<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10-K/A
--------------------
Amendment Number 1
For the fiscal year ended: December 31, 1995 Commission file number: 1-13044
COOKER RESTAURANT CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OHIO 69-1292102
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
5500 Village Boulevard, West Palm Beach, Florida 33407
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (407) 615-6000
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of Class Name of each exchange on which registered
<S> <C>
Common Shares, without par value The New York Stock Exchange
Rights to Purchase Class A Junior Participating Preferred Trades with the Common Shares
Shares, without par value
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
6 3/4% Convertible Subordinated Debentures Due 2002
This Amendment Number 1 is being filed by the Registrant in order to
refile the Statement of Cash Flows for the Fiscal Years Ended December 31,
1995, January 1, 1995 and January 2, 1994, which correct errors in two
line items for the fiscal year ended January 1, 1995; "Increase in Accrued
Liabilities" which was $356,000 in original, but which should have been $475,000
and "Increase in Income Taxes Payable" which was $544,000 in original, but which
should have been $625,000. No other amounts are being changed on such
Statement in any other financial statement or note thereto which are filed
herewith in complete form. The error is the result of a clerical mistake in
compiling the change in Accrued Liabilities and Income Taxes Payable.
<PAGE> 2
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(A) DOCUMENTS FILED AS PART OF THIS FORM 10-K.
(1) Financial Statements:
Independent Accountants' Report dated January 29, 1996
Balance Sheet as of December 31, 1995 and January 1, 1995
Statement of Income for the Fiscal Years Ended December 31, 1995,
January 1, 1995 and January 2, 1994
Statement of Changes in Shareholders' Equity for the Fiscal Years
Ended December 31, 1995, January 1, 1995 and January 2, 1994
Statement of Cash Flows for the Fiscal Years Ended December 31,
1995, January 1, 1995 and January 2, 1994
Notes to Financial Statements for the Fiscal Years Ended December
31, 1995, January 1, 1995 and January 2, 1994
(2) FINANCIAL STATEMENT SCHEDULES:
Not applicable.
(3) The following exhibits are filed as part of this Form 10-K.
(3) ARTICLES OF INCORPORATION AND BY-LAWS.
3.1. Amended and Restated Articles of Incorporation of the
Registrant (incorporated by reference to Exhibit 28.2 of
Registrant's quarterly report on Form 10-Q for the quarterly
period ended March 29, 1992; Commission File Number
0-16806).
3.2. Amended and Restated Code of Regulations of the Registrant
(incorporated by reference to Exhibit 4.5 of the
Registrant's quarterly report on Form 10-Q for the fiscal
quarter ended April 1, 1990; Commission File No. 0-16806).
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS.
4.1. See Articles FOURTH, FIFTH and SIXTH of the Amended and
Restated Articles of Incorporation of the Registrant (see
3.1 above).
4.2. See Articles One, Four, Seven and Eight of the Amended and
Restated Code of Regulations of the Registrant (see 3.2
above).
4.3. Rights Agreement dated as of February 1, 1990 between the
Registrant and National City Bank (incorporated by
reference to Exhibit 1 of the Registrant's Form 8-A filed
with the Commission on February 9, 1990; Commission File No.
0-16806).
<PAGE> 3
4.4. Amendment to Rights Agreement dated as of November 1, 1992
between the Registrant and National City Bank (incorporated
by reference to Exhibit 4.4 of Registrant's annual report on
Form 10-K for the fiscal year ended January 3, 1993 (the
"1992 Form 10-K"); Commission File No. 0-16806).
4.5. Letter dated October 29, 1992 from the Registrant to First
Union National Bank of North Carolina (incorporated by
reference to Exhibit 4.5 to the 1992 Form 10-K).
4.6. Letter dated October 29, 1992 from National City Bank to the
Registrant (incorporated by reference to Exhibit 4.6 to the
1992 Form 10-K).
4.7. See Section 7.4 of the Amended and Restated Loan Agreement
dated December 22, 1995 between Registrant and First Union
National Bank of Tennessee. (see 10.4 below).
4.8. Indenture dated as of October 28, 1992 between Registrant
and First Union National Bank of North Carolina, as Trustee
(incorporated by reference to Exhibit 2.5 of Registrant's
Form 8-A filed with the Commission on November 10, 1992;
Commission File Number 0-16806).
(10) MATERIAL CONTRACTS (* Management contract or compensatory
plan or arrangement.)
10.1. Purchase and Sale Agreement dated October 20, 1995 between
GMRI, Inc. and Registrant (incorporated by reference to
Exhibit 99.1 of the Registrant's Current Report on Form 8-K
dated January 4, 1996 (the "1996 8-K"); Commission File No.
1-13044).
10.2. First Amendment to Purchase and Sale Agreement dated October
__, 1995 between GMRI, Inc. and Registrant (incorporated by
reference to Exhibit 99.2 of the 1996 8-K; Commission File
No. 1-13044).
