inc. management to make estimates and assumptions that affect the
reported amounts of revenues and direct operating expenses during the reporting
periods. Actual results could differ from those estimates as additional
information becomes available.
<PAGE> 13
2. REAL ESTATE LEASES:
The majority of the Restaurants' facilities are leased under operating leases
with initial terms expiring at various dates through the year 2010. Certain
leases contain renewal options ranging from 5 to 25 years. Most, but not all,
leases require the lessee to be responsible for the payment of taxes, insurance
and/or maintenance and include percentage rent and/or fixed rent escalation
clauses. In the normal course of business, the lessee may grant a landlord lien
on certain personal property upon an event of default by the lessee. At December
29, 1996, the remaining minimum rental commitments under long-term
noncancellable leases, excluding amounts related to taxes, insurance,
maintenance and percentage rent, are as follows:
<TABLE>
<S> <C>
1997 $ 1,775,159
1998 1,795,053
1999 1,682,928
2000 1,654,872
2001 1,486,984
Thereafter 6,649,603
-------------
Total minimum rental commitments $ 15,044,599
=============
</TABLE>
Total rental expense for noncancellable operating leases is summarized as
follows:
<TABLE>
<CAPTION>
For the Fiscal Years Ended
----------------------------------------------
January 1, December 31, December 29,
1995 1995 1996
------------ ------------ ------------
<S> <C> <C> <C>
Minimum rents $ 1,746,054 $ 1,759,670 $ 1,790,797
Percentage rents 40,000 48,999 35,238
------------ ------------ ------------
$ 1,786,054 $ 1,808,669 $ 1,826,035
============ ============ ============
</TABLE>
<PAGE> 14
Item 7 (b)
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information relates to the
November 14, 1997 acquisition of substantially all of the assets of Famous
Restaurants, Inc. ("Famous") and the assumption of specified liabilities of
Famous. The transaction will be accounted for as a purchase business
combination. The pro forma amounts have been prepared based on certain purchase
accounting and other pro forma adjustments (as described in the accompanying
notes) to the historical financial statements of the Eateries, Inc. ("Eateries")
and Famous.
The unaudited pro forma condensed balance sheet at September 28, 1997,
reflects the historical financial position of Eateries at September 28, 1997,
combined with the allocated purchase price of the Famous assets as of November
14, 1997, with pro forma adjustments as if the acquisition had occurred on
September 28, 1997. The unaudited pro forma condensed statement of income for
the fiscal year ended December 29, 1996, reflects the historical results of
operations of both companies with pro forma acquisition adjustments as if the
acquisition had occurred on January 1, 1996. The unaudited pro forma condensed
statement of income for the thirty-nine weeks ended September 28, 1997, reflects
the historical results of Eateries for the same period and the historical
results of Famous for the forty weeks ended October 5, 1997, with pro forma
acquisition adjustments as if the acquisition had occurred on December 30, 1996.
The pro forma adjustments are described in the accompanying notes and give
effect to events that are (a) directly attributable to the acquisition, (b)
factually supportable, and (c) in the case of certain statement of income
adjustments, expected to have a continuing impact.
The unaudited pro forma condensed financial statements should be read
in connection with Eateries' and Famous's historical financial statements and
related footnotes.
The unaudited pro forma financial information presented is for
information purposes only and does not purport to represent what Eateries' and
Famous's financial position or results of operations as of the dates presented
would have been had the acquisition in fact occurred on such date or at the
beginning of the period indicated or to project Eateries' and Famous's financial
position or results of operations for any future date or period.
<PAGE> 15
Item 7 (b) 1.
EATERIES, INC.
PRO FORMA CONDENSED BALANCE SHEET
AS OF SEPTEMBER 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma Effects of
-----------------------------
Allocation of
Purchase Price
to Assets Acquired
Eateries, Inc. and Liabilities Acquisition
Historical Assumed Financing Pro Forma
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 773,759 $ 41,900 $ -- $ 815,659
Receivables 938,879 -- -- 938,879
Deferred income taxes 683,000 -- -- 683,000
Inventories 1,381,180 942,340 -- 2,323,520
Other 330,335 158,016 -- 488,351
------------ ------------ ------------ ------------
Total current assets 4,107,153 1,142,256 -- 5,249,409
------------ ------------ ------------ ------------
Property and equipment, at cost 34,713,114 5,009,000 -- 39,722,114
Landlord finish-out allowances (14,308,064) -- -- (14,308,064)
Accumulated depreciation and amortization (6,658,594) -- -- (6,658,594)
------------ ------------ ------------ ------------
Net property and equipment 13,746,456 5,009,000 -- 18,755,456
------------ ------------ ------------ ------------
Deferred income taxes 518,000 -- -- 518,000
Other assets, net 717,081 4,348,434 -- 5,065,515
------------ ------------ ------------ ------------
Total assets $ 19,088,690 $ 10,499,690 $ -- $ 29,588,380
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $ 2,610,959 $ 498,595 $ -- $ 3,109,554
Accrued liabilities 2,381,525 1,020,178 -- 3,401,703
Current portion of long-term obligations 28,093 -- 1,155,000 1,183,093
------------ ------------ ------------ ------------
Total current liabilities 5,020,577 1,518,773 1,155,000 7,694,350
Other noncurrent liabilities 730,420 -- -- 730,420
Long-term obligations, net of current portion 3,315,000 -- 7,825,917 11,140,917
------------ ------------ ------------ ------------
Total liabilities 9,065,997 1,518,773 8,980,917 19,565,687
------------ ------------ ------------ ------------
Stockholders' equity:
Preferred stock -- -- -- --
Common stock 8,411 -- -- 8,411
Additional paid-in capital 9,437,653 -- -- 9,437,653
Retained earnings 2,143,912 -- -- 2,143,912
------------ ------------ ------------ ------------
11,589,976 -- -- 11,589,976
Treasury stock (1,567,283) -- -- (1,567,283)
------------ ------------ ------------ ------------
Total stockholders' equity 10,022,693 -- -- 10,022,693
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity $ 19,088,690 $ 1,518,773 $ 8,980,917 $ 29,588,380
============ ============ ============ ============
</TABLE>
<PAGE> 16
Item 7 (b) 2.
