<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934
For the quarterly period ended March 26, 1995 or
- ----- Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 33-14051
Family Restaurants, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-0197361
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
18831 Von Karman Avenue, Irvine, California 92715
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 757-7900
------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
------- -------
Number of shares of outstanding common stock as of May 9, 1995 is 990,308.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
FAMILY RESTAURANTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except per share)
<TABLE>
<CAPTION>
March 26, December 25,
1995 1994
------------ -------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,440 $ 8,239
Restricted cash 0 1,850
Receivables 15,201 11,831
Inventories 11,483 12,916
Other current assets 7,458 8,179
-------- --------
Total current assets 43,582 43,015
Property and equipment, net 452,031 445,354
Reorganization value in excess of amounts
allocable to identifiable assets, net 195,792 197,581
Other assets 45,673 48,648
-------- --------
$737,078 $734,598
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt, including
capitalized lease obligations $ 7,270 $ 6,754
Accounts payable 43,726 41,999
Self-insurance reserves 51,572 50,692
Other accrued liabilities 82,059 96,426
Income taxes payable 3,121 2,625
-------- --------
Total current liabilities 187,748 198,496
Other long-term liabilities 6,876 6,866
Long-term debt, including capitalized lease
obligations, less current portion 567,123 536,495
Stockholders' deficit:
Common stock - authorized 1,500,000 shares, par
value $.01 per share, 997,277 shares issued 10 10
Additional paid-in capital 159,554 159,554
Notes receivable from stockholders (2,918) (2,947)
Accumulated deficit (181,315) (163,876)
-------- --------
Total stockholders' deficit (24,669) (7,259)
-------- --------
$737,078 $734,598
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
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FAMILY RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
(Unaudited)
<TABLE>
<CAPTION>
Predecessor
Successor Company Company
------------------------------ -----------
Quarter Two Months One Month
Ended Ended Ended
March 26, March 27, January 26,
1995 1994 1994
--------- ---------- -----------
<S> <C> <C> <C>
Sales $281,133 $189,580 $ 64,741
-------- -------- --------
Product cost 79,410 52,986 19,184
Payroll and related costs 105,775 68,385 24,780
Occupancy and other operating expenses 68,508 43,506 13,712
Depreciation and amortization 13,840 8,423 2,800
General and administrative expenses 15,418 9,045 4,071
Loss (gain) on disposition of properties, net 221 0 (12)
-------- -------- --------
Total costs and expenses 283,172 182,345 64,535
-------- -------- --------
Operating income (loss) (2,039) 7,235 206
Interest expense, net 14,913 9,878 4,097
-------- -------- --------
Loss before reorganization items, income
tax provision and extraordinary item (16,952) (2,643) (3,891)
-------- -------- --------
Reorganization items:
Professional fees 0 0 (4,250)
Payment to Grace 0 0 (15,000)
Other 0 0 (3,029)
Fresh start adjustment 0 0 501,706
-------- -------- --------
Total reorganization items 0 0 479,427
-------- -------- --------
Income (loss) before income tax provision
and extraordinary item (16,952) (2,643) 475,536
Income tax provision 487 594 55
-------- -------- --------
Income (loss) before extraordinary item (17,439) (3,237) 475,481
Extraordinary gain on extinguishment of debt 0 0 72,561
-------- -------- --------
Net income (loss) (17,439) (3,237) 548,042
Preferred dividends 0 0 (1,698)
-------- -------- --------
Net income (loss) attributable to common shares $(17,439) $ (3,237) $546,344
======== ======== ========
Net loss per common share $ (17.49) $ (3.32)
======== ========
Weighted average common shares outstanding 997,277 974,725
======== ========
</TABLE>
Net loss per common share for the Predecessor Company is not meaningful due to
debt discharge, the issuance of new common stock and fresh start reporting.