10.3. Joinder of Escrow Agreement dated October 25, 1995 among
Lawyers Title Insurance Corporation, GMRI, Inc. and
Registrant (incorporated by reference to Exhibit 99.3 of the
1996 8-K; Commission File No. 1-13044).
10.4. Amended and Restated Loan Agreement dated December 22, 1995
between Registrant and First Union National Bank of
Tennessee. X
10.5. Form of Contingent Employment Agreement and schedule of
executed Agreements. * X
10.6. The Registrant's 1988 Employee Stock Option Plan, as amended
and restated (incorporated by reference to Exhibit 10.12 of
the Registrant's annual report on Form 10-K for the fiscal
year ended December 29, 1991 (the "1991 Form 10-K"),
Commission File No. 0-16806).*
10.7. The Registrant's 1992 Employee Stock Option Plan
(incorporated by reference to Exhibit 10.14 to the 1991 Form
10-K).*
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.15 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended January 2, 1994 (the "1993 Form 10-K"),
Commission File No. 0-16806).*
10.9. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated (incorporated by reference to Exhibit
10.16 of the 1993 Form 10-K).*
10.10. The Registrant's 1996 Officers' Stock Option Plan. * X
[FN]
- --------------
X Previously Filed
<PAGE> 4
10.11. Guaranty and Suretyship Agreement dated March 22, 1994
between the Registrant and First Union National Bank of
Tennessee (incorporated by reference to Exhibit 10.17 of the
1993 Form 10-K).
10.12. Reaffirmation and Amendment to Guaranty and Suretyship
Agreement between Registrant and NationsBank of Tennessee,
N.A. dated July 24, 1995 (incorporated by reference to
Exhibit 10.5 of the Registrant's Quarterly Report on Form
10-Q for the quarterly period ended July 2, 1995;
Commission File No. 1-13044).
10.13. Separation Agreement and General Release dated October 26,
1994 between Registrant and William Z. Esch (incorporated
by reference to Exhibit 10.16 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended January 1,
1995; Commission File No. 1-13044).*
(23) CONSENTS OF EXPERTS AND COUNSEL.
23.1 Consent of Price Waterhouse LLP.
(24) POWERS OF ATTORNEY.
24.1. Powers of Attorney. X
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf of the
Registrant to sign pursuant to a power of attorney. X
(27) FINANCIAL DATA SCHEDULE.
27.1. Financial Data Schedule. X
(B) REPORTS ON FORM 8-K.
No current report on Form 8-K was filed by the Registrant during the
fourth quarter of fiscal 1995.
[FN]
- -------------
X Previously Filed
<PAGE> 5
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment Number 1 to
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: April 18, 1996
COOKER RESTAURANT CORPORATION
(the "Registrant")
By: /s/ G. Arthur Seelbinder
--------------------------------
G. Arthur Seelbinder
Chairman of the Board,
Chief Executive Officer and Director
(principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Amendment Number 1 to this report has been signed below by the following
persons on behalf of the registrant and in the capacities indicated on April
18, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ G. Arthur Seelbinder Chairman of the Board, Chief Executive
- ---------------------------------------
G. Arthur Seelbinder Officer and Director (principal executive
officer)
/s/ Phillip L. Pritchard * President, Chief Operating
- ---------------------------------------
Phillip L. Pritchard Officer and Director
/s/ Glenn W. Cockburn * Senior Vice President - Operations
- ---------------------------------------
Glenn W. Cockburn and Director
/s/ David C. Sevig * Vice President - Chief Financial Officer
- ---------------------------------------
David C. Sevig (principal financial and accounting officer)
/s/ Joseph E. Madigan * Director
- ---------------------------------------
Joseph E. Madigan
/s/ Robin V. Holderman * Director
- ---------------------------------------
Robin V. Holderman
/s/ David T. Kollat * Director
- ---------------------------------------
David T. Kollat
/s/ David L. Hobson * Director
- ---------------------------------------
David L. Hobson
/s/ Henry R. Hillenmeyer * Director
- ---------------------------------------
Henry R. Hillenmeyer
/s/ Margaret T. Monaco * Director
- ---------------------------------------
Margaret T. Monaco
* By: /s/ G. Arthur Seelbinder
- ---------------------------------------
G. Arthur Seelbinder
Attorney-in-Fact
</TABLE>
<PAGE> 6
COOKER RESTAURANT CORPORATION
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Accountants.................................................................. F-1
Balance Sheet at December 31, 1995 and January 1, 1995............................................. F-2
Statement of Income for the fiscal years ended December 31, 1995, January 1, 1995 and
January 2, 1994.................................................................................... F-4
Statement of Changes in Shareholders' Equity for the fiscal years ended December 31, 1995,
January 1, 1995 and January 2, 1994................................................................ F-5
