<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 22, 1995 Commission File Number 000-16791
STACEY'S BUFFET, INC.
---------------------
(Exact name of registrant as specified in its charter)
FLORIDA 59-2736736
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(State or other jurisdiction of (IRS employer identification no.)
incorporation or organization)
801 West Bay Drive, Suite #704
Largo, FL 34640
(Address of principal executive offices including zip code)
(813) 581-4492
(Registrant's telephone number, including area code)
Indicate by a check mark whether the registrant (1) has filed all reports 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 ninety (90) days.
Yes ( X ) No ( )
The number of shares outstanding of registrants' Common Stock, par value $.01
per share, at March 22, 1995 was 14,466,089.
<PAGE> 2
STACEY'S BUFFET, INC.
INDEX
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PART I: FINANCIAL INFORMATION
PAGE #
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Item 1. Financial Statements:
Balance Sheets
At March 22, 1995 and December 28, 1994 3
Statements of Operations
For the Twelve Weeks Ended March 22, 1995
and March 23, 1994 5
Statement of Stockholders' Equity
For the Twelve Weeks Ended March 22, 1995 6
Statements of Cash Flows
For the Twelve Weeks Ended March 22, 1995 7
and March 23, 1994
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II: OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
<PAGE> 3
PART I: FINANCIAL INFORMATION
Item 1: FINANCIAL STATEMENTS
--------------------
STACEY'S BUFFET, INC.
BALANCE SHEETS
At March 22, 1995 and December 28, 1994
<TABLE>
<CAPTION>
March 22, December 28,
1995 1994
____________ ____________
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 100,243 $ 30,207
Short-term investments 1,834,556 839,370
Receivables 47,154 42,246
Royalties 185,369 150,505
Inventory 491,248 559,929
Income tax refund receivable 0 19,199
Prepaid expenses and other 87,013 362,219
---------- ---------
Total current assets 2,745,583 2,003,675
Property and equipment, at cost, net of
accumulated depreciation 17,386,126 23,649,142
Deposits and other assets 145,101 163,143
Goodwill, net of accumulated amortization 10,947,803 11,081,797
----------- -----------
Total Assets $31,224,613 $36,897,757
========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements
<PAGE> 4
STACEY'S BUFFET, INC.
BALANCE SHEETS (Continued)
<TABLE>
<CAPTION>
March 22, December 28,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,053,704 $ 2,565,744
Current portion of obligations
under capital leases 107,719 107,719
Notes payable 0 188,000
Accrued expenses 1,953,870 1,887,574
Accrued rent 1,107,292 1,968,467
Provision for restaurant renovations
and closings 3,151,917 8,860,892
---------- ----------
Total current liabilities 9,374,502 15,578,396
Obligations under capital leases,
excluding current portion 132,108 156,984
Other liabilities 43,233 47,571
---------- ----------
Total Liabilities 9,549,843 15,782,951
========== ==========
Stockholders' equity:
Common stock, $.01 par value, authorized
25,000,000 shares, issued 14,466,089
shares at March 22, 1995, 14,466,089 at
December 28, 1994 144,660 144,660
Additional paid in capital 45,168,109 45,168,109
Accumulated deficit (23,637,999) (24,197,963)
----------- -----------
Total stockholders' equity 21,674,770 21,114,806
----------- -----------
Total Liabilities and Stockholders'
Equity $31,224,613 $36,897,757
========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements
<PAGE> 5
STACEY'S BUFFET, INC.
STATEMENTS OF OPERATIONS
For the Twelve Weeks
Ended March 22, 1995 and March 23, 1994
(unaudited)
<TABLE>
<CAPTION>
March 22, March 23,
1995 1994
------------- -------------
<S> <C> <C>
Restaurant Sales $ 15,314,992 $ 13,412,348
Cost of restaurant sales
Food cost 5,874,978 5,118,324
Labor cost 4,408,247 4,147,541
Operating cost 2,088,338 1,625,864
Occupancy cost 1,279,924 1,177,243
Depreciation 503,746 400,276
------------ ------------
Restaurant profit (loss) 1,159,759 943,100
Selling, general and
administrative expenses 617,111 949,767
Amortization of Goodwill 133,994 133,994
------------ ------------
Operating income (loss) 408,654 (140,661)
Other income (expense) 151,310 166,204
------------ ------------
Earnings before income taxes 559,964 25,543
Income tax expense (benefit) 0 0
------------ ------------
Net earnings $ 559,964 $ 25,543
=========== ===========
Net earnings per share
of common stock: $ .04 $ 0
Weighted average common
and common equivalent
shares outstanding 14,488,530 14,389,976
</TABLE>
[FN]
See accompanying notes to financial statements
<PAGE> 6
STACEY'S BUFFET, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
For the Twelve Weeks Ended
March 22, 1995
(unaudited)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid in Accumulated Stockholders
Shares Amount Capital Deficit Equity
---------- -------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balances at
December 28, 1994 14,466,089 $144,660 $45,168,109 $(24,197,963) $21,114,806
Net Earnings 0 0 0 559,964 559,964
---------- -------- ----------- ------------ -----------
Balances at
March 22, 1995 14,466,089 $144,660 $45,168,109 $(23,637,999) $21,674,770
========== ======= ========== =========== ==========
</TABLE>
[FN]
See accompanying notes to financial statements
<PAGE> 7
STACEY'S BUFFET, INC.