See accompanying notes to condensed consolidated financial statements
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<PAGE> 4
FAMILY RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Predecessor
Successor Company Company
---------------------------- -----------
Quarter Two Months One Month
Ended Ended Ended
March 26, March 27, January 26,
1995 1994 1994
--------- ---------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Cash received from customers, franchisees
and licensees $279,573 $187,545 $ 65,341
Cash paid to suppliers and employees (274,869) (186,654) (59,729)
Interest paid, net (17,850) (1,534) (741)
Income taxes received (paid) 9 (853) 157
Charges to reserve for divestitures 0 (2,110) (1,001)
-------- -------- --------
Net cash provided by (used in) operating
activities before reorganization items (13,137) (3,606) 4,027
-------- -------- --------
Reorganization items:
Professional fees 0 0 (4,250)
Payment to Grace 0 0 (15,000)
Other 0 0 (3,029)
-------- -------- --------
Total reorganization items 0 0 (22,279)
-------- -------- --------
Net cash used in operating activities (13,137) (3,606) (18,252)
-------- -------- --------
Cash flows from investing activities:
Proceeds from disposal of property and equipment 1,636 1,210 1,588
Acquisition of Chi-Chi's 0 0 (194,889)
Capital expenditures (16,620) (6,197) (779)
Capitalized opening costs (594) (176) (21)
Other 552 612 1,491
-------- -------- --------
Net cash used in investing activities (15,026) (4,551) (192,610)
-------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of Notes 0 0 409,046
Proceeds from working capital borrowings, net 28,900 0 0
Payment of notes payable to Marriott, net 0 0 (10,969)
Payment of loan payable to Grace 0 0 (2,900)
Payment of debt issuance costs 0 0 (22,973)
Reductions of long-term debt, including
capitalized lease obligations (1,415) (950) (447)
Cash settlement of liabilities subject to
settlement under reorganization proceedings 0 0 (279,055)
Decrease in restricted cash and collateral
deposit 1,850 0 38,688
Proceeds from issuance of common stock, net 0 0 92,364
Payments of notes receivable from stockholders 29 0 0
-------- -------- --------
Net cash provided by (used in) financing
activities 29,364 (950) 223,754
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents 1,201 (9,107) 12,892
Cash and cash equivalents at beginning of period 8,239 22,202 9,310
-------- -------- --------
Cash and cash equivalents at end of period $ 9,440 $13,095 $ 22,202
======== ======= ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
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FAMILY RESTAURANTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
($ in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Predecessor
Successor Company Company
---------------------------- -----------
Quarter Two Months One Month
Ended Ended Ended
March 26, March 27, January 26,
1995 1994 1994
--------- --------- -----------
<S> <C> <C> <C>
Reconciliation of net income (loss) to net
cash provided by operating activities net
of effects of Chi-Chi's acquisition:
Net income (loss) $ (17,439) $ (3,237) $ 548,042
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 13,840 8,423 2,800
Amortization of debt issuance costs 824 507 215
Loss (gain) on disposition of properties 221 0 (12)
Fresh start adjustment 0 0 (501,706)
Extraordinary gain on extinguishment of debt 0 0 (72,561)
Accretion of interest on Discount Notes 3,210 2,183 0
Accrued interest on liabilities settled
under bankruptcy proceedings 0 0 3,113
Decrease (increase) in receivables,
inventories and other current assets (1,974) (1,685) 806
Increase (decrease) in accounts payable,
self-insurance reserves, other accrued
liabilities and income tax payable (11,819) (7,687) 2,052
Charges to the reserve for divestitures 0 (2,110) (1,001)
--------- -------- --------
Net cash used in operating activities $ (13,137) $ (3,606) $(18,252)
========= ======== ========
Supplemental schedule of 1994 investing activities:
The components of acquisition of Chi-Chi's
are as follows:
Current assets $ (8,316)
Property and equipment (155,293)
Goodwill (146,329)
Other assets (14,121)
Current liabilities 56,843
Other long-term liabilities 5,292
Long-term debt assumed 4,694
Issuance of common stock 62,341
----------
$ (194,889)
</TABLE> ==========
See accompanying notes to condensed
consolidated financial statements
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<PAGE> 6
FAMILY RESTAURANTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. COMPANY. Family Restaurants, Inc. (formerly The Restaurant
Enterprises Group, Inc.) was incorporated in Delaware in 1986 and is primarily
engaged in the operation of full-service restaurants throughout the United
States through its subsidiaries (Family Restaurants, Inc. together with its
subsidiaries shall hereinafter be referred to as the "Company"). At March 26,
1995, the Company operated 688 restaurants in 33 states, with approximately
53% of its restaurants located in California. The Company is the licensor of
232 full-service restaurants in Japan and South Korea, the franchisor of five
family restaurants and four Mexican restaurants in the United States and the
franchisor of 21 Mexican restaurants outside the United States.