Statement of Cash Flows for the fiscal years ended December 31, 1995, January 1, 1995 and
January 2, 1994.................................................................................... F-6
Notes to Financial Statements...................................................................... F-7
</TABLE>
F-1
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
January 29, 1996
To the Board of Directors and Shareholders
of Cooker Restaurant Corporation
In our opinion, the accompanying balance sheet and the related statements of
income, of changes in shareholders' equity and of cash flows present fairly, in
all material respects, the financial position of Cooker Restaurant Corporation
(the Company) at December 31, 1995 and January 1, 1995, and the results of its
operations and its cash flows for each of the three fiscal years in the period
ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
Price Waterhouse LLP
Columbus, Ohio
F-2
<PAGE> 8
COOKER RESTAURANT CORPORATION
BALANCE SHEET
DECEMBER 31, 1995 AND JANUARY 1, 1995
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1995 1995
ASSETS (in thousands)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,299 $ 2,087
Inventory 914 830
Preoperational costs 302 678
Prepaid expenses and other current assets 511 739
-------- --------
TOTAL CURRENT ASSETS 3,026 4,334
PROPERTY AND EQUIPMENT 78,127 64,481
OTHER ASSETS 2,028 2,037
-------- --------
$ 83,181 $ 70,852
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,421 $ 2,604
Accrued liabilities 5,543 4,433
Income taxes payable 783 633
Deferred income taxes 79 79
-------- --------
TOTAL CURRENT LIABILITIES 8,826 7,749
LONG-TERM DEBT 35,976 28,600
DEFERRED INCOME TAXES 433 595
-------- --------
TOTAL LIABILITIES 45,235 36,944
-------- --------
SHAREHOLDERS' EQUITY:
Common shares - without par value; authorized, 26,082 26,003
30,000,000 shares; issued 7,663,000 and 7,651,000
shares at December 31, 1995 and January 1, 1995,
respectively
Retained earnings 18,013 13,939
Treasury stock, at cost, 513,000 and 500,000 shares (6,149) (6,034)
at December 31, 1995 and January 1, 1995,
respectively
COMMITMENTS (Note 13)
-------- --------
37,946 33,908
-------- --------
$ 83,181 $ 70,852
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE> 9
COOKER RESTAURANT CORPORATION
STATEMENT OF INCOME
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1, JANUARY 2,
1995 1995 1994
(in thousands, except per share data)
<S> <C> <C> <C>
SALES $ 91,678 $ 84,169 $ 66,688
-------- -------- --------
COST OF SALES:
Food and beverages 26,218 24,193 18,780
Labor 31,977 31,389 23,384
Restaurant operating expenses 15,065 13,549 10,540
Restaurant depreciation and amortization 3,957 5,030 4,063
-------- -------- --------
77,217 74,161 56,767
-------- -------- --------
Restaurant operating income 14,461 10,008 9,921
-------- -------- --------
OTHER EXPENSES (INCOME):
General and administrative 5,785 4,532 3,710
Interest expense 1,848 1,787 1,105
Gain on sale of property (305) -- --
Interest and other income (30) (72) (409)
-------- -------- --------
7,298 6,247 4,406
-------- -------- --------
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 7,163 3,761 5,515
PROVISION FOR INCOME TAXES BEFORE
EXTRAORDINARY ITEM 2,731 1,280 2,021
-------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 4,432 2,481 3,494
EXTRAORDINARY GAIN, NET OF INCOME TAXES -- 484 --
-------- -------- --------
NET INCOME $ 4,432 $ 2,965 $ 3,494
======== ======== ========
EARNINGS PER COMMON SHARE:
Before extraordinary item $ .60 $ .34 $ .45
Extraordinary item -- .07 --
-------- -------- --------
TOTAL $ .60 $ .41 $ .45
======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
AND COMMON EQUIVALENT SHARES OUTSTANDING 7,387 7,254 7,846
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE> 10
COOKER RESTAURANT CORPORATION
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
<TABLE>
<CAPTION>
Common Shares Treasury Stock
----------------------- Retained -----------------------
Shares Amounts Earnings Shares Amounts Total
-------- -------- -------- -------- -------- --------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance, January 3, 1993 7,591 $ 25,393 $ 8,226 -- $ -- $ 33,619
Purchase of treasury stock -- -- -- 105 (1,347) (1,347)
Issuance of common shares
under stock option plans 55 338 -- -- -- 338
Tax benefits of stock -- 244 -- -- -- 244
options exercised
Dividends paid $.05 per -- -- (380) -- -- (380)
share
Net income -- -- 3,494 -- -- 3,494
-------- -------- -------- -------- -------- --------
Balance, January 2, 1994 7,646 25,975 11,340 105 (1,347) 35,968
Purchase of treasury stock -- -- -- 395 (4,687) (4,687)
Issuance of common shares
under stock option plans 5 22 -- -- -- 22
Tax benefits of stock -- 6 -- -- -- 6
options exercised
Dividends paid $.05 per -- -- (366) -- -- (366)
share
Net income -- -- 2,965 -- -- 2,965
-------- -------- -------- -------- -------- --------
Balance, January 1, 1995 7,651 26,003 13,939 500 (6,034) 33,908
Addition to treasury stock -- -- -- 13 (115) (115)
Issuance of common shares
under stock option plans 12 52 -- -- -- 52
