<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
American Restaurant Group, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 33-48183 33-0193602
- ------------------------------- ---------------- ----------------
(State or other jurisdiction of (Commission File (I.R.S. employer
incorporation or organization) Number) identification no.)
450 Newport Center Drive
Newport Beach, CA 92660
(949) 721-8000
-------------------------------------------------------------
(Address and telephone number of principal executive offices)
--------------------------------------------------
Former name, former address and former fiscal year
if changed since last report.
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
The number of outstanding shares of the Company's Common Stock (one cent par
value) as of May 3, 1999 was 128,081.
<PAGE> 2
AMERICAN RESTAURANT GROUP, INC.
INDEX
PAGE
----
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Consolidated Condensed Balance Sheets....................... 1
Consolidated Statements of Operations....................... 3
Consolidated Statements of Cash Flows....................... 4
Notes to Consolidated Condensed Financial Statements........ 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............... 7
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......... 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................ 10
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
AMERICAN RESTAURANT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
DECEMBER 28, 1998 AND MARCH 29, 1999
<TABLE>
<CAPTION>
ASSETS December 28, March 29,
1998 1999
------------ ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 8,832,000 $ 8,270,000
Accounts and notes receivable, net of reserve of
$602,000 and $606,000 at December 28, 1998
and March 29, 1999, respectively 4,804,000 5,180,000
Inventories 5,716,000 5,326,000
Prepaid expenses 3,108,000 2,776,000
------------ ------------
Total current assets 22,460,000 21,552,000
------------ ------------
PROPERTY AND EQUIPMENT:
Land and land improvements 5,485,000 5,485,000
Buildings and leasehold improvements 112,280,000 110,219,000
Fixtures and equipment 84,774,000 81,358,000
Property held under capital leases 11,634,000 11,634,000
Construction in progress 2,250,000 2,946,000
------------ ------------
216,423,000 211,642,000
Less-- Accumulated depreciation 125,858,000 123,369,000
------------ ------------
90,565,000 88,273,000
------------ ------------
OTHER ASSETS-- NET 37,434,000 35,594,000
------------ ------------
Total Assets $150,459,000 $145,419,000
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed statements.
(consolidated condensed balance sheets continued on the following page)
1
<PAGE> 4
<TABLE>
<CAPTION>
LIABILITIES AND COMMON STOCKHOLDERS' December 28, March 29,
EQUITY 1998 1999
------------- -------------
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 22,937,000 $ 26,046,000
Accrued liabilities 18,299,000 12,616,000
Accrued insurance 4,243,000 4,957,000
Accrued interest 7,033,000 2,441,000
Accrued payroll costs 8,194,000 7,548,000
Current portion of obligations
under capital leases 950,000 945,000
Current portion of long-term debt 421,000 387,000
------------- -------------
Total current liabilities 62,077,000 54,940,000
------------- -------------
LONG-TERM LIABILITIES, net of current portion:
Obligations under capital leases 6,566,000 6,353,000
Long-term debt 159,506,000 159,439,000
------------- -------------
Total long-term liabilities 166,072,000 165,792,000
------------- -------------
DEFERRED GAIN 4,684,000 4,546,000
------------- -------------
COMMITMENTS AND CONTINGENCIES
CUMULATIVE PREFERRED STOCK,
MANDATORILY REDEEMABLE 36,801,000 37,965,000
------------- -------------
REDEEMABLE CUMULATIVE PREFERRED STOCK:
Redeemable cumulative senior
preferred stock, $0.01 par value;
1,400,000 shares authorized,
no shares issued or outstanding -- --
Redeemable cumulative junior
preferred stock, $0.01 par value;
100,000 shares authorized,
no shares issued or outstanding -- --
COMMON STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; 1,000,000
shares authorized; 128,081 shares
issued and outstanding at December 28,
1998 and March 29, 1999 1,000 1,000
Paid-in capital 55,666,000 54,502,000
Accumulated deficit (174,842,000) (172,327,000)
------------- -------------
Total common stockholders' deficit (119,175,000) (117,824,000)
------------- -------------
Total liabilities and common
stockholders' equity $ 150,459,000 $ 145,419,000
============= =============
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed statements.