Reference to the "Predecessor Company" refers to The Restaurant
Enterprises Group, Inc. and its consolidated subsidiaries (not including
Chi- Chi's) with respect to information relating to periods prior to
January 27, 1994 included herein, and reference to the "Successor Company"
refers to Family Restaurants, Inc. and its consolidated subsidiaries, giving
effect to the Acquisition (as defined below) and related transactions as
described below, with respect to information about events occurring upon
completion of or after the Acquisition.
2. FINANCIAL STATEMENTS. The Condensed Consolidated Financial
Statements in this Form 10-Q have been prepared in accordance with Securities
and Exchange Commission Regulation S-X. Reference is made to the Notes to the
Consolidated Financial Statements for the Year Ended December 25, 1994 included
in the Company's Annual Report on Form 10-K for information with respect to the
Company's significant accounting and financial reporting policies as well as
other pertinent information. The Company believes that all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the results of the interim periods presented have been made.
The results of operations of the Successor Company for the quarter ended March
26, 1995 are not necessarily indicative of those for the full year.
The Predecessor Company commenced a Chapter 11 bankruptcy case on
November 23, 1993, which was confirmed by the United States Bankruptcy Court
for the District of Delaware on January 7, 1994. The Predecessor Company
applied the provisions of the American Institute of Certified Public
Accountants Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code," in the consolidated financial
statements for the one month ended January 26, 1994.
The accumulated deficit of the Predecessor Company was eliminated as
required by fresh start reporting; additionally, the
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<PAGE> 7
statement of operations for the one month ended January 26, 1994 reflects the
effects of the forgiveness of debt resulting from confirmation of the plan of
reorganization and the effects of the adjustments to restate assets and
liabilities to reflect the reorganization value of the Successor Company. As
such, the condensed consolidated balance sheets of the Company as of March 26,
1995 and December 25, 1994 and the accompanying condensed consolidated
statements of operations for the quarter ended March 26, 1995 and the two
months ended March 27, 1994 represent that of the Successor Company which, in
effect, is a new entity with assets, liabilities and a capital structure having
carrying values not comparable with prior periods. The condensed consolidated
statement of operations for the one month ended January 26, 1994 represents
that of the Predecessor Company.
On January 27, 1994 (the "Closing Date"), Apollo FRI Partners, L.P.,
Green Equity Investors, L.P. and Foodmaker, Inc. ("Foodmaker") acquired
approximately 98% of the outstanding common stock of the Company (the
"Acquisition"). The Acquisition involved several components, including the
merger of Chi-Chi's with a subsidiary of the Company (the "Chi-Chi's Merger"),
and related transactions.
3. LOSS PER COMMON SHARE. Loss per common share for the Successor
Company is computed based on the weighted average number of shares actually
outstanding. The impact of the "Foodmaker Warrant," which allows Foodmaker to
acquire an additional 111,111 shares of common stock of the Company, and
options has not been included since the impact would be antidilutive.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
presented in the Company's Annual Report on Form 10-K.
As used herein, "comparable restaurants" means restaurants operated
by the Company on January 1, 1994, which continued in operation through the
end of the first quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES.
A. LIQUIDITY
The Company relies primarily on internally generated funds,
supplemented by working capital advances under a $150.0 million, five-year
fully revolving credit facility with a $100.0 million sublimit for standby
letters of credit (the "Credit Facility"), for its liquidity. Management
believes that funds available from these sources will be sufficient to meet
the Company's working capital, debt service and capital expenditure
requirements for the foreseeable future.
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<PAGE> 8
Operating Cash Flow. During the first quarter of 1995, the Company
reported EBITDA (defined as earnings (loss) before gain (loss) on disposition of
properties, interest, taxes, depreciation and amortization) of $12.0 million.