Tax benefits of stock -- 27 -- -- -- 27
options exercised
Dividends paid $.05 per -- -- (358) -- -- (358)
share
Net income -- -- 4,432 -- -- 4,432
-------- -------- -------- -------- -------- --------
Balance, December 31, 1995 7,663 $ 26,082 $ 18,013 513 $ (6,149) $ 37,946
======== ======== ======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE> 11
COOKER RESTAURANT CORPORATION
STATEMENT OF CASH FLOWS
FISCAL YEARS ENDED DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1, JANUARY 2,
1995 1995 1994
(in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,432 $ 2,965 $ 3,494
Adjustments to reconcile net income to net
cash providing by operating activities:
Depreciation and amortization 4,375 5,464 4,482
Gain on sale of property (305) -- --
Gain on repurchase of debentures, net of
income taxes
(23) (484) --
(Increase) in inventory (84) (192) (207)
(Increase) in preoperational costs (444) (1,348) (2,441)
Decrease (increase) in prepaid expenses
and other current assets
237 (327) (756)
(Increase) decrease in other assets (276) (131) 130
Increase in accounts payable 460 683 (336)
Increase in accrued liabilities 1,110 475 985
Increase in income taxes payable 175 625 752
Decrease (increase) in deferred income taxes (162) (159) 100
-------- -------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 9,495 7,571 6,203
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (17,200) (11,318) (23,627)
Proceeds from sales of property and equipment 459 206 108
Proceeds from sales of short-term investments -- 749 18,628
Advances to related party -- -- (375)
Payments from related party -- -- 375
-------- -------- --------
NET CASH USED IN INVESTING ACTIVITIES (16,741) (10,363) (4,891)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 8,811 9,300 --
Repurchase of debentures (1,180) (1,200) --
Redemption of debentures (893) (975) --
Exercise of stock options 78 22 337
Purchases of treasury stock -- (6,034) --
Dividends paid (358) (366) (379)
-------- -------- --------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES 6,458 747 (42)
-------- -------- --------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (788) (2,045) 1,270
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 2,087 4,132 2,862
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,299 $ 2,087 $ 4,132
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE> 12
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cooker Restaurant Corporation (the Company) owns and operates 37
restaurants in Tennessee, Ohio, Indiana, Kentucky, Michigan, Florida,
Georgia, North Carolina, Virginia, and Maryland which have been developed
under the Cooker concept.
Fiscal year. The Company's fiscal year ends on the Sunday closest to
December 31 of each year. Fiscal years 1995, 1994 and 1993 consisted of 52
weeks.
Cash and cash equivalents. Cash and cash equivalents consist of cash on
hand and in banks and credit card receivables. Credit card receivables are
considered cash equivalents because of their short collection period. The
carrying amount of credit card receivables approximates fair value.
Inventories. Inventories consist primarily of food and beverages and are
stated at the lower of cost or market. Cost is determined by the first-in,
first-out (FIFO) method.
Preoperational costs. Preoperational costs consist primarily of costs for
employee training and relocation and supplies incurred in connection with
the opening of each restaurant. These costs are accumulated to the date
the restaurant is opened and are amortized on the straight-line method over
one year commencing from that date. Prior to fiscal 1993, preoperational
costs were amortized on the straight-line method over three years. This
change in estimate decreased fiscal 1993 net income by $611,000 or $.08 per
share. Accumulated amortization of preoperational costs was $136,000 and
$711,000 at December 31, 1995 and January 1, 1995, respectively.
Property and equipment. Property and equipment, including capital
improvements, are recorded at cost. Depreciation is computed by the
straight-line method over the estimated useful lives of the assets.
Leasehold improvements are amortized using the straight-line method over
the shorter of the useful life of the improvements or the remaining lease
term.
Maintenance and repairs are charged directly to expense as incurred. When
property and equipment are sold or otherwise disposed of, the related cost
and accumulated depreciation are removed from the accounts and the
resulting gains or losses are reported in operations.
Interest is capitalized primarily in connection with the construction of
new restaurants. Capitalized interest is amortized over the asset's
estimated useful life. Interest costs of $291,000, $291,000 and $429,000
were capitalized in fiscal 1995, 1994 and 1993, respectively.
Deferred financing costs. Deferred financing costs are being amortized over
the term of the related debt.
Prepaid lease. Prepaid lease represents prepayment of a long-term land lease
and is being amortized over the lease term.