2
<PAGE> 5
AMERICAN RESTAURANT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEKS ENDED MARCH 30, 1998 and MARCH 29, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
----------------------------
March 30, March 29,
1998 1999
------------ -------------
<S> <C> <C>
REVENUES $112,122,000 $ 109,463,000
RESTAURANT COSTS:
Food and beverage 35,605,000 34,186,000
Payroll 33,202,000 33,298,000
Direct operating 27,234,000 26,707,000
Depreciation and amortization 3,749,000 3,522,000
GENERAL AND ADMINISTRATIVE EXPENSES 5,309,000 5,119,000
GRANDY'S FRANCHISE CONVERSION PROGRAM:
Gain on sale of assets -- (834,000)
Non-cash charge for assets to be disposed -- 108,000
------------ -------------
Operating profit 7,023,000 7,357,000
INTEREST EXPENSE, net 5,521,000 4,840,000
------------ -------------
Income before provision for income
taxes and extraordinary gain 1,502,000 2,517,000
PROVISION FOR INCOME TAXES 4,000 2,000
------------ -------------
Income before extraordinary gain 1,498,000 2,515,000
EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT 9,562,000 --
------------ -------------
Net income $ 11,060,000 $ 2,515,000
============ =============
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed statements.
3
<PAGE> 6
AMERICAN RESTAURANT GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEKS ENDED MARCH 30, 1998 AND MARCH 29, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
March 30, March 29,
1998 1999
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 112,862,000 $ 109,087,000
Cash paid to suppliers and employees (111,532,000) (101,366,000)
Interest paid, net (11,171,000) (9,432,000)
Income taxes paid (4,000) (2,000)
------------- -------------
Net cash used in operating activities (9,845,000) (1,713,000)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,256,000) (2,072,000)
Net (increase) decrease in other assets (53,000) 210,000
Proceeds from disposition of assets -- 438,000
Proceeds from sale of Grandy's assets -- 2,915,000
------------- -------------
Net cash provided by (used in)
investing activities (2,309,000) 1,491,000
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on indebtedness (155,689,000) (5,101,000)
Borrowings on indebtedness 155,215,000 5,000,000
Net increase in deferred debt costs (10,351,000) (21,000)
Costs included in extraordinary gain on extinguishment
of debt (1,686,000) --
Issuance of cumulative preferred stock 35,000,000 --
Cost related to issuance of cumulative preferred
stock (2,179,000) --
Payments on insurance-related financing (7,450,000) --
Payments on capital lease obligations (234,000) (218,000)
------------- -------------
Net cash provided by (used in) financing activities 12,626,000 (340,000)
------------- -------------
NET INCREASE (DECREASE) IN CASH 472,000 (562,000)
CASH, at beginning of period 5,737,000 8,832,000
------------- -------------
CASH, at end of period $ 6,209,000 $ 8,270,000
============= =============
RECONCILIATION OF NET INCOME TO NET CASH
USED IN OPERATING ACTIVITIES:
Net income $ 11,060,000 $ 2,515,000
Adjustments to reconcile net income to net
cash used in operating activities:
Extraordinary gain on
extinguishment of debt (9,562,000) --
Depreciation and amortization 3,749,000 3,522,000
Non-cash charge for assets to be disposed -- 108,000
Gain on disposition of assets -- (860,000)
Amortization of deferred gain (97,000) (138,000)
Accretion on indebtedness 21,000 --
(Increase) decrease in current assets:
Accounts and notes receivable, net 740,000 (376,000)
Inventories 190,000 390,000
Prepaid expenses 246,000 332,000
Increase (decrease) in current liabilities:
Accounts payable (4,926,000) 3,109,000
Accrued liabilities (5,059,000) (5,791,000)
Accrued insurance 308,000 714,000
Accrued interest (5,671,000) (4,592,000)
Accrued payroll (844,000) (646,000)
------------- -------------
Net cash used in operating activities $ (9,845,000) $ (1,713,000)
============= =============
</TABLE>
The accompanying notes are an integral part of these
consolidated condensed statements.