If Chi-Chi's had been included for the one month ended January 26, 1994, pro
forma combined EBITDA for the first quarter of 1994 would have been reported as
$20.3 million. The Company has included information concerning EBITDA herein
because it understands that such information is used by certain investors as
one measure of an issuer's historical ability to service debt. EBITDA should
not be considered as an alternative to, or more meaningful than, operating
income (loss) as an indicator of operating performance or to cash flows from
operating activities as a measure of liquidity.
Working Capital Deficiency. The Company can operate with a substantial
working capital deficiency because (i) restaurant operations are conducted
primarily on a cash (and cash equivalent) basis with a low level of accounts
receivable, (ii) rapid turnover allows a limited investment in inventories and
(iii) cash from sales is usually received before related accounts payable for
food, beverages and supplies become due. The Company had a working capital
deficiency of $144.2 million on March 26, 1995.
Credit Facility. On the Closing Date, the Company, FRI-M Corporation,
a wholly-owned subsidiary of the Company, and certain subsidiaries of FRI-M
Corporation entered into the Credit Facility. The entire outstanding balance
of $88.5 million at March 26, 1995 has been classified as long-term debt in the
accompanying condensed consolidated balance sheet since the borrowings are not
due for payment until January 27, 1999, and there are no current plans to pay
down the outstanding balance. Borrowings in the amount of $88.0 million were
outstanding under the Credit Facility as of May 9, 1995. Standby letters of
credit are issued primarily to provide security for future amounts payable by
the Company under its workers' compensation insurance program ($40.2 million of
such letters of credit were outstanding as of May 9, 1995).
B. CAPITAL EXPENDITURES
As noted in the Condensed Consolidated Statements of Cash Flows, net
cash used in investing activities was $15.0 million for the first quarter of
1995 versus $192.6 million for the one month ended January 26, 1994 and $4.6
million for the two months ended March 27, 1994. Included in investing
activities for 1994 is the acquisition of Chi-Chi's which represented $194.9
million and the conversion of certain Bob's Big Boy restaurants to the
Company's concepts which represented $1.2 million.
The Company embarked in 1994 on a comprehensive capital investment
program. The Company expected to spend an aggregate of approximately $100
million to $130 million of discretionary funds under
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<PAGE> 9
such capital investment program, in addition to the annual capital
expenditures of approximately $16 million to $19 million devoted to normal
maintenance of the Company's restaurants. Subsequent to the Acquisition, the
Company has remodeled 91 family restaurants and 76 Mexican restaurants at an
aggregate cost of approximately $30.1 million. Subject to changes in market
conditions, the Company currently plans on completing its capital reinvestment
program in the Family Restaurant Division (as defined below) by the end of
1996. In addition, the Company plans to add 15 to 20 new family restaurants in
1995. However, as a result of the continuing decline in Mexican Restaurant
Division (as defined below) sales, the Company has sharply curtailed its
remodel program for all restaurants for the remainder of 1995 and has no
current plans to open new Mexican restaurants.
RESULTS OF OPERATIONS.
As a result of the impact of the Acquisition on the Company's capital
structure, the Company's adoption of fresh start reporting and the acquisition
of Chi-Chi's, the results of operations for the first quarter of 1995 are not
comparable to those for the first quarter of 1994 which includes two months of
the Successor Company's operations and one month of the Predecessor Company's
operations. For certain key operating elements of the statement of operations,
however, the following analysis of a comparison of the Successor Company's
operations for the first quarter of 1995 to the operations (two months of the
Successor Company plus one month of the Predecessor Company) for the first
quarter of 1994 is provided. Because of the lack of comparability of results,
depreciation and amortization and interest expense, net are not discussed.
The Company's total sales for the first quarter of 1995 increased
10.5% ($26,812,000) as compared to total sales for the same period in 1994.