Financial instruments. The carrying amounts of financial instruments,
including cash and cash equivalents, accounts payable and other current
liabilities approximate their estimated fair values. The carrying amount
of borrowings under the Amended and Restated Loan Agreement (see Note 5)
approximates fair value at December 31, 1995. The fair value of the
convertible subordinated debentures is determined using discounted future
cash flows based on similar types of borrowing arrangements. At December
31, 1995, the carrying amount and fair value of the convertible
subordinated debentures are $17,870,000 and $15,569,000, respectively.
Income taxes. Income taxes are accounted for under the liability method in
accordance with Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes.
F-7
<PAGE> 13
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
Earnings per share. Earnings per share is calculated using the weighted
average number of common shares outstanding including common share
equivalents, which consist of stock options. The convertible subordinated
debentures have not been included as common share equivalents due to their
antidilutive effect.
Use of estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Reclassifications. Certain fiscal 1994 and 1993 amounts have been
reclassified to conform with fiscal 1995 presentations.
2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
December 31, January 1,
1995 1995
------------- ----------
(in thousands)
<S> <C> <C>
Land $ 19,595 $ 17,512
Buildings and leasehold improvements 43,097 39,135
Furniture, fixtures and equipment 16,836 15,961
Construction in progress 11,013 858
Land held for sale 882 1,089
-------- --------
91,423 74,555
Less accumulated depreciation and
amortization (13,296) (10,074)
-------- --------
$ 78,127 $ 64,481
======== ========
</TABLE>
F-8
<PAGE> 14
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
3. OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
December 31 January 1,
1995 1995
----------- ----------
(in thousands)
<S> <C> <C>
Deferred financing costs, net of
accumulated amortization of $573,000
and $465,000 $ 764 $ 753
Prepaid lease, net of accumulated
amortization of $46,000 and $33,000 643 617
Advances to Employee Stock Ownership
Plan 270 298
Liquor licenses, net of accumulated
amortization of $90,000 and $73,000 209 224
Other 142 145
------ ------
$2,028 $2,037
====== ======
</TABLE>
4. ACCRUED LIABILITIES
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
December 31 January 1,
1995 1995
----------- ----------
(in thousands)
<S> <C> <C>
Salaries and wages
$3,221 $2,274
Gift certificates payable 608 567
Sales tax payable 466 442
Property taxes 298 485
Other 950 665
------ ------
$5,543 $4,433
====== ======
</TABLE>
F-9
<PAGE> 15
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
5. LONG-TERM DEBT
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, January 1,
1995 1995
------------ ----------
(in thousands)
<S> <C> <C>
Convertible subordinated debentures $17,870 $19,300
Revolving line of credit 18,106 9,300
------- -------
$35,976 $28,600
======= =======
</TABLE>
The convertible subordinated debentures (the "Debentures") mature October
1, 2002. The Debentures bear interest at 6.75% which is payable quarterly
on the first day of each January, April, July and October. The Debentures
are convertible at any time before maturity, unless previously redeemed,
into common shares of the Company at a conversion price of $21.5625 per
share, subject to adjustment for stock splits. The Debentures are
subordinated to all existing and future Senior Indebtedness of the Company
as defined in the indenture relating to the Debentures.
At the holder's option, the Company is obligated to redeem debentures
tendered during the period from August 1 through October 1 of each year,
commencing August 1, 1994, at 100% of their principal amount plus accrued
interest, subject to an annual aggregate maximum (excluding the redemption
option on the death of the holder) of $1,150,000. During fiscal years 1995
and 1994, the Company redeemed the annual aggregate maximum amount required
by the holder's option. The Company is also required to redeem debentures
at 100% of their principal plus accrued interest in the event of death of a
debenture holder up to a maximum of $25,000 per year per deceased debenture
holder. During fiscal years 1995 and 1994, the Company redeemed debentures
subject to this provision of $30,000 and $50,000, respectively.
The Debentures are redeemable at any time on or after October 1, 1994 at
the option of the Company, in whole or in part, at declining premiums. In
addition, upon the occurrence of certain changes of control of the Company,
the Company is obligated to purchase Debentures at the holder's option at
par plus accrued interest.
In December 1994, the Company recorded an extraordinary gain of $734,000
($484,000 after taxes) in connection with the repurchase of debentures in
the principal amount of $2,500,000. In December 1995, the Company
repurchased debentures in the principal amount of $250,000 resulting in a
gain of $23,000. These transactions were financed through funds available
under the revolving line of credit.
On December 22, 1995, the Company entered into a Revolving/Term Loan under
an Amended and Restated Loan Agreement (the Agreement) with a bank for
borrowings up to $33,000,000. Borrowings under the Agreement may be used
for general working capital purposes and costs incurred in expansion of the
restaurant business. The Agreement is secured by certain properties owned
by the Company. Beginning January 1, 1998, borrowing availability will be
reduced quarterly by a maximum of $1,650,000. Borrowings are due December
31, 1998.
Interest, payable quarterly, is at the Company's option at LIBOR plus 1.25%
up to LIBOR plus 2.00% or prime up to prime plus 0.50%, based on a
financial ratio as defined in the Agreement. Interest on borrowings at
December 31, 1995 ranged from 7.43% to 8.75%.