4
<PAGE> 7
AMERICAN RESTAURANT GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. MANAGEMENT OPINION
The Consolidated Condensed Financial Statements included were prepared
by the Company, without audit, in accordance with Securities and
Exchange Commission Regulation S-X. In the opinion of management of
the Company, these Consolidated Condensed Financial Statements contain
all adjustments (all of which are of a normal recurring nature)
necessary to present fairly the Company's financial position as of
December 28, 1998 and March 29, 1999, and the results of its
operations and its cash flows for the thirteen weeks ended March 30,
1998 and March 29, 1999. The Company's results for an interim period
are not necessarily indicative of the results that may be expected for
the year.
Although the Company believes that all adjustments necessary for a
fair presentation of the interim periods presented are included and
that the disclosures are adequate to make the information presented
not misleading, we suggest that these Consolidated Condensed Financial
Statements be read in conjunction with the Consolidated Financial
Statements and related notes included in the Company's annual report
on Form 10-K, File No. 33-48183, for the year ended December 28, 1998.
2. OPERATIONS
The Company's operations are affected by local and regional economic
conditions, including competition in the restaurant industry. The
Company has had recurring operating losses in recent years and was
unable to meet a required debt principal payment during 1997. A
recapitalization plan was consummated during 1998. This plan
substantially eliminated debt principal payments until the year 2003.
Management believes the recapitalization will also allow it to effect
changes in its operations and has already implemented measures to
reduce overhead costs. However, the Company does not expect to
generate sufficient cash flow from operations in the future to make
principal payments on long-term debt upon maturity in the year 2003
and, accordingly, it expects to refinance all or a portion of such
debt, obtain new financing or possibly sell assets.
3. INCOME TAX
The tax provision against the Company's pre-tax income in 1999 was
minimal and related to certain state income taxes. The Company
previously established a valuation allowance against net operating
loss carryforwards.
4. COMPREHENSIVE INCOME
Effective December 30, 1997, the Company adopted Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive
Income. There were no differences between the Company's net income, as
reported, and comprehensive income.
5
<PAGE> 8
5. SEGMENT REPORTING
Effective December 28, 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of
an Enterprise and Related Information. The Company's reportable
operating segments include Black Angus, Grandy's, and the Other
Concepts (Spoons, Spectrum and National Sports Grill, none of which
meet the separate disclosure requirements).
The applicable line items for the Company's reportable segments
reconciled to the consolidated financial statements for the thirteen
weeks ended March 30, 1998 and March 29, 1999 are as follows (in
thousands, except for number of restaurants):
<TABLE>
<CAPTION>
March 30, March 29,
1998 1999
--------- ---------
<S> <C> <C>
Number of Restaurants
Black Angus 101 100
Grandy's 89 77
Other Concepts 40 38
--------- ---------
Total Consolidated 230 215
========= =========
Revenues (a)
Black Angus $ 70,828 $ 71,210
Grandy's 18,475 17,038
Other Concepts 22,819 21,215
--------- ---------
Total Consolidated $ 112,122 $ 109,463
========= =========
Gross Profit (b)
Black Angus $ 11,251 $ 11,375
Grandy's 2,478 2,158
Other Concepts 2,352 1,739
--------- ---------
Total Consolidated $ 16,081 $ 15,272
========= =========
Net Income (loss) (c)
Black Angus $ 4,635 $ 4,986
Grandy's 36 566
Other Concepts (183) (660)
Corporate (2,986) (2,375)
--------- ---------
Total Consolidated $ 1,502 $ 2,517
========= =========
</TABLE>
(a) Reflects sales and revenues from external customers.
Intersegment sales and revenues are not applicable.
(b) Gross profit is defined as revenues less food and beverage,
payroll, and direct operating costs.
(c) Before provision for income taxes and extraordinary items.
There has not been a material change from the total asset amounts
disclosed in the December 28, 1998 Form 10-K; therefore, total assets
are not disclosed in this Form 10-Q.