EATERIES, INC.
PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 29, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Famous
Eateries, Inc. Restaurants, Inc. Pro Forma
Historical Historical Adjustments Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Food and beverage sales $55,732,807 $32,099,178 $ -- $87,831,985
Franchise fees and royalties 264,954 -- -- 264,954
Other 418,476 68,230 -- 486,706
----------- ----------- ----------- -----------
Total revenues 56,416,237 32,167,408 -- 88,583,645
Cost of sales 17,070,384 8,578,169 -- 25,648,553
----------- ----------- ----------- -----------
Gross profit 39,345,853 23,589,239 -- 62,935,092
----------- ----------- ----------- -----------
Operating expenses 32,218,754 20,412,382 -- 52,631,136
Pre-opening costs 726,000 -- -- 726,000
General and administrative expenses 3,665,207 1,784,418 -- 5,449,625
Depreciation and amortization 1,886,323 832,884 (463,551) (a) 2,519,552
263,896 (b)
Interest expense 194,070 -- 690,000 (c) 884,070
----------- ----------- ----------- -----------
Total expenses 38,690,354 23,029,684 490,345 62,210,383
----------- ----------- ----------- -----------
Income before provision for income taxes 655,499 559,555 (490,345) 724,709
Provision for income taxes 74,000 -- (40,000) (d) 34,000
Net income $ 581,499 $ 559,555 $ (450,345) $ 690,709
=========== =========== =========== ===========
Weighted average common and
common equivalent shares 3,987,661 3,987,661
=========== ===========
Net income per share $ 0.15 $ 0.17
============ ===========
</TABLE>
<PAGE> 17
Item 7 (b) 3.
EATERIES, INC.
PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Famous
Eateries, Inc. Restaurants, Inc. Pro Forma
Historical Historical Adjustments Pro Forma
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Food and beverage sales $42,136,103 $24,851,921 $ -- $66,988,024
Franchise fees and royalties 198,703 -- -- 198,703
Other 312,775 59,198 -- 371,973
----------- ----------- ----------- -----------
Total revenues 42,647,581 24,911,119 -- 67,558,700
Cost of sales 11,989,724 6,684,405 -- 18,674,129
----------- ----------- ----------- -----------
Gross profit 30,657,857 18,226,714 -- 48,884,571
----------- ----------- ----------- -----------
Operating expenses 24,951,860 15,753,378 -- 40,705,238
Pre-opening costs 266,000 -- -- 266,000
General and administrative expenses 2,927,616 1,412,280 -- 4,339,896
Depreciation and amortization 1,652,646 653,337 (359,723) (a) 2,144,182
197,922 (b)
Interest expense 183,915 -- 517,500 (c) 701,415
----------- ----------- ----------- -----------
Total expenses 29,982,037 17,818,995 355,699 48,156,731
----------- ----------- ----------- -----------
Income before provision for income taxes 675,820 407,719 (355,699) 727,840
Provision for income taxes 198,000 -- (99,000) (d) 99,000
----------- ----------- ----------- -----------
Net income $ 477,820 $ 407,719 $ (256,699) $ 628,840
=========== =========== =========== ===========
Weighted average common and
common equivalent shares 4,019,128 4,019,128
=========== ===========
Net income per share $ 0.12 $ 0.16
=========== ===========
</TABLE>
<PAGE> 18
Item 7 (b) 4.
EATERIES, INC.
NOTES TO PRO FORMA
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
a) To adjust Famous's historical depreciation and amortization expense
related to buildings, furniture, equipment and leasehold improvements for
the decreased basis in these assets. Depreciable lives for the assets
acquired are as follows:
<TABLE>
<S> <C>
Buildings 30 years
Furniture and equipment 5 years
Leasehold improvements 5 years
</TABLE>
b) To record the increase in goodwill amortization due to the goodwill
created from the Famous acquisition. Goodwill is amortized over 15 years.
c) To record interest expense on the acquisition debt.
d) To adjust the provision for income taxes for the effect of the preceding
pro forma adjustments and Famous historical operations, including the
favorable impact of increased general business tax credits.
Item 7 (c)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the inclusion of our
reports dated October 31, 1997 and February 5, 1998, included in this Amendment
No. 1 to Form 8-K.
Oklahoma City, Oklahoma Arthur Andersen LLP
February 6, 1998
<PAGE> 19
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.
EATERIES, INC.
(Registrant)
By: /S/ Corey Gable
---------------------------------------------
Corey Gable
Vice President Treasurer
Chief Financial and Accounting Officer
Dated: February 6, 1998