F-10
<PAGE> 16
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
The Agreement contains certain restrictive covenants, including maintenance
of a minimum tangible net worth and fixed charge coverage ratio and
limitations on indebtedness, stock acquisitions, encumbrances and new
restaurant expansion. In addition, provided that net income of the prior
year exceeds $2,000,000, dividends can be declared but cannot exceed 15% of
the prior year's net income.
6. SHAREHOLDERS' EQUITY
The Company has authorized 5,000,000 shares of Class A participating
preferred stock, none of which have been issued.
In January 1990, the Board of Directors approved a Shareholder Rights Plan,
as amended, which provides that, in the event that a third party purchases
20% or more of total outstanding stock of the company, a dividend
distribution of one and one-half rights for each outstanding common share
will be made. These rights expire ten years from date of issuance, if not
earlier redeemed by the Company, and entitle the holder to purchase, under
certain conditions, preferred shares or common shares of the Company. As
of December 31, 1995, approximately 10,725,000 rights were outstanding.
7. INCOME TAXES
The provision for income taxes for the following fiscal years then ended
consists of:
<TABLE>
<CAPTION>
December 31, January 1, January 2,
1995 1995 1994
------------ -------- ---------
(in thousands)
<S> <C> <C> <C>
Current taxes:
Federal
$ 2,412 $ 1,037 $ 1,453
State and local 481 402 468
------- ------- -------
2,893 1,439 1,921
Deferred taxes (162) (159) 100
------- ------- -------
Provision for income taxes
before extraordinary item 2,731 1,280 2,021
Provision for income taxes on
extraordinary item -- 249 --
------- ------- -------
Provision for income taxes $ 2,731 $ 1,529 $ 2,021
======= ======= =======
</TABLE>
F-11
<PAGE> 17
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
A reconciliation of the differences between income taxes calculated at the
Federal statutory tax rate and the provision for income taxes before
extraordinary item is as follows:
<TABLE>
<CAPTION>
Fiscal year ended
------------------------------------------
December 31, January 1, January 2,
1995 1995 1994
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Income tax expense on income
before extraordinary item
based on the Federal statutory
rate
$ 2,435 $ 1,279 $ 1,875
State taxes, net of Federal tax
benefit
317 265 258
Reserve for tax examination 205 -- --
FICA tip tax credit (376) (250) --
Tax-exempt income and other 150 (14) (112)
------- ------- -------
$ 2,731 $ 1,280 $ 2,021
======= ======= =======
</TABLE>
Deferred income taxes are recorded based upon the difference between the
book and tax bases of assets and liabilities, primarily property and
equipment, preoperational costs and accrued liabilities. Deferred tax
assets at December 31, 1995 and January 1, 1995 were $373,000 and $137,000,
respectively. Deferred tax liabilities at December 31, 1995 and January 1,
1995 were $885,000 and $811,000, respectively.
8. EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the Company established an Employee Stock Ownership Plan (the
"ESOP" or the "Plan"). All employees who have reached the age of 21 years
are participants in the Plan. Participants vest in the Plan based upon a
graduated schedule providing 20 percent after three years of service and
each year thereafter, with full vesting after seven years.
The amount and frequency of contributions to the Plan are at the discretion
of the Company. Contributions of $73,000 were made to the ESOP during
fiscal 1995. No contributions were made during fiscal 1994 and 1993.
Dividends on shares held by the ESOP are used to reduce the Company's
receivable from the ESOP prior to allocation to ESOP participant accounts.
Shares forfeited due to participant withdrawals from the ESOP during fiscal
1995 will be reallocated to remaining participants as of the end of the
plan year, as was done for shares forfeited due to participant withdrawals
from the ESOP during fiscal 1994.
As of December 31, 1995, and January 1, 1995, the ESOP owns 335,000 and
363,000, respectively, of the Company's common shares, all of which are
allocated to eligible participants.