6
<PAGE> 9
6. SUBSIDIARY GUARANTORS
Separate financial statements of the Company's subsidiaries are not
included in this report on Form 10-Q because the subsidiaries are
fully, unconditionally jointly and severally liable for the
obligations of the Company under the Company's 11.5% senior secured
notes, due 2003, and the aggregate net assets, earnings and equity of
such subsidiary guarantors are substantially equivalent to the net
assets, earnings and equity of the Company on a consolidated basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis of American Restaurant Group, Inc.'s
financial condition and results of operations should be read in conjunction with
the historical financial information included in the Consolidated Condensed
Financial Statements.
RESULTS OF OPERATIONS
Thirteen weeks ended March 30, 1998 and March 29, 1999:
Revenues. Total revenues decreased from $112.1 million in the first quarter of
1998 to $109.5 million in the first quarter of 1999. Same-store-sales decreased
0.1%. During the thirteen weeks ended March 29, 1999, the Company closed three
restaurants and converted six Grandy's restaurants from company-owned to
franchised restaurants. There were 230 restaurants operating as of March 30,
1998 and 215 operating as of March 29, 1999.
Black Angus revenues increased 0.5% to $71.2 million in the first quarter of
1999 as compared to the same period in 1998. The increase was primarily due to a
$1.7 million increase in same-store-sales or 2.6% (excluding late-night
entertainment and discontinued lunch) and a $0.6 million increase related to one
new store opened in the third quarter of 1998. These amounts were partially
offset by a $1.1 million decrease from discontinuing late-night entertainment at
eight restaurants and a $0.8 million decrease from two restaurants closed at the
end of the leases.
Grandy's revenues decreased 7.8% to $17.0 million in the first quarter of 1999
as compared to the same period in 1998. The decrease resulted from a $0.9
million, or a 5.5%, decline in same-store-sales and a $0.6 million decline due
to six restaurants closed during 1998 and 1999. Franchise revenues improved $0.1
million primarily because of franchise fees related to six company-owned
restaurants converted to franchised restaurants at the end of the first quarter
of 1999. The Company closed one poorly performing restaurant in Oklahoma and
temporarily closed one Texas restaurant damaged by a fire during the first
quarter of 1999.
Revenues from Other Concepts (Spoons, Spectrum and National Sports Grill)
decreased 7.0% to $21.2 million in the first quarter of 1999 compared to the
same quarter in 1998. The decrease resulted from a $0.9 million decline caused
by closing three restaurants during 1998 and 1999 and a $0.9 million, or 3.8%,
decline in same-store-sales, offset in part by $0.2 million related to the
opening of one new restaurant in 1998. The Company closed one restaurant in the
first quarter of 1999.
Food and Beverage Costs. As a percentage of revenues, food and beverage costs
decreased from 31.8% in the first quarter of 1998 to 31.2% in the first quarter
of 1999. The decrease was related primarily to seafood and produce costs.
Payroll Costs. As a percentage of revenues, labor costs increased from 29.6% in
the first quarter of 1998 to 30.4% in the first quarter of 1999. The increase
was primarily from higher management payroll costs at Black Angus.
7
<PAGE> 10
Direct Operating Costs. Direct operating costs consist of occupancy, advertising
and other expenses incurred by individual restaurants. As a percentage of
revenues, these costs increased slightly from 24.3% in the first quarter of 1998
to 24.4% in the first quarter of 1999.
Depreciation and Amortization. Depreciation and amortization consists of
depreciation of fixed assets used by individual restaurants, divisions and
corporate offices, as well as amortization of intangible assets. As a percentage
of revenues, depreciation and amortization decreased from 3.3% in the first
quarter of 1998 to 3.2% in the first quarter of 1999. The decrease was primarily
from the non-cash reduction of the historical costs of certain long-lived assets
at the end of 1998.