STATEMENT OF CASH FLOWS
For the Twelve Weeks ended March 22, 1995 and March 23, 1994
<TABLE>
<CAPTION>
1995 1994*
----------- ------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities
Net income $ 559,964 $ 25,543
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 637,740 534,270
Change in assets and liabilities:
(Increase)/decrease in short-term investments (995,186) 752,257
(Increase) in receivables (39,772) (168,756)
Decrease in inventory 68,681 12,727
Decrease/(increase) in income tax refund 19,199 (8,421)
Decrease in prepaid expenses and other assets 275,206 94,649
(Increase)/decrease in deposits and others (23,621) 38,854
Increase in accounts payable 487,960 1,078,714
(Decrease) in accrued expenses (794,879) (1,167,581)
(Decrease) in bank overdraft (188,000) 0
(Decrease) in other liabilities (4,338) (3,000)
Net cash effect of change in provision for
restaurant renovations and closings 113,657 (764,061)
Net cash provided by operating ----------- ------------
activities 116,611 425,195
----------- ------------
Cash flows (used) provided by investing
activities:
Capital expenditures, net (21,699) (703,199)
----------- ------------
Cash flows from financing activities:
Payments on capital lease obligations (24,876) (360,912)
Proceeds from stock options exercised 0 7,219
Stock offering costs (1993 merger) 0 (65,778)
----------- ------------
Net cash (used) by financing
activities (24,876) (419,471)
----------- ------------
Net increase/(decrease) in cash 70,036 (697,475)
Cash and cash equivalents at beginning
of period 30,207 1,005,925
----------- -----------
Cash and cash equivalents at end of period $ 100,243 $ 308,450
=========== ==========
</TABLE>
[FN]
* Certain amounts as of March 23, 1994 have been reclassified to conform to
the March 22, 1995 presentation.
See accompanying notes to financial statements
<PAGE> 8
STACEY'S BUFFET, INC.
STATEMENT OF CASH FLOWS
For the Twelve Weeks ended March 22, 1995 and March 23, 1994
CONTINUED
Excluded from the March 22, 1995 statement of cash flows are the
following non-cash transaction:
- Write-off of equipment and leasehold improvements (net of
accumulated depreciation) included in the provision for
restaurant renovations and closings recorded in the year
ended December 28, 1994. $5,705,876
- Write-off of deposits included in the provision for
restaurant renovations and closings recorded in the year
ended December 28, 1994. $ 41,663
See accompanying notes to financial statements
<PAGE> 9
STACEY'S BUFFET, INC.
NOTES TO FINANCIAL STATEMENTS
1. The financial statements are unaudited and reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods.
The financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Company's Annual Report to
Stockholders for the fiscal year ended December 28, 1994. The results of
operations for the twelve weeks ended March 22, 1995 are not necessarily
indicative of the results for the entire fiscal year ended January 3,
1996.
2. Earnings per share is based on the weighted average number of common
shares and common share equivalents outstanding in each period.
3. In 1994 the Company's balance sheet included a provision of $8.9 million
for the estimated cost to close certain underperforming restaurants.
Effective for fiscal 1995, only exit costs are charged to this provision,
whereas in 1994 and prior years, all operating losses for stores held for
closure were chargeable to this provision. There were $115,200 of exit
costs (primarily occupancy costs after closing) charged to this reserve
during the first quarter of 1995. During the first quarter of 1994,
operating losses of $459,261 were charged to this reserve.
<PAGE> 10
STACEY'S BUFFET, INC.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Results of operations for the twelve weeks ("first quarter") ended March
22, 1995, as compared to the same period last year:
RESTAURANT SALES of $15,314,992 for the quarter ended March 22, 1995
represents an increase of $1,902,644 or 14.2% from the same quarter in 1994.
This increase reflects the operation of 43 restaurants during the first
quarter, compared to 42 restaurants during the same quarter last year. In
1994, sales of $899,769 were excluded from reporting due to certain stores
being included in the provision for closing. During the latter part of the
first quarter, ten underperforming restaurants were closed, leaving 33
restaurants in operation at March 22, 1995. At the end of the first quarter,
1994, there were 37 restaurants in operation, due to the temporary closing of
five restaurants.
Average weekly sales for the twelve week quarter ended March 22, 1995 were
$31,774, compared to average weekly sales of $31,934 during the same period
last year. A price increase of 5% was instituted midway through the first
quarter of 1995 in the northeastern restaurants only. A slight decrease in
average weekly sales in 1995 from last year is due largely to the isolated
advertising done after the store remodeling was complete in 1994.