This increase was due to sales from Chi-Chi's restaurants for January 1995 for
which there were no comparable sales in 1994 due to the timing of the Chi-Chi's
Merger on January 27, 1994, sales for 32 restaurants previously identified for
divestment which are included in the Company's operating results for 1995 but
were not included in the Company's operating results in 1994, the impact of
additional sales of certain Bob's Big Boy restaurants converted to Coco's
and Carrows during 1994 and the additional sales of new restaurants opened
during 1994 and 1995. These sales increases were offset, in part, by
decreases related to restaurants divested or closed and a decrease in sales of
comparable restaurants for the first quarter. The breakdown of the increase
in sales for the first quarter of 1995 is set forth below:
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<TABLE>
First Quarter
1995 Sales
Increase
----------------
($ in thousands)
<S> <C>
Chi-Chi's Sales for January 1995 $ 28,891
Sales of Restaurants Previously
Identified for Divestment 10,861
Increase in Sales of New Restaurants (1) 3,037
Increase in Sales of Bob's Big Boy Restaurants (2) 1,952
Decrease in Sales of Restaurants Sold or Closed (6,946)
Decrease in Sales of Comparable Restaurants (10,983)
--------
Total $ 26,812
========
</TABLE>
- ---------------
(1) Reflects the Company's opening of nine new restaurants in 1994 and one
new restaurant in 1995. Sales of new Chi-Chi's restaurants are only
included for February and March 1995.
(2) Reflects increased sales for the Bob's Big Boy restaurants converted
to Coco's or Carrows in 1994.
Comparable restaurants as utilized in this calculation exclude
restaurants previously identified for divestment and Chi-Chi's operations for
January 1995. Sales for comparable restaurants decreased 4.7% ($10,983,000)
for the first quarter of 1995 as compared to the same period in 1994. This
comparable sales decrease reflects decreases in both the Family Restaurant
Division and the Mexican Restaurant Division. The comparable sales decrease
is due to an increasingly competitive operating environment for restaurants,
particularly effective promotional activities during the comparable period in
the prior year and, in the case of the Family Restaurant Division, new
California smoking legislation effective on January 1, 1995. The comparable
sales decrease in the Mexican Restaurant Division was entirely due to Chi-Chi's.
Product cost increased by $7,240,000 or 10.0% in the first quarter of
1995 as compared to the same period in 1994. This increase reflects Chi-Chi's
product cost for January 1995 for which there was no comparable cost in 1994
due to the timing of the Chi-Chi's Merger on January 27, 1994. As a percentage
of sales, product cost decreased from 28.4% in the first quarter of 1994 to
28.2% in 1995.
Payroll and related costs increased by $12,610,000 or 13.5% in the
first quarter of 1995 as compared to the same period in 1994. This increase
reflects the impact of Chi-Chi's January 1995 costs as discussed above and
costs related to 32 restaurants previously identified for divestment which were
not included in the Company's results for 1994 but are included in the
Company's operating
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<PAGE> 11
results in 1995. As a percentage of sales, payroll and related costs increased
from 36.6% in the first quarter of 1994 to 37.6% in the first quarter of 1995
due to the inclusion of the 32 restaurants previously identified for divestment
which generally have poorer margins as a result of lower sales volumes and the
impact of declining comparable restaurant sales which puts pressure on
operating margins.
Occupancy and other operating expenses increased by $11,290,000 or
19.7% in the first quarter of 1995 as compared to the same period in 1994.
This increase reflects the impact of the same factors affecting payroll and
related costs discussed above. As a percentage of sales, occupancy and other
operating expenses increased from 22.5% in the first quarter of 1994 to 24.4%
in the first quarter of 1995 due to the factors discussed with respect to
payroll and related costs and the impact of increased media spending.
General and administrative expenses increased by 17.6% ($2,302,000) in
the first quarter of 1995 as compared to the same period in 1994, primarily due
to the inclusion of Chi-Chi's general and administrative expenses for January
1995, which were not included for the same period in 1994, and severance and
related costs of approximately $603,000 resulting from a corporate staff
reduction of 45 employees in the first quarter of 1995. As a percentage of
sales, general and administrative expenses increased from 5.2% in the first
quarter of 1994 to 5.5% in the same period of 1995.
SELECTED DIVISION OPERATING DATA.