General and Administrative Expenses. General and administrative expenses
decreased from $5.3 million in the first quarter of 1998 to $5.1 million in the
first quarter of 1999. The decrease was primarily from a reduction in corporate
overhead expenses. General and administrative expenses as a percentage of
revenues remained constant at 4.7%.
Grandy's Franchise Conversion Program. In 1998, the Company announced a plan to
convert a majority of its company-owned Grandy's restaurants to franchised
restaurants. The Company recorded a $0.8 million gain on the sale of the
property and equipment, including applicable lease rights and certain intangible
assets, related to the conversion of restaurants in the first quarter of 1999.
It also recorded a $0.1 million non-cash charge related to the conversion.
Operating Profit. Due to the above items, operating profit increased from $7.0
million in the first quarter of 1998 to $7.4 million in the first quarter of
1999. As a percentage of revenues, operating profit increased from 6.3% in the
first quarter of 1998 to 6.7% in the first quarter of 1999.
Interest Expense - Net. Interest expense decreased from $5.5 million in the
first quarter of 1998 to $4.8 million in the first quarter of 1999. The decrease
was primarily attributable to the refinancing of the Company's debt in February
1998. The Company's average stated interest rate decreased from 12.5% in the
first quarter of 1998 to 11.2% in the first quarter of 1999. The
weighted-average debt balance (excluding capitalized lease obligations)
decreased from $166.6 million in the first quarter of 1998 to $161.1 million in
the first quarter of 1999.
Extraordinary Gain. The company recognized an extraordinary gain of $9.6 million
on the extinguishment of debt in the first quarter of 1998. This gain resulted
from the refinancing of the Company's debt in February 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity are cash flow from operations and
borrowings under its credit facilities. The Company requires capital principally
for the acquisition and construction of new restaurants, the remodeling of
existing restaurants and the purchase of new equipment and leasehold
improvements. As of March 29, 1999, the Company had cash of $8.3 million.
In general, restaurant businesses do not have significant accounts receivable
because sales are made for cash or by credit card vouchers which are ordinarily
paid within three to five days, and restaurant businesses do not maintain
substantial inventory because of the relatively brief shelf life and frequent
turnover of food products. Additionally, restaurants generally are able to
obtain trade credit in purchasing food and restaurant supplies. As a result,
restaurants are frequently able to operate with working capital deficits, i.e.,
current liabilities exceed current assets. At March 29, 1999, the Company had a
working capital deficit of $33.4 million.
In conjunction with the Company's plan to convert a majority of its
company-owned Grandy's restaurants to franchised restaurants, the Company
received proceeds of $2.9 million related to the conversion of restaurants
in the first quarter of 1999. The Company continues to market its Grandy's
restaurants for franchising; however, the timing and amount of proceeds from the
conversion of other restaurants cannot be determined. The Company is required to
reinvest the net proceeds as capital expenditures or to pay down outstanding
debt.
8
<PAGE> 11
The Company estimates that capital expenditures of $6.0 million to $8.0 million
are required annually to maintain and refurbish its existing restaurants. In
addition, the Company spends approximately $10.0 million to $12.0 million
annually for repairs and maintenance which are expensed as incurred. Other
capital expenditures, which are generally discretionary, are primarily for the
construction of new restaurants and for expanding, reformatting and extending
the capabilities of existing restaurants and for general corporate purposes.
Total capital expenditures year-to-date were $2.3 million and $2.1 million in
1998 and 1999, respectively. The Company estimates that capital expenditures in
1999 will be approximately $10.0 million. The Company intends to open new
restaurants with small capital outlays and to finance most of the expenditures
through operating leases.
As a result of the 11.5% senior secured notes issued by the Company in February
1998, the Company is obligated to make semiannual interest payments on February
15 and August 15 through February 2003. Accordingly, an interest payment of $9.1
million was made in February 1999.
Substantially all assets of the Company are pledged to its senior lenders. In
addition, the subsidiaries have guaranteed the indebtedness owed by the Company
and such guarantee is secured by substantially all of the assets of the
subsidiaries. In connection with such indebtedness, contingent and mandatory
prepayments may be required under certain specified conditions and events. There
are no compensating balance requirements.