COST OF RESTAURANT SALES includes food, labor, and direct and indirect
operating costs, including occupancy. Operating costs consist primarily of
costs of supplies, utilities, maintenance, rent, real estate and personal
property taxes, insurance and depreciation.
Cost of food and labor as a percentage of sales for the twelve weeks ended
March 22, 1995 decreased to 67.1% from 69.1% in the same quarter, last year.
This reduction was due to our constantly monitoring of costs, and providing
product mix in our menus that yield more favorable results. It is also
significant that costs for stores in the reserve for closings in 1994
were eliminated from the statements. If costs for these reserved stores
would have been included, the costs in 1994 would have been even higher than
reported. Other operating costs, including rents and depreciation, were
25.2% for the first quarter, 1995 compared to costs of 23.9% in the
comparable quarter of 1994. Most of this increase in other operating costs
has to do with the elimination of store reporting for reserved stores in the
1994 period.
<PAGE> 11
STACEY'S BUFFET, INC.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
SELLING, GENERAL AND ADMINISTRATIVE COSTS decreased by $332,656 or 35% for
the first quarter, 1995 as compared to the previous year. Part of this
decrease is due to the first quarter of 1994 being the first quarter after
the merger of Homestyle and Stacey's and the resulting overlapping of many
overhead costs, which have now been eliminated. Total selling, general and
administrative expenses, as a percentage of sales, was 4.0% for the first
quarter of 1995, as compared to 7.1% for the first quarter of 1994. Some of
the more significant cost reductions in the corporate overhead area are:
bringing payroll preparation and related tax reporting in-house; reduction
of audit and legal fees because of more efficient use of these outside
services; elimination of some overlapping operations supervision; less
overall marketing costs due to more in-house and localized advertising;
elimination of consulting fees from prior management contracts; the adoption
of self-funded insurance programs where we benefit from our monitored, more
efficient cost controls.
Amortization of goodwill was $133,994 for the first quarter, 1995 and 1994.
This non-cash expense is the result of the 1993 merger.
OTHER INCOME for the first quarter, 1995 was $151,310 compared to $166,204
in the same quarter, last year. Other income consists primarily of royalty
fees earned, sales of senior citizens discount cards and interest income and
expense. The major difference between the comparable periods was the
interest income earned in 1994 on the $4.8 million of cash held in our
accounts.
INFLATIONARY FACTORS were minimal on the operating results of the Company.
Wholesale food costs have remained stable during the first quarter of 1995,
and there have not been any noticeable increases in supplies and other costs.
<PAGE> 12
STACEY'S BUFFET, INC.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES
The principal changes in the Company's financial condition from December 28,
1994 were increases in cash and short term investments, receivables and
accounts payable. Decreases since the prior year-end were in inventories,
prepaid expenses, notes payable, accrued expenses, the provision for
restaurant renovations and closings, capital lease obligations and other
liabilities. There is adequate cash flow in the company to pay current
obligations within terms. The remodeling and conversion of Homestyle Buffet
restaurants to the Stacey's concept is complete.
As of March 22, 1995, Stacey's ratio of current assets to current liabilities
was .29, as compared to .13 at December 28, 1994. Current liabilities
include $3,151,917 for the provision for restaurant renovations and closings.
<PAGE> 13
STACEY'S BUFFET, INC.
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
The registrant is not party to any material legal
proceedings.
Item 2. Changes in Securities
---------------------
Not applicable.
Item 3. Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Not applicable.
Item 5. Other Information
-----------------
Not applicable.
Item 6. Exhibits and Reports on Form 8K
_______________________________
a) Exhibits: None
b) Reports on Form 8K: The company filed a Form 8-K on March 2,
1995 reporting Stephen J. Marrier had been named Vice Chairman and
Acting CEO of Stacey's Buffet, Inc.
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
STACEY'S BUFFET, INC.
(Registrant)
<TABLE>
<S> <C>
Date: June 27, 1995 Leslie A. Spang
--------------------------------
Leslie A. Spang
Chief Financial Officer
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JAN-03-1996
<PERIOD-END> MAR-22-1995
<CASH> 100,243
<SECURITIES> 1,834,556
<RECEIVABLES> 232,523
<ALLOWANCES> 0
<INVENTORY> 491,248
<CURRENT-ASSETS> 2,745,583
<PP&E> 24,833,485
<DEPRECIATION> 7,634,708
<TOTAL-ASSETS> 31,224,613
<CURRENT-LIABILITIES> 9,374,502
<BONDS> 0
<COMMON> 144,660
0
0
<OTHER-SE> 21,530,110
<TOTAL-LIABILITY-AND-EQUITY> 31,224,613
<SALES> 15,314,992
<TOTAL-REVENUES> 15,314,992
<CGS> 14,155,233
<TOTAL-COSTS> 14,155,233
<OTHER-EXPENSES> 751,105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 559,964
<INCOME-TAX> 0
<INCOME-CONTINUING> 559,964
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 559,964
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