9. STOCK OPTION PLANS
The Company has employee stock option plans adopted in 1988 (1988 Plan) and
1992 (1992 Plan). Under these plans, employees and nonmanagement directors
are granted stock options and stock appreciation rights as determined by a
committee appointed by the Board of Directors (the Committee). Each option
permits the holder to purchase one share of common stock of the Company at
the stated exercise price up to ten years from the date of grant. The
stated exercise price is the market value of the stock on the date of
grant. Options vest at a rate of 25% per year. The Company has reserved
620,000 and 600,000 common shares for issuance to employees and 73,000 and
200,000 for issuance to nonmanagement directors under the 1988 Plan and
1992 Plan, respectively.
F-12
<PAGE> 18
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
Changes in the number of shares under the stock option plans are summarized
as follows:
<TABLE>
<CAPTION>
Options Price
-------- -------------------
<S> <C> <C> <C>
Balance at January 3 , 1993 536,000 $ 4.03 - $17.75
Granted 282,000 17.75 - 21.75
Canceled (1,000) 4.03 - 4.41
Exercised (55,000) 4.03 - 11.19
-------- ----- ------
Balance at January 2, 1994 762,000 4.03 - 21.75
Granted 772,000 6.63 - 12.88
Canceled (634,000) 4.03 - 21.75
Exercised (6,000) 4.03 - 4.41
-------- ----- ------
Balance at January 1, 1995 894,000 4.03 - 21.75
Granted 65,000 6.75 - 11.00
Canceled (17,000) 6.75 - 11.19
Exercised (11,000) 4.03 - 7.63
-------- ----- ------
Balance at December 31, 1995 931,000 $ 4.03 - $21.75
======== ====== ======
</TABLE>
At December 31, 1995, options were exercisable to purchase 417,000 common
shares.
During fiscal 1994, the Committee changed the exercise price of certain
options through the authorization of the surrender and cancellation of
541,000 options and the reissuance of 398,000 options under the 1988 and
1992 Plans. The remaining 143,000 canceled options were made available for
subsequent reissuance.
10. LEASES
The Company leases buildings for certain of its restaurants under long-term
operating leases which expire over the next twenty- five years. In
addition to the minimum rental for these leases, the Company also pays, in
certain instances, additional rent based on a percentage of sales, and its
pro rata share of the lessor's direct operating expenditures. Several of
the leases provide for option renewal periods and scheduled rent increases.
Rental expense totaled $1,378,000, $1,637,000 and $1,394,000, including
percentage rent of $262,000, $247,000 and $245,000 for the fiscal years
ended December 31, 1995, January 1, 1995 and January 2, 1994, respectively.
Minimum rental commitments for noncancelable leases as of December 31, 1995
are as follows:
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ ------
(in thousands)
<S> <C>
1996 $1,494
1997 1,498
1998 1,519
1999 1,545
2000 1,462
Thereafter 14,761
------
$22,279
=======
</TABLE>
F-13
<PAGE> 19
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
11. SUPPLEMENTAL CASH FLOW INFORMATION
During 1995, the Company received $115,000 of its common stock from
the ESOP for partial repayment of the advances to the ESOP. The
common stock received was recorded as treasury stock.
During fiscal 1993, the Company acquired treasury stock of $1,347,000
which was included in accounts payable at January 2, 1994 and was paid
in fiscal 1994. Also, as described in Note 4, $643,000 related to the
repurchase of Debentures was included in accounts payable at January
1, 1995 and was paid during 1995.
Cash paid for interest for fiscal 1995, 1994 and 1993 was $1,489,000,
$2,175,000 and $1,007,000, respectively.
Cash paid for taxes for fiscal 1995, 1994 and 1993 was $2,581,000,
$895,000 and $1,169,000, respectively.
12. RELATED PARTIES
During October 1993, the Company advanced $375,000 to the Chairman of
the Board of Directors (the Chairman). This advance bore interest at
7%. Principal and interest were repaid in December 1993 and March
1994, respectively.
Effective March 9, 1994, the Board of Directors (the Board) authorized
the Company to execute a Guaranty and Suretyship Agreement whereby the
Company guaranteed $5,000,000 of personal indebtedness of the
Chairman. This indebtedness is secured by a pledge of 570,000 common
shares owned by the Chairman. The guaranty provides that the bank
will sell the pledged shares and apply the proceeds thereof to the
loan prior to calling on the Company for its guaranty. A fee of .25%
per annum is charged on the amount of the guarantee. On June 27,
1995, the Board requested the Chairman to refinance his personal
indebtedness with another bank. On December 27, 1995, the Board
authorized the Company to reimburse the Chairman $42,000 for
refinancing costs incurred in executing the request. The Company does
not consider it necessary to provide for a potential loss related to
the guarantee in the financial statements at this time.
13. SUBSEQUENT EVENT
In January 1996, the Company borrowed an additional $7,050,000 on its
revolving line of credit to finance the purchase of land and buildings
for which commitments existed at December 31, 1995.
F-14
<PAGE> 20
OOKER RESTAURANT CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995, JANUARY 1, 1995 AND JANUARY 2, 1994
14. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for fiscal year 1995 and 1994 are summarized
as follows:
<TABLE>
<CAPTION>
First Second Third Fourth
1995 Quarter Quarter Quarter Quarter
---- ------- ------- ------- -------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Sales $22,899 $22,694 $22,758 $23,327
Restaurant operating 3,556 3,547 3,615 3,743
income (a)
Income before income taxes 1,806 1,723 1,733 1,901
Net income 1,005 1,102 1,109 1,216
Earnings per share $.14 $.15 $.15 $.16
</TABLE>
<TABLE>
<CAPTION>
First Second Third Fourth
1994 Quarter Quarter Quarter Quarter
---- ------- ------- ------- -------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Sales $20,120 $20,830 $21,226 $21,993
Restaurant operating 2,473 2,159 2,452 2,924
income (a)
Income before income taxes
and extraordinary item 1,003 814 820 1,124
Extraordinary gain (net -- -- -- 484
of tax)
Net income 652 554 549 1,210
Earnings per share from
operations before
extraordinary item $ .09 $ .08 $ .07 $ .10
Earnings per share from
extraordinary gain -- -- -- $ .07
Net income per share $ .09 $ .08 $ .07 $ .17
</TABLE>
(a) Sales less food and beverages, labor, restaurant operating expenses
and depreciation and amortization.