Although the Company is highly leveraged, based upon current levels of
operations and anticipated growth, the Company expects that cash flows generated
from operations together with its other available sources of liquidity will be
adequate to make required payments of principal and interest on its
indebtedness, to make anticipated capital expenditures and to finance working
capital requirements. However, the Company does not expect to generate
sufficient cash flow from operations in the future to pay the Notes upon
maturity and, accordingly, it expects to refinance all or a portion of such
debt, obtain new financing or possibly sell assets.
YEAR 2000 COMPLIANCE
Since 1997, the Company has been assessing the Year 2000 issues that may affect
its operations. The Company believes the Year 2000 issues it must address
include ensuring (i) its information technology systems (hardware and software)
enable it to manage and operate its business and (ii) its non-information
technology systems (including heating, air conditioning and security systems)
will continue to operate. The Company is currently on schedule for Year 2000
compliance and does not believe it has material potential liability to third
parties if its systems are not Year 2000 compliant.
The Company has received written responses from third parties with which it has
material relationships. All of the responses received to date indicate the
suppliers have or will timely resolve their Year 2000 issues.
The Company's costs of compliance with the Year 2000 requirements are immaterial
because it was in the process of upgrading or establishing systems in the normal
course of business.
The Company believes it and its material suppliers will resolve their Year 2000
issues in a timely fashion. However, if the Company or its material suppliers do
not become Year 2000 compliant, the Company could suffer a material adverse
effect on its business, results of operations and financial condition. The
Company believes it is unlikely any of these events will result, but there can
be no such assurance. The Company currently has no contingency plan to handle
the occurrence of these events and does not currently intend to create one.
9
<PAGE> 12
RECENT ACCOUNTING PRONOUNCEMENTS
Statement of Position No. 98-5, Reporting on the Costs of Start-up Activities
(SOP No. 98-5) was issued in April 1998. SOP No. 98-5 requires costs of start-up
activities and organization costs to be expensed as incurred. The Company has
historically accumulated costs incurred in connection with opening a new
restaurant and amortized these costs over the initial year of operations. Any
previously deferred preopening costs were expensed as of the end of fiscal year
1998. New restaurant openings are typically staggered throughout the year and,
therefore, the Company does not anticipate the requirements of SOP No. 98-5 to
materially affect the Company's financial position or results of operations.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits
Exhibit No. Description
----------- -----------
27.1 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only.
10
<PAGE> 13
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.
AMERICAN RESTAURANT GROUP, INC.
-------------------------------
(Registrant)
Date: May 13, 1999 By: /s/ KEN DI LILLO
------------------------- ----------------------------
Ken Di Lillo
Treasurer and Assistant Secretary
11
<PAGE> 14
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
27.1 Financial Data Schedule, which is submitted electronically to
the Securities and Exchange Commission for information only.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MARCH 29, 1999 AND THE CONSOLIDATED STATEMENT
OF INCOME FOR THE THREE MONTHS ENDED MARCH 29, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-27-1999
<PERIOD-START> DEC-29-1998
<PERIOD-END> MAR-29-1999
<CASH> 8,270,000
<SECURITIES> 0
<RECEIVABLES> 5,786,000
<ALLOWANCES> 606,000
<INVENTORY> 5,326,000
<CURRENT-ASSETS> 21,552,000
<PP&E> 211,642,000
<DEPRECIATION> 123,369,000
<TOTAL-ASSETS> 145,419,000
<CURRENT-LIABILITIES> 54,502,000
<BONDS> 0
0
0
<COMMON> 1,000
<OTHER-SE> (117,825,000)
<TOTAL-LIABILITY-AND-EQUITY> 145,419,000
<SALES> 109,463,000
<TOTAL-REVENUES> 109,463,000
<CGS> 34,186,000
<TOTAL-COSTS> 60,005,000
<OTHER-EXPENSES> 3,522,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,840,000
<INCOME-PRETAX> 2,517,000
<INCOME-TAX> 2,000
<INCOME-CONTINUING> 2,515,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,515,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