The Company operates restaurant chains serving two principal market
segments: full-service family restaurants (the "Family Restaurant Division")
and full-service Mexican restaurants (the "Mexican Restaurant Division"). At
March 26, 1995, the Company's Family Restaurant Division included 347
moderately-priced family-oriented restaurants operated primarily under the
Carrows and Coco's names, and the Company's Mexican Restaurant Division
operated 315 full-service restaurants primarily under the El Torito, Chi-Chi's
and Casa Gallardo names. The Company also operated 26 additional restaurants
under other formats.
The following table sets forth certain information regarding the
Company, the Family Restaurant Division and the Mexican Restaurant Division.
The table includes information with respect to total operations of the Company,
the Family Restaurant Division and the Mexican Restaurant Division (1994
information excludes restaurants previously identified for divestment).
Chi-Chi's data has been included in the Mexican Restaurant Division on a pro
forma basis as if the Acquisition had occurred as of the beginning of fiscal
1994.
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<PAGE> 12
<TABLE>
<CAPTION>
Quarters Ended
----------------------------------
March 26, March 27,
1995 1994
--------- ---------
($ in thousands, except
average check amount)
<S> <C> <C>
Family Restaurant Division
- ---------------------------
Restaurants Open at End of Period:
Owned/operated 347 344
Franchised and Licensed 233 212
Sales $117,596 $120,965
Divisional EBITDA (a) 10,942 10,946
Percentage increase (decrease) in comparable
restaurant sales (4.7)% 0.9 %
Average Check $ 6.25 $ 5.85
Mexican Restaurant Division
- ---------------------------
Restaurants Open at End of Period:
Owned/operated 315 307
Franchised and Licensed 29 25
Sales $149,680 $155,764
Divisional EBITDA (a) 2,132 9,673
Percentage increase (decrease) in comparable
restaurant sales (6.2)% (2.7)%
Average Check $ 8.31 $ 8.05
Total Company
- -------------
Restaurants Open at End of Period:
Owned/operated 688 664
Franchised and Licensed 262 237
Sales $281,133 $284,761
EBITDA (b) 12,022 20,311
Percentage increase (decrease) in comparable
restaurant sales (5.2)% (1.3)%
</TABLE>
- -------------
(a) Divisional EBITDA with respect to any operating division is defined as
earnings (loss) before gain (loss) on disposition of properties,
unallocated corporate overhead, interest, taxes, depreciation and
amortization.
(b) EBITDA is defined as earnings (loss) before gain (loss) on disposition
of properties, interest, taxes, depreciation and amortization. The
Company has included information concerning EBITDA herein because it
understands that such information is used by certain investors as one
measure of an issuer's historical ability to service debt. EBITDA
should not be considered as an alternative to, or more meaningful than,
operating income (loss) as an indicator of operating performance or to
cash flows from operating activities as a measure of liquidity.
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<PAGE> 13
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is involved in various litigation matters incidental to
its business. The Company does not believe that any of the existing claims or
actions will have a material adverse effect upon the consolidated financial
position and results of operations of the Company.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
Item 5. OTHER INFORMATION
On February 23, 1995, the Company reported that it had begun a search
to identify and hire a new chief executive officer. The search is continuing.
In addition, the Company reported that it had replaced the president of the
Mexican Restaurant Division with another senior executive. On March 31, 1995,
Jackson W. Goodall, Jr. resigned as Chairman of the Board of Directors and
Chief Executive Officer of the Company but remains on the Company's Board of
Directors. On April 27, 1995, the Board of Directors named Barry E. Krantz and
Kevin S. Relyea as Co-Presidents and Co-Chief Operating Officers.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule.
(b) Reports on Form 8-K.
On February 23, 1995, a report on Form 8-K was filed with the
Securities and Exchange Commission reporting that the Company had begun a
search to identify and hire a new chief executive officer. In addition,
the Company reported that it had replaced the president of the Mexican
Restaurant Division with another senior executive.
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SIGNATURE
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 Restaurants, Inc.
(Registrant)
By: /S/ Martin M. Casey
----------------------------
Martin M. Casey
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 10, 1995
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE QUARTER ENDED
MARCH 26, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q
FOR THE QUARTER ENDED MARCH 26, 1995.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
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