F-15
<PAGE> 21
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
COOKER RESTAURANT CORPORATION
-----------------------
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED:
DECEMBER 31, 1995
-----------------------
EXHIBITS
-----------------------
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT + REFERENCE
<S> <C> <C> <C>
3.1. Amended and Restated Articles of Incorporation of the
Registrant. 13 *
3.2. Amended and Restated Code of Regulations of the
Registrant. 12 *
4.1. See Articles FOURTH, FIFTH and SIXTH of the
Amended and Restated Articles of Incorporation of the
Registrant (see 3.1 above). 13 *
4.2. See Articles One, Four, Seven and Eight of the
Amended and Restated Code of Regulations of the
Registrant (see 3.2 above). 12 *
4.3. Rights Agreement dated as of February 1, 1990 between
the Registrant and National City Bank. 65 *
4.4. Amendment to Rights Agreement dated as of November
1, 1992 between the Registrant and National City Bank. 1 *
4.5. Letter dated October 29, 1992 from the Registrant to
First Union National Bank of North Carolina. 1 *
4.6. Letter dated October 29, 1992 from National City Bank
to the Registrant. 1 *
4.7. See Section 7.4 of the Amended and Restated Loan
Agreement dated as of December 22, 1995 between the
Registrant and First Union National Bank of
Tennessee (see 10.4 below). 31 X
4.8. Indenture dated as of October 28, 1992 between
Registrant and First Union National Bank of North
Carolina, as Trustee. 61 *
10.1. Purchase and Sale Agreement dated October 20, 1995
between GMRI, Inc. and Registrant. 17 *
10.2. First Amendment to Purchase and Sale Agreement dated
October __, 1995 between GMRI, Inc. and Registrant. 2 *
10.3. Joinder of Escrow Agreement dated October 25, 1995
among Lawyers Title Insurance Corporation, GMRI,
Inc. and Registrant. 2 *
10.4. Amended and Restated Loan Agreement dated
December 22, 1995 between Registrant and First Union
National Bank of Tennessee. 31 X
10.5. Form of Contingent Employment Agreement and
schedule of executed Agreements. 10 X
10.6. The Registrant's 1988 Employee Stock Option Plan, as
amended and restated. 14 *
10.7. The Registrant's 1992 Employee Stock Option Plan. 13 *
<FN>
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
X Previously filed.
</TABLE>
E-1
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT NUMBER OF PAGES INCORPORATED BY
NUMBER DESCRIPTION IN ORIGINAL DOCUMENT + REFERENCE
<S> <C> <C> <C>
10.8. The Registrant's 1988 Directors Stock Option Plan, as
amended and restated. 6 *
10.9. The Registrant's 1992 Directors Stock Option Plan, as
amended and restated. 6 *
10.10. The Registrant's 1996 Officers' Stock Option Plan 10 X
10.11. Guaranty and Suretyship Agreement dated March 22,
1994 between the Registrant and First Union National
Bank of Tennessee. 7 *
10.12. Reaffirmation and Amendment to Guaranty and
Suretyship Agreement between Registrant and
NationsBank of Tennessee, N.A. dated July 24, 1995. 2 *
10.13. Separation Agreement and General Release dated
October 26, 1994 between Registrant and William Z.
Esch 8 *
23.1. Consent of Price Waterhouse LLP. 1
24.1. Powers of Attorney. 10 X
24.2. Certified resolution of the Registrant's Board of Directors
authorizing officers and directors signing on behalf
of the Registrant to sign pursuant to a power of
attorney. 1 X
27.1. Financial Data Schedules (submitted electronically for
SEC information only). 1
<FN>
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
X Previously filed.
</TABLE>
E - 2
<PAGE> 24
+ The Registrant will furnish a copy of any exhibit to a beneficial owner of its
securities or to any person from whom a proxy was solicited in connection with
the Registrant's most recent Annual Meeting of Shareholders upon the payment of
a fee of fifty cents ($.50) per page.
E - 3
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-45467, 33-46475, 33-46965, 33-48396 and
33-48397) and the Registration Statement on Form S-3 filed on April 18, 1996 of
Cooker Restaurant Corporation of our report dated January 29, 1996 appearing on
page F-2 in this Form 10-K/A Amendment Number 1.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Columbus, Ohio
April 18, 1996